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Neoclassical growth with endogenous age distribution. Poverty vs low-fertility traps as steady states of demographic transitions

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  • Luciano Fanti
  • Mimmo Iannelli
  • Piero Manfredi

Abstract

Compared to other factors, the role of the age distribution of the population as a key endogenous determinant of economic growth trajectories has traditionally been overlooked. This is unrealistic, especially when dealing with major epochs of structural change, such as demographic transitions. We set up a model combining a simple representation of the economy, based on the neoclassical growth model of Solow, with a comprehensive representation of population dynamics. The model is used to investigate the structure of balanced growth states of the population and the economy in the presence of demographic transitions. The analysis shows that proper inclusion of age structure enriches the spectrum of the long-run equilibria of the neoclassical model, allowing up to five states of balanced growth, and shows the onset of “poverty” and “low-fertility” traps as different facets of fertility transitions. The role of different timing of fertility, mortality and savings transitions, and of more realistic demography of capital, is also considered. Copyright Springer-Verlag Berlin Heidelberg 2013

Suggested Citation

  • Luciano Fanti & Mimmo Iannelli & Piero Manfredi, 2013. "Neoclassical growth with endogenous age distribution. Poverty vs low-fertility traps as steady states of demographic transitions," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1457-1484, October.
  • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1457-1484
    DOI: 10.1007/s00148-012-0446-4
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    4. N. Renuga Nagarajan & Aurora A. C. Teixeira & Sandra T. Silva, 2021. "Ageing Population: Identifying the Determinants of Ageing in the Least Developed Countries," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 40(2), pages 187-210, April.

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