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Demographic Change, International Trade and Capital Flows

Listed author(s):
  • Igor Fedotenkov
  • Bas Groezen

    ()

  • Lex Meijdam

Trade in goods that are not perfect substitutes can considerably change the predictions of standard neoclassical models about the effects of demographic developments. This paper considers a relative decrease in the population size of one country, when countries specialize in the production of different intermediate goods. The degree of substitutability is crucial for the direction of capital flows between the countries and for the development of wages. The less those goods are substitutes, the stronger the long-run international spillover effects of a demographic shock will be. For the interest rate effects, also international differences in saving rates due to e.g., different pension schemes have to be taken into account. Copyright Springer Science+Business Media New York 2014

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File URL: http://hdl.handle.net/10.1007/s11079-014-9311-2
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Article provided by Springer in its journal Open Economies Review.

Volume (Year): 25 (2014)
Issue (Month): 5 (November)
Pages: 865-883

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Handle: RePEc:kap:openec:v:25:y:2014:i:5:p:865-883
DOI: 10.1007/s11079-014-9311-2
Contact details of provider: Web page: http://www.springer.com

Order Information: Web: http://www.springer.com/economics/international+economics/journal/11079/PS2

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