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Demography, National Savings, and International Capital Flows

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  • Higgins, Matthew

Abstract

This paper addresses the relationship between age distribution, national savings, and the current account balance. The results point to substantial demographic effects, with increases in both the youth and old-age dependency ratios associated with lower savings rates. They also point to differential effects on savings and investment and thus to a role for demography in determining the current account balance. The estimated demographic effect on the current account balance exceeds 6 percent of GDP over the last three decades for a number of countries and, given expected demographic trends, is likely to be substantially larger over the coming decades. Copyright 1998 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.

Suggested Citation

  • Higgins, Matthew, 1998. "Demography, National Savings, and International Capital Flows," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(2), pages 343-369, May.
  • Handle: RePEc:ier:iecrev:v:39:y:1998:i:2:p:343-69
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J1 - Labor and Demographic Economics - - Demographic Economics

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