Indeterminacy, intergenerational redistribution, endogenous longevity and human capital accumulation
This paper sets up an OLG economy with endogenous life expectancy to study how fiscal policy that redistributes between generations can open the door to sunspot equilibria. Agents invest independently in their own human capital, produce and consume output, and receive a pension upon retirement. The model produces an expectations coordination problem that can explain significant differences in growth paths followed by otherwise identical countries. In particular, we show that our economy may be characterised by local indeterminacy of dynamic equilibria, and hence feature fluctuations which are driven by extrinsic uncertainty.
(This abstract was borrowed from another version of this item.)
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
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.:
- Jaime Alonso-Carrera & María Jesús Freire-Serén, 2002.
"Multiple equilibria, fiscal policy, and human capital accumulation,"
0204, Universidade de Vigo, Departamento de Economía Aplicada.
- Alonso-Carrera, Jaime & Freire-Seren, Maria Jesus, 2004. "Multiple equilibria, fiscal policy, and human capital accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 841-856, January.
- Benhabib, Jess & Gali, Jordi, 1995.
"On Growth and Indeterminacy: Some Theory and Evidence,"
95-08, C.V. Starr Center for Applied Economics, New York University.
- Benhabib, Jess & Gali, Jordi, 1995. "On growth and indeterminacy: some theory and evidence," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 43(1), pages 163-211, December.
- Blackburn, Keith & Cipriani, Giam Pietro, 2002. "A model of longevity, fertility and growth," Journal of Economic Dynamics and Control, Elsevier, vol. 26(2), pages 187-204, February.
- Park, Hyun & Philippopoulos, Apostolis, 2004. "Indeterminacy and fiscal policies in a growing economy," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 645-660, January.
- Cipriani, Giam Pietro & Makris, Miltiadis, 2006. "A model with self-fulfilling prophecies of longevity," Economics Letters, Elsevier, vol. 91(1), pages 122-126, April.
- Ehrlich, Isaac & Lui, Francis T, 1991. "Intergenerational Trade, Longevity, and Economic Growth," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 1029-59, October.
- Schmitt-Grohe, Stephanie & Uribe, Martin, 1997.
"Balanced-Budget Rules, Distortionary Taxes, and Aggregate Instability,"
Journal of Political Economy,
University of Chicago Press, vol. 105(5), pages 976-1000, October.
- Stephanie Schmitt-Grohe & Martin Uribe, 1995. "Balanced-budget rules, distortionary taxes, and aggregate instability," Finance and Economics Discussion Series 95-44, Board of Governors of the Federal Reserve System (U.S.).
- Becker, Gary S & Murphy, Kevin M & Tamura, Robert, 1990.
"Human Capital, Fertility, and Economic Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 98(5), pages S12-37, October.
- Gary S. Becker & Kevin M. Murphy & Robert F. Tamura, 1990. "Human Capital, Fertility, and Economic Growth," NBER Working Papers 3414, National Bureau of Economic Research, Inc.
- Gary S. Becker & Kevin M. Murphy & Robert Tamura, . "Human Capital, Fertility, and Economic Growth," University of Chicago - Population Research Center 90-5a, Chicago - Population Research Center.
- Cervellati, Matteo & Sunde, Uwe, 2005.
"Human capital formation, life expectancy, and the process of development,"
Munich Reprints in Economics
20083, University of Munich, Department of Economics.
- Matteo Cervellati & Uwe Sunde, 2005. "Human Capital Formation, Life Expectancy, and the Process of Development," American Economic Review, American Economic Association, vol. 95(5), pages 1653-1672, December.
- Robert Tamura, 2004.
"Human capital and economic development,"
FRB Atlanta Working Paper
2004-34, Federal Reserve Bank of Atlanta.
- Guo, Jang-Ting & Lansing, Kevin J., 1998.
"Indeterminacy and Stabilization Policy,"
Journal of Economic Theory,
Elsevier, vol. 82(2), pages 481-490, October.
- Bond, Eric W. & Wang, Ping & Yip, Chong K., 1996.
"A General Two-Sector Model of Endogenous Growth with Human and Physical Capital: Balanced Growth and Transitional Dynamics,"
Journal of Economic Theory,
Elsevier, vol. 68(1), pages 149-173, January.
- Eric W. Bond & Ping Wang & Chong K. Yip, 1993. "A general two-sector model of endogenous growth with human and physical capital: balanced growth and transitional dynamics," Research Paper 9324, Federal Reserve Bank of Dallas.
- Nordblom, Katarina, 2003. "Is increased public schooling really a policy for equality?: The role of within-the-family education," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 1943-1965, September.
- Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
- Benhabib, Jess & Farmer, Roger E.A., 1999. "Indeterminacy and sunspots in macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 6, pages 387-448 Elsevier.
- Cazzavillan, Guido, 1996. "Public Spending, Endogenous Growth, and Endogenous Fluctuations," Journal of Economic Theory, Elsevier, vol. 71(2), pages 394-415, November.
- David N. Weil & Oded Galor, 2000. "Population, Technology, and Growth: From Malthusian Stagnation to the Demographic Transition and Beyond," American Economic Review, American Economic Association, vol. 90(4), pages 806-828, September.
When requesting a correction, please mention this item's handle: RePEc:eee:dyncon:v:31:y:2007:i:2:p:613-633. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.