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Savings, fertility and public policy in an OLG small open economy

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  • Luca Spataro
  • Luciano Fanti
  • Pier Mario Pacini

Abstract

In an OLG model of a small open economy we analyse the characteristics of saving and fertility under two different public policies: i) constant per capita taxes (and endogenous public debt) and ii) constant per-capita debt (and endogenous stabilizing taxes). Our analysis highlights that a fertility recovery (reduction resp.) requires always a reduction (increase resp.) of taxes, although the implications for public debt management are not trivial, since they depend on the regime the economy is experiencing, i.e. on the relationship between the interest rate and the fertility rate in absence of taxes.

Suggested Citation

  • Luca Spataro & Luciano Fanti & Pier Mario Pacini, 2017. "Savings, fertility and public policy in an OLG small open economy," Discussion Papers 2017/230, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
    • Handle: RePEc:pie:dsedps:2017/230
    Note: ISSN 2039-1854
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    Cited by:

    1. Spataro, Luca & Fanti, Luciano & Pacini, Pier Mario, 2019. "Saving, fertility and public policy in an overlapping generations small open economy," Economic Modelling, Elsevier, vol. 81(C), pages 16-29.

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    More about this item

    Keywords

    overlapping generations; endogenous fertility; savings; small open economy; public national debt;
    All these keywords.

    JEL classification:

    • D15 - Microeconomics - - Household Behavior - - - Intertemporal Household Choice; Life Cycle Models and Saving
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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