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Growth and Longevity from the Industrial Revolution to the Future of an Aging Society

  • de la Croix, David

    (Université catholique de Louvain)

  • Lindh, Thomas

    ()

    (Institute for Futures Studies)

  • Malmberg, Bo

    ()

    (Institute for Futures Studies)

Aging of the population will affect the growth path of all countries. To assess the historical and future importance of this claim we use two popular approaches and evaluate their merits and disadvantages by confronting them to Swedish data. We first simulate an endogenous growth model with human capital linking demographic changes and income growth. Rising longevity increases the incentive to get education, which in turn has ever-lasting effects on growth through a human capital externality. Secondly, we consider a reduced-form statistical model based on the demographic dividend literature. Assuming that there is a common DGP guiding growth through the demographic transition, we use an estimate from post-war global data to backcast the Swedish historical GDP growth. Comparing the two approaches, encompassing tests show that each of them contains independent information on the Swedish growth path, suggesting that there is a benefit from combining them for long-term forecasting.

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Paper provided by Institute for Futures Studies in its series Arbetsrapport with number 2006:9.

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Length: 37 pages
Date of creation: Jun 2006
Date of revision:
Handle: RePEc:hhs:ifswps:2006_009
Note: ISSN 1652-120X; ISBN 13: 978-91-89655-92-8; ISBN 10: 91-89655-92-3
Contact details of provider: Postal:
Institute for Futures Studies, Box 591, SE-101 31 Stockholm, Sweden

Phone: 08-402 12 00
Fax: 08-24 50 14
Web page: http://www.framtidsstudier.se
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  1. Allen Kelley & Robert Schmidt, 2005. "Evolution of recent economic-demographic modeling: A synthesis," Journal of Population Economics, Springer;European Society for Population Economics, vol. 18(2), pages 275-300, 06.
  2. BOUCEKKINE, Raouf & PEETERS, Dominique & de la CROIX, David, . "Early literacy achievements, population density and the transition to modern growth," CORE Discussion Papers RP 1911, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  3. BOUCEKKINE, Raouf & de la CROIX, David & LICANDRO, Omar, 2002. "Early mortality declines at the dawn of modern growth," CORE Discussion Papers 2002030, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  6. DE LA CROIX, David & DOEPKE, Matthias, 2001. "Inequality and Growth : Why Differential Fertility Matters," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001008, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  7. Raouf Boucekkine & David de la Croix & Omar Licandro, . "vintage human capital, demographic trends and endogenous growth," Working Papers 2000-02, FEDEA.
  8. de la Croix, David & Licandro, Omar, 1999. "Life expectancy and endogenous growth," Economics Letters, Elsevier, vol. 65(2), pages 255-263, November.
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  18. Francis X. Diebold & Jose A. Lopez, 1995. "Forecast evaluation and combination," Research Paper 9525, Federal Reserve Bank of New York.
  19. Nils-Petter Lagerlöf, 2003. "From Malthus to Modern Growth: Can Epidemics Explain the Three Regimes?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(2), pages 755-777, 05.
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