IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-07c60004.html

Population ageing, policy reforms and economic growth in Japan: a computable OLG model with endogenous growth mechanism

Author

Listed:
  • Manabu Shimasawa

    (Akita University)

Abstract

We have developed a computable endogenous growth OLG model generated by the accumulation of human capital. To study whether policy reform against aging make any quantitative impacts through human capital formation on the Japanese economy and whether it has long-run effect, we simulate two policy change scenarios and compare the results of those with endogenous growth to those with exogenous growth. The results are very encouraging: (i) policy changes promote human capital accumulation and thus accelerate economic growth. (ii) they have positive effects in the long run. Moreover, the traditional exogenous growth OLG model underestimates the effect of policy reform.

Suggested Citation

  • Manabu Shimasawa, 2007. "Population ageing, policy reforms and economic growth in Japan: a computable OLG model with endogenous growth mechanism," Economics Bulletin, AccessEcon, vol. 3(49), pages 1-11.
    • Handle: RePEc:ebl:ecbull:eb-07c60004
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2007/Volume3/EB-07C60004A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Bouzahzah, Mohamed & De la Croix, David & Docquier, Frederic, 2002. "Policy reforms and growth in computable OLG economies," Journal of Economic Dynamics and Control, Elsevier, vol. 26(12), pages 2093-2113, October.
    3. Kato, Ryuta Ray, 2002. "Government Deficit, Public Investment, and Public Capital in the Transition to an Aging Japan," Journal of the Japanese and International Economies, Elsevier, vol. 16(4), pages 462-491, December.
    4. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    5. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    6. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
    7. Fougere, Maxime & Merette, Marcel, 1999. "Population ageing and economic growth in seven OECD countries," Economic Modelling, Elsevier, vol. 16(3), pages 411-427, August.
    8. Sadahiro, Akira & Shimasawa, Manabu, 2003. "The computable overlapping generations model with an endogenous growth mechanism," Economic Modelling, Elsevier, vol. 20(1), pages 1-24, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Choi, Ki-Hong & Shin, Sungwhee, 2015. "Population aging, economic growth, and the social transmission of human capital: An analysis with an overlapping generations model," Economic Modelling, Elsevier, vol. 50(C), pages 138-147.
    2. Yuan-Ho Hsu & Hiroshi Yoshida & Fengming Chen, 2022. "The Impacts of Population Aging on China’s Economy," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 14(1), pages 105-130, January.
    3. Zheng Guo & Linchen Liu & Xuan Liu, 2016. "Population Aging, Marginal Propensity to Consume, and Economic Growth," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 6(9), pages 534-546, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. SHIMASAWA Manabu, 2004. "Population ageing policy reforms and endogenous growth in Japan: a computable overlapping generations approach," ESRI Discussion paper series 096, Economic and Social Research Institute (ESRI).
    2. Sadahiro, Akira & Shimasawa, Manabu, 2003. "The computable overlapping generations model with an endogenous growth mechanism," Economic Modelling, Elsevier, vol. 20(1), pages 1-24, January.
    3. Charles R. Hulten & Robert M. Schwab, 1993. "Endogenous Growth, Public Capital, and the Convergence of Regional Manufacturing Industries," NBER Working Papers 4538, National Bureau of Economic Research, Inc.
    4. Adriana Di Liberto, 2007. "Convergence and Divergence in Neoclassical Growth Models with Human Capital," Economia politica, Società editrice il Mulino, issue 2, pages 289-322.
    5. Schilirò, Daniele, 2006. "Crescita economica, conoscenza e capitale umano. Le teorie e i modelli di crescita endogena di Paul Romer e Robert Lucas [Economic growth, knowledge and human capital. Theories and models of endogenous growth by Paul Romer and Robert Lucas]," MPRA Paper 52435, University Library of Munich, Germany.
    6. repec:ebl:ecbull:v:2:y:2002:i:1:p:1-15 is not listed on IDEAS
    7. Maurer, Rainer, 1995. "Is economic growth a random walk?," Kiel Working Papers 677, Kiel Institute for the World Economy.
    8. Osiris Jorge Parcero & James Christopher Ryan, 2017. "Becoming a Knowledge Economy: the Case of Qatar, UAE, and 17 Benchmark Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(4), pages 1146-1173, December.
    9. Hafiz Saqib Mehmood Najmi & Farrukh Bashir & Saman Maqsood, 2013. "Is Fiscal Policy Effective In Generating Higher Real Output? A Case Of Pakistan," Pakistan Journal of Humanities and Social Sciences, International Research Alliance for Sustainable Development (iRASD), vol. 1(2), pages 47-58, December.
    10. Robert J. Stimson, 2014. "Proximity and endogenous regional development," Chapters, in: André Torre & Frédéric Wallet (ed.), Regional Development and Proximity Relations, chapter 1, pages 47-93, Edward Elgar Publishing.
    11. Gene M. Grossman & Elhanan Helpman, 1994. "Endogenous Innovation in the Theory of Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 23-44, Winter.
    12. Capolupo, Rosa, 2009. "The New Growth Theories and Their Empirics after Twenty Years," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy, vol. 3, pages 1-72.
    13. Thomas M. Steger, 2000. "Productive Consumption and Growth in Developing Countries," Review of Development Economics, Wiley Blackwell, vol. 4(3), pages 365-375, October.
    14. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    15. Laurent Cavenaile & Christian Gengenbach & Franz Palm, 2014. "Stock Markets, Banks and Long Run Economic Growth: A Panel Cointegration-Based Analysis," De Economist, Springer, vol. 162(1), pages 19-40, March.
    16. Amponsah, Mary & Agbola, Frank W. & Mahmood, Amir, 2021. "The impact of informality on inclusive growth in Sub-Saharan Africa: Does financial inclusion matter?," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1259-1286.
    17. Taylor, Alan M., 1999. "Sources of convergence in the late nineteenth century," European Economic Review, Elsevier, vol. 43(9), pages 1621-1645, October.
    18. Rosa Capolupo, 2005. "THE NEW GROWTH THEORIES AND THEIR EMPIRICS, Discussion Paper in Economics, University of Glasgow, N. 2005-04 (http://www.gla.ac.uk/Acad/Economics," GE, Growth, Math methods 0506003, University Library of Munich, Germany.
    19. Klaus Waelde, 1994. "Trade pattern reversal: The role of technological change, factor accumulation and government intervention," International Trade 9403003, University Library of Munich, Germany, revised 06 Apr 1994.
    20. Maria Jesus Herrerias & Vicente Orts, 2011. "The driving forces behind China’s growth," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 19(1), pages 79-124, January.
    21. Matthias Firgo & Peter Mayerhofer, 2015. "Wissensintensive Unternehmensdienste, Wissens-Spillovers und regionales Wachstum. Teilprojekt 1: Wissens-Spillovers und regionale Entwicklung – Welche strukturpolitische Ausrichtung optimiert das Wachstum?," WIFO Studies, WIFO, number 58342.

    More about this item

    JEL classification:

    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • J1 - Labor and Demographic Economics - - Demographic Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-07c60004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.