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Does being different matter?

Author

Listed:
  • Finn E. Kydland
  • D'Ann M. Petersen

Abstract

Changes in the demographic structure of the U.S. population will affect many aspects of the US economy as we move into the next century. Concerns about the impact of an aging population on savings and interest rates, the financing of government spending programs for the elderly, and the possibility of higher taxes for future generations to pay for them have become hot topics, both in the press and among economists. Another concern is whether rising immigration will place an even greater burden on the government. In this article, Finn Kydland and D'Ann Petersen present a framework economists can use to shed ight quantitatively on such issues where individual differences matter. They also discuss why, for a certain class of questions, being different does not matter. In the final section, the authors present findings from current research that deals with the issues mentioned above.

Suggested Citation

  • Finn E. Kydland & D'Ann M. Petersen, 1997. "Does being different matter?," Economic and Financial Policy Review, Federal Reserve Bank of Dallas, issue Q III, pages 2-11.
  • Handle: RePEc:fip:fedder:y:1997:i:qiii:p:2-11
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    File URL: http://www.dallasfed.org/assets/documents/research/er/1997/er9703a.pdf
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    References listed on IDEAS

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    3. José-Víctor Ríos-Rull, 1996. "Life-Cycle Economies and Aggregate Fluctuations," Review of Economic Studies, Oxford University Press, vol. 63(3), pages 465-489.
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    6. Sala-i-Martin, Xavier X, 1996. "A Positive Theory of Social Security," Journal of Economic Growth, Springer, vol. 1(2), pages 277-304, June.
    7. Finn E. Kydland, 1993. "Business cycles and aggregate labor-market fluctuations," Working Paper 9312, Federal Reserve Bank of Cleveland.
    8. Thomas F. Cooley & Jorge Soares, 1999. "A Positive Theory of Social Security Based on Reputation," Journal of Political Economy, University of Chicago Press, vol. 107(1), pages 135-160, February.
    9. Lucas, Robert E, Jr, 1980. "Methods and Problems in Business Cycle Theory," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 12(4), pages 696-715, November.
    10. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-1370, November.
    11. Imrohoroglu, Ayse & Imrohoroglu, Selahattin & Joines, Douglas H, 1995. "A Life Cycle Analysis of Social Security," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(1), pages 83-114, June.
    12. Eswar Prasad, 1996. "Skill Heterogeneity and the Business Cycle," Canadian Journal of Economics, Canadian Economics Association, vol. 29(4), pages 910-929, November.
    13. Kydland, Finn E, 1991. "Inflation, Personal Taxes, and Real Output: A Dynamic Analysis," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 23(3), pages 575-579, August.
    14. Per Krusell & José-Victor Ríos-Rull, 1994. "What Constitutions Promote Capital Accumulation? A Political-Economy Approach," Wallis Working Papers WP1, University of Rochester - Wallis Institute of Political Economy.
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