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Demography, national savings and international capital flows

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Abstract

This paper addresses the relationship between age distributions, national savings and the current account balance. The results point to substantial demographic effects, with increases in both the youth and old-age dependency ratios associated with lower savings rates. They also point to differential effects on savings and investment, and thus to a role for demography in determining the current account balance. The estimated demographic effect on the current account balance exceeds six percent of GDP over the last three decades for a number of countries and, given expected demographic trends, is likely to be substantially larger over the coming decades.

Suggested Citation

  • Matthew Higgins, 1997. "Demography, national savings and international capital flows," Staff Reports 34, Federal Reserve Bank of New York.
  • Handle: RePEc:fip:fednsr:34
    Note: For a published version of this report, see Matthew Higgins, "Demography, National Savings, and International Capital Flows," International Economic Review 39, no. 2 (May 1998): 343-69.
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    More about this item

    Keywords

    demography; saving and investment; capital movements;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • J1 - Labor and Demographic Economics - - Demographic Economics

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