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Finite Lifetimes, Population, and Growth

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  • Bharat Diwakar
  • Gilad Sorek

Abstract

This work highlights principle differences in the predictions of R&D-based growth theory derived from the infinite horizon framework and the Overlapping Generations (OLG) framework of finitely living agents. In particular we show that the counterfactual positive effect of population growth on output growth presented in the second and third generation R&D-based growth models is eliminated in the corresponding OLG framework with finitely living agents. These differences arise because of the limiting effect of labor income on saving that presents only in the OLG framework. Our results indicate that the counterfactual relations between population and output growth rates presented in current R&D-based growth models are driven by their specific demographic structure.

Suggested Citation

  • Bharat Diwakar & Gilad Sorek, 2015. "Finite Lifetimes, Population, and Growth," Auburn Economics Working Paper Series auwp2015-14, Department of Economics, Auburn University.
  • Handle: RePEc:abn:wpaper:auwp2015-14
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    File URL: http://cla.auburn.edu/econwp/Archives/2015/2015-14.pdf
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    References listed on IDEAS

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    Cited by:

    1. Bharat Diwakar & Gilad Sorek, 2015. "Economic Development and Stage-Dependent IPR," Auburn Economics Working Paper Series auwp2015-16, Department of Economics, Auburn University.
    2. repec:eee:jrpoli:v:55:y:2018:i:c:p:233-243 is not listed on IDEAS
    3. repec:eee:rensus:v:79:y:2017:i:c:p:414-439 is not listed on IDEAS

    More about this item

    Keywords

    R&D; Growth; Population; Overlapping Generations;

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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