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Aging, pension reform and capital flows: a multi-country simulation model

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  • Axel Börsch-Supan
  • Alexander Ludwig
  • Joachim Winter

Abstract

Population ageing and pension reform will have profound effects on international capital markets. In order to quantify these effects, we develop a computational general equilibrium model. We feed this multi-country overlapping-generations model with detailed long-term demographic projections for seven world regions. Our simulations indicate that capital flows from rapidly ageing regions to the rest of the world will initially be substantial, but that trends are reversed when households decumulate savings. We also conclude that closed-economy models of pension reform miss quantitatively important effects of international capital mobility. Copyright (c) The London School of Economics and Political Science 2006.

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Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2002 with number 108.

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Date of creation: 01 Jul 2002
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Handle: RePEc:sce:scecf2:108

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Keywords: aging; pension reform; capital mobility;

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