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An Overlapping Generations Computable General Equilibrium (OLG-CGE) Model with Age-variable Rate of Time Preference

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Abstract

It is generally accepted that people prefer to receive reward earlier rather than later. A positive rate of time preference is routinely used in economic models of intertemporal choice, for example OLG-CGE models. Calibrating an OLG-CGE model is challenging because age-profile data is usually not available. For example, researchers typically have no data on consumption by age group. The conventional way to proceed is to impose a constant rate of time preference, which implies smooth age profile for consumption.

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  • Katerina Lisenkova, 2016. "An Overlapping Generations Computable General Equilibrium (OLG-CGE) Model with Age-variable Rate of Time Preference," National Institute of Economic and Social Research (NIESR) Discussion Papers 458, National Institute of Economic and Social Research.
    • Handle: RePEc:nsr:niesrd:458
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    Cited by:

    1. Katerina Lisenkova & Kateryna Bornukova, 2017. "Effects of population ageing on the pension system in Belarus," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 17(2), pages 103-118.

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    More about this item

    Keywords

    OLG-CGE modelling; population ageing; rate of time preference; delay discounting;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts

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