IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

Demographic Transition and International Flows of Capital: What Can an OLG Model Tell Us?

Listed author(s):
  • Team INGENUE
Registered author(s):

    DEMOGRAPHIC TRANSITION AND INTERNATIONAL FLOWS OF CAPITAL: WHAT CAN AN OLG MODEL TELL US? INGENUE Team (Aglietta CEPII , Breton MODEM , Chateau CEPII , Fayolle OFCE , Juillard CEPREMAP , LeCacheux OFCE , Touze OFCE ) Demographic transition happens and will continue to unfold at different rythms in different region of the world. That means that the concentration of high saving groups will move from region to region and so will the location of the largest groups in age of working which in turn determines the location of most profitable investment. Important flows of capital between regions would result. In order to study this question, we built INGENUE, a world--wide, multiregional, general equilibrium, overlaping generation model. Its general architecture has been presented at last conference. This year, we want to report on first results and methodological difficulties that one encounters in such endeavour. The basic scenario takes the historical situation at the end of the XXth century as initial conditions and simulates households consumption and saving decisions in a transition toward a very far away balanced growth path. The demography is taken as given and is based on UN population forecasts. Technological change and the speed of convergence of productivity between regions is as well taken as given. Many OLG models have been calibrated to national economies. However, at a world level, there is a much greater degree of uncertainty concerning the value of key parameters. This makes only more necessary a detailed sensitivity analysis which we present in the paper. Among others, we present different scenarios concerning the speed of convergence and future evolution of life expectancy. As one can expect in such a model, the institutions of social security (in particular the relative importance of the pay--as--you--go system) play a crucial role in the determination of savings. So different policy experiments are conducted, varying the age of retirement, the amount of social security benefits or the rate of social security tax. In conclusion, we present the main areas needing improvement and outline the main ideas for a second stage in our modeling effort.

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below under "Related research" whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2001 with number 212.

    in new window

    Date of creation: 01 Apr 2001
    Handle: RePEc:sce:scecf1:212
    Contact details of provider: Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:sce:scecf1:212. 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: (Christopher F. Baum)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 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.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.