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Demography, Financial Openness, National Savings and External Balance

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  • Michael Graff

    ()
    (KOF Swiss Economic Institute, ETH Zurich)

  • Kam Ki Tang

    ()
    (School of Economics, University of Queensland, Australia)

  • Jie Zhang

    (School of Economics, University of Queensland, Australia)

Abstract

This paper examines the impact of demographic factors on saving, investment, and external balances. We derive a number of semi-structural equations from national accounting principle and the principle that external balances for the world as a whole must sum to zero. The resulting equations embody both closed, partially open and completely open economies as special cases, and are arguably more properly specified than those previously used in the literature. We apply these semi-structural equations to a large panel data set. While our findings by and large are in agreement with most previous studies, our semi-structural equations give much more plausible estimation results for saving and investment than conventional specification

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Bibliographic Info

Paper provided by KOF Swiss Economic Institute, ETH Zurich in its series KOF Working papers with number 08-194.

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Length: 31 pages
Date of creation: Apr 2008
Date of revision:
Handle: RePEc:kof:wpskof:08-194

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Keywords: Demography; openness; saving; investment; current account; panel data;

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References

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  1. Maurice Obstfeld & Kenneth Rogoff, 2000. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?," NBER Working Papers 7777, National Bureau of Economic Research, Inc.
  2. Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
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  18. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
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Cited by:
  1. Benjamin Wong & Kam Ki Tang, 2010. "The Ageing, Longevity and Crowding Out Effects on Private and Public Savings," CAMA Working Papers 2010-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

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