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

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  • 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
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    References listed on IDEAS

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    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.
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    6. 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.
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    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.

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    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

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