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The role of demography on per capita output growth and saving rates

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  • Miguel Sánchez-Romero

Abstract

Computable general equilibrium (CGE) models and “convergence models” differ in their assessment of the extent to which demography influences economic growth. Here, I show that CGE models produce results similar to those of convergence models when more detailed demographic information is used. To do so, I implement a CGE model to explain Taiwan’s economic miracle during the period 1965–2005. I find that Taiwan’s demographic transition accounts for 22 % of per capita output growth and 17.7 % of investment rate for the period 1965–2005. Moreover, this paper confirms most of the literature written on the role of demography on per capita output growth and saving rates since the seminar article by Coale and Hoover ( 1958 ). Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Miguel Sánchez-Romero, 2013. "The role of demography on per capita output growth and saving rates," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1347-1377, October.
  • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1347-1377
    DOI: 10.1007/s00148-012-0447-3
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    3. Willem DEVRIENDT & Freddy HEYLEN, 2020. "Macroeconomic and Distributional Effects of Demographic Change in an Open Economy - The Case of Belgium," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 86(1), pages 87-124, March.
    4. Lee, R., 2016. "Macroeconomics, Aging, and Growth," Handbook of the Economics of Population Aging, in: Piggott, John & Woodland, Alan (ed.), Handbook of the Economics of Population Aging, edition 1, volume 1, chapter 0, pages 59-118, Elsevier.
    5. Rainer Kotschy & Uwe Sunde & Tommaso MonacelliManaging Editor, 2018. "Can education compensate the effect of population ageing on macroeconomic performance?," Economic Policy, CEPR;CES;MSH, vol. 33(96), pages 587-634.
    6. Krzysztof Makarski & Joanna Tyrowicz & Magda Malec, 2018. "Evaluating welfare and economic effects of raised fertility," GRAPE Working Papers 25, GRAPE Group for Research in Applied Economics.
    7. Michael Kuhn & Klaus Prettner, 2018. "Population age structure and consumption growth: evidence from National Transfer Accounts," Journal of Population Economics, Springer;European Society for Population Economics, vol. 31(1), pages 135-153, January.
    8. Annarita Baldanzi & Klaus Prettner & Paul Tscheuschner, 2019. "Longevity-induced vertical innovation and the tradeoff between life and growth," Journal of Population Economics, Springer;European Society for Population Economics, vol. 32(4), pages 1293-1313, October.
    9. Kotschy, Rainer, 2021. "Health dynamics shape life-cycle incomes," Journal of Health Economics, Elsevier, vol. 75(C).
    10. Lucilla Maria Bruni & Jamele Rigolini & Sara Troiano, . "Forever Young?," World Bank Other Operational Studies, The World Bank, number 24996, September.
    11. Gemma Abio Roig & Concepció Patxot Cardoner & Miguel Sánchez-Romero & Guadalupe Souto Nieves, 2015. "The Welfare State and the demographic dividend: A cross-country comparison," UB Economics Working Papers 2015/332, Universitat de Barcelona, Facultat d'Economia i Empresa, UB School of Economics.
    12. Nick Parr & Ross Guest, 2014. "A method for socially evaluating the effects of long-run demographic paths on living standards," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 31(11), pages 275-318.
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    14. Miguel Sánchez Romero & Naohiro Ogawa & Rikiya Matsukura, 2013. "To give or not to give: bequest estimate and wealth impact based on a CGE model with realistic demography in Japan," MPIDR Working Papers WP-2013-012, Max Planck Institute for Demographic Research, Rostock, Germany.

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    More about this item

    Keywords

    Demography; Saving rates; Investment rates; Income growth; Overlapping generations; D58; E21; J11;
    All these keywords.

    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics
    • Z0 - Other Special Topics - - General

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