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International trade with pensions and demographic shocks

Listed author(s):
  • Fedotenkov, Igor
  • van Groezen, Bas
  • Meijdam, Lex

The central question of this paper is how international trade and specialization are affected by different designs of pension schemes and asymmetric demographic changes. In a model with two goods, two countries and two production factors, we find that countries with a relatively large unfunded pension scheme will specialize in the production of labour intensive goods. If these countries are hit by a negative demographic shock, this specialization will intensify in the long run. Eventually, these countries may even completely specialize in the production of those goods. The effects spill over to other countries, which will move away from complete specialization in capital intensive goods as the relative size of their labour intensive goods sector will also increase.

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File URL: https://mpra.ub.uni-muenchen.de/74874/1/MPRA_paper_74874.pdf
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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 74874.

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Date of creation: Mar 2012
Date of revision: 31 May 2016
Handle: RePEc:pra:mprapa:74874
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