IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

The macroeconomic dynamics of demographic shocks

  • Heijdra, Ben J.
  • Ligthart, Jenny E.

    (Groningen University)

The paper employs an extended Yaari-Blanchard model of overlapping generations to study how the macroeconomy is affected over time by various demographic changes. It is shown that a proportional decline in fertility and death rates has qualitatively similar effects to capital income subsidies; both per capita savings and per capita consumption increase in the new steady state. A drop in the birth rate, while keeping the death rate constant, reduces per capita savings, but increases per capita consumption, particularly if intertemporal labor supply is very elastic. If the generational turnover effect is sufficiently strong, however, a decline in the birth rate may, contrary to standard results, gives rise to an increase in per capita savings. Finally, a fertility rate reduction which leaves unaffected the rate of generational turnover is shown to have effects qualitatively similar to those of a fall in public consumption. Both per capita savings and per capita output decline, but per capita consumption rises. The non-linear model is simulated to study the quantitative effects of non-infinitesimal demographic shocks.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://irs.ub.rug.nl/ppn/263314154
Download Restriction: no

Paper provided by University of Groningen, CCSO Centre for Economic Research in its series CCSO Working Papers with number 200403.

as
in new window

Length:
Date of creation: 2004
Date of revision:
Handle: RePEc:dgr:rugccs:200403
Contact details of provider: Postal: PO Box 800, 9700 AV Groningen
Phone: +31 50 363 7185
Fax: +31 50 363 3720
Web page: http://ccso.eldoc.ub.rug.nl/
Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:dgr:rugccs:200403. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joke Bulthuis)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.