International Diversification of Pension Assets Is No Panacea for Population Aging
AbstractSix years ago,\f2The Economist\f1 wrote that investing retirement savings in developed countries in the emerging markets of still-youthful developing countries promised to "beat demography." As labor force growth slows in the North, runs this argument, capital becomes abundant relative to labor and the rate of return to this capital declines. By investing in the South, not only do OECD investors earn a higher rate of return on their savings, but the rate of return to that capital which remains in the North is boosted as well, because there is less of it. Working with a two-region neoclassical economic-demographic model, the authors show that reallocating capital from North to South can, at most, only slightly attenuate the negative macroeconomic impacts of population aging. Moreover, the reallocaion gives rise to significant, and thus politically challenging, shifts in the distribution of income between working- and retirement-age populations in both regions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by International Institute for Applied Systems Analysis in its series Working Papers with number ir98034.
Date of creation: Jun 1998
Date of revision:
Contact details of provider:
Postal: A-2361 Laxenburg
Web page: http://www.iiasa.ac.at/Publications/Catalog/PUB_ONLINE.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Blanchet, Didier & Kessler, Denis, 1992. "Pension Systems in Transition Economies: Perspectives and Choices Ahead," Public Finance = Finances publiques, , vol. 47(Supplemen), pages 21-33.
- Paul R. Masson & Ralph W. Tryon, 1990.
"Macroeconomic Effects of Projected Population Aging in Industrial Countries,"
IMF Staff Papers,
Palgrave Macmillan, vol. 37(3), pages 453-485, September.
- Paul R. Masson & Ralph W. Tryon, 1990. "Macroeconomic Effects Of Projected Population Aging In Industrial Countries," IMF Working Papers 90/5, International Monetary Fund.
- Matthew Higgins, 1997. "Demography, national savings and international capital flows," Staff Reports 34, Federal Reserve Bank of New York.
- David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990.
"An Aging Society: Opportunity or Challenge?,"
Brookings Papers on Economic Activity,
Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
- repec:fth:harver:1490 is not listed on IDEAS
- Guillermo Larraín & Helmut Reisen & Julia von Maltzan, 1997. "Emerging Market Risk and Sovereign Credit Ratings," OECD Development Centre Working Papers 124, OECD Publishing.
- Sylvester J. Schieber & John B. Shoven, 1994. "The Consequences of Population Aging on Private Pension Fund Saving and Asset Markets," NBER Working Papers 4665, National Bureau of Economic Research, Inc.
- Peter Yoo, 1994. "Boom or bust? the economic effects of the baby boom," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 13-22.
- F.L. MacKellar & T.Y. Ermolieva & H. Reisen, 1999. "Globalization, Social Security, and International Transfers," Working Papers ir99056, International Institute for Applied Systems Analysis.
- F.L. MacKellar & T.Y. Ermolieva, 1999. "The IIASA Social Security Reform Project Multiregional Economic-Demographic Growth Model: Policy Background and Algebraic Structure," Working Papers ir99007, International Institute for Applied Systems Analysis.
- A. Westlund & T.Y. Ermolieva & F.L. MacKellar, 1999. "Analysis and Forecasting of Social Security: A Study of Robustness," Working Papers ir99004, International Institute for Applied Systems Analysis.
- Anton Dobronogov, 1999.
"Systems Analysis of Social Security in a Transition Economy: The Ukrainian case,"
- A.V. Dobronogov, 1998. "Systems Analysis of Social Security in a Transition Economy: The Ukrainian Case," Working Papers ir98073, International Institute for Applied Systems Analysis.
- L.D. Mayhew, 1999. "Health and Welfare Services Expenditure in an Aging World," Working Papers ir99035, International Institute for Applied Systems Analysis.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Thomas Krichel).
If references are entirely missing, you can add them using this form.