Demography and Growth: A Unified Treatment of Overlapping Generations
We construct a unified overlapping-generations (OLG) framework of equilibrium growth that includes the Blanchard ï¿½perpetual youthï¿½ model, the Samuelson model, and the infinitely-lived representative agent growth model as limit specifications of a ï¿½realisticï¿½, two-parameter survivorship function. We analyze how demographic conditions affect the equilibrium growth and savings rates in an economy by computing equilibrium rates under different specifications of the survivorship function. Differences in population growth rates, life-expectancies, retirement durations, and the degree of concavity of the survivorship function are found to have significant impacts on equilibrium growth rates. The observed effects are consistent with some cross-country correlations between demographic conditions and growth rates. We also identify a potential ï¿½Malthusian growth trapï¿½ in economies where life expectancy is short, fertility rates are high, and households work most of their livesï¿½conditions often found in less developed economies.
|Date of creation:||Apr 2009|
|Date of revision:||Jun 2011|
|Contact details of provider:|| Postal: Box 353330, Seattle, WA 98193-3330|
Web page: http://www.econ.washington.edu/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bond, Eric W. & Wang, Ping & Yip, Chong K., 1996.
"A General Two-Sector Model of Endogenous Growth with Human and Physical Capital: Balanced Growth and Transitional Dynamics,"
Journal of Economic Theory,
Elsevier, vol. 68(1), pages 149-173, January.
- Bond, Eric W. & Wang, Ping & Yip, Chong K., 1993. "A general two-sector model of endogenous growth with human and physical capital: balanced growth and transitional dynamics," Working Papers 9324, Federal Reserve Bank of Dallas.
- An, Chong-Bum & Jeon, Seung-Hoon, 2006. "Demographic change and economic growth: An inverted-U shape relationship," Economics Letters, Elsevier, vol. 92(3), pages 447-454, September.
- Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2002. "Vintage Human Capital, Demographic Trends, and Endogenous Growth," Journal of Economic Theory, Elsevier, vol. 104(2), pages 340-375, June.
- Raouf Boucekkine & David de la Croix & Omar Licandro, "undated". "vintage human capital, demographic trends and endogenous growth," Working Papers 2000-02, FEDEA.
- Boucekkine, Raouf & de la Croix, David & Licandro, Omar, 2000. "Vintage Human Capital, Demographic Trends and Endogenous Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2000007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Antoine Bommier & Ronald D. Lee, 2003. "Overlapping generations models with realistic demography," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(1), pages 135-160, 02.
- Blanchard, Olivier J, 1985. "Debt, Deficits, and Finite Horizons," Journal of Political Economy, University of Chicago Press, vol. 93(2), pages 223-247, April.
- Olivier J. Blanchard, 1984. "Debt, Deficits and Finite Horizons," NBER Working Papers 1389, National Bureau of Economic Research, Inc.
- Burke, Jonathan L., 1996. "Equilibrium for Overlapping Generations in Continuous Time," Journal of Economic Theory, Elsevier, vol. 70(2), pages 364-390, August. Full references (including those not matched with items on IDEAS)