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Author Gonzalez-Eiras, Martín ♦ Niepelt, Dirk
Source EconStor
Content type Text
Publisher Center for Economic Studies and Ifo Institute (CESifo)
File Format PDF
Language English
Subject Domain (in DDC) Social sciences ♦ Economics
Subject Keyword ageing ♦ government budgets ♦ retirement ♦ growth ♦ Alternde Bevölkerung ♦ Bevölkerungsökonomie ♦ Overlapping Generations ♦ Wirtschaftswachstum ♦ Öffentlicher Haushalt ♦ Altersgrenze ♦ Theorie ♦ Fiscal Policy ♦ National Government Expenditures and Related Policies: General ♦ Retirement; Retirement Policies
Abstract We analyze the short and long run effects of demographic ageing - increased longevity and reduced fertility - on per-capita growth. The OLG model captures direct effects, working through adjustments in the savings rate, labor supply, and capital deepening, and indirect effects, working through changes of taxes, government spending components and the retirement age in politico-economic equilibrium. Growth is driven by capital accumulation and productivity increases fueled by public investment. The closed-form solutions of the model predict taxation and the retirement age in OECD economies to increase in response to demographic ageing and per-capita growth to accelerate. If the retirement age were held constant, the growth rate in politico-economic equilibrium would essentially remain unchanged, due to a surge of social security transfers and crowding out of public investment.
Part of series CESifo Working Paper x3352
Learning Resource Type Article
Publisher Date 2011-01-01
Publisher Place Munich
Rights Holder