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Patterns of Trade between Countries with Differing Age Compositions of Populations: An Overlapping Generations General Equilibrium Analysis


  • Serdar Sayan


This paper considers a two-country world where the population in one country grows faster than the other, and investigates the effects of resulting age composition differences across countries on international trade flows under alternative simulation scenarios, using an overlapping-generations general equilibrium model. The differing age compositions of populations are shown to give rise to differentials in wage rates and rentals for capital under autarky conditions. This, in turn, causes costs of production and relative prices to differ, creating the grounds for trade. After exploring the patterns of trade between the country with the relatively young and faster-growing population and the low-population growth country experiencing population aging, the paper discusses the implications of simulation results for trade between such young-population countries as Mexico and Turkey and their regional partners within NAFTA and the EU, where population aging has long set in.

Suggested Citation

  • Serdar Sayan, 2001. "Patterns of Trade between Countries with Differing Age Compositions of Populations: An Overlapping Generations General Equilibrium Analysis," Computing in Economics and Finance 2001 252, Society for Computational Economics.
  • Handle: RePEc:sce:scecf1:252

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    Cited by:

    1. Serdar Sayan, 2002. "Dynamic Heckscher-Ohlin Results from a 2x2x2x2 Overlapping Generations Model with Unequal Population Growth Rates," Working Papers 0201, Department of Economics, Bilkent University.

    More about this item


    Trade; Economics of aging; simulation; Overlapping generations;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • J10 - Labor and Demographic Economics - - Demographic Economics - - - General
    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General


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