IDEAS home Printed from https://ideas.repec.org/p/fip/fedlwp/1994-001.html
   My bibliography  Save this paper

The baby boom and economic growth

Author

Listed:
  • Peter S. Yoo

Abstract

This paper presents a model of economic growth based on the life-cycle hypothesis to determine the path of capital accumulation and economic growth as the baby boom passes through the U.S. economy. The model predicts that a baby boom causes a temporary decline of the capital-labor ratio. The temporary drop of the capital-labor ratio requires a decrease in consumption per capita but as the baby boom generation nears retirement, capital intensity increases, which raises output per worker and per capita consumption. Furthermore, and perhaps counter intuitively, the model predicts that the saving rate of the economy falls during the period of increasing consumer welfare. These results suggest that consumer welfare may increase as the baby boom generation begins to retire near the turn of the century. Thus the retirement of the baby boom generation need not necessarily be a cause of concern.

Suggested Citation

  • Peter S. Yoo, 1994. "The baby boom and economic growth," Working Papers 1994-001, Federal Reserve Bank of St. Louis.
  • Handle: RePEc:fip:fedlwp:1994-001
    as

    Download full text from publisher

    File URL: http://research.stlouisfed.org/wp/more/1994-001/
    Download Restriction: no

    File URL: http://research.stlouisfed.org/wp/1994/94-001.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Fair, Ray C & Dominguez, Kathryn M, 1991. "Effects of the Changing U.S. Age Distribution on Macroeconomic Equations," American Economic Review, American Economic Association, vol. 81(5), pages 1276-1294, December.
    2. Mankiw, N. Gregory & Weil, David N., 1989. "The baby boom, the baby bust, and the housing market," Regional Science and Urban Economics, Elsevier, vol. 19(2), pages 235-258, May.
    3. William L. Wascher & Susan Weller Burch & John L. Goodman, 1986. "Economic implications of changing population trends," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Dec, pages 815-826.
    4. Clark, Robert L & Kreps, Juanita & Spengler, Joseph J, 1978. "Economics of Aging: A Survey," Journal of Economic Literature, American Economic Association, vol. 16(3), pages 919-962, September.
    5. David M. Cutler & James M. Poterba & Louise M. Sheiner & Lawrence H. Summers, 1990. "An Aging Society: Opportunity or Challenge?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 21(1), pages 1-74.
    6. repec:fth:harver:1490 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Demography ; Population;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlwp:1994-001. 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: (Kathy Cosgrove). General contact details of provider: http://edirc.repec.org/data/frbslus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.