Demographic change, international trade and capital flows
Fedotenkov,I. van Groezen,B.J.A.M. Meijdam,A.C.
Fedotenkov,I.
van Groezen,B.J.A.M.
Meijdam,A.C.
Abstract
Trade in goods that are not perfect substitutes can considerably change the predictions of standard neoclassical models about the effects of demographic developments. This paper considers a relative decrease in the population size of one country, when countries specialize in the production of different intermediate goods. The degree of substitutability is crucial for the direction of capital flows between the countries and for the development of wages. The less those goods are substitutes, the stronger the long-run international spillover effects of a demographic shock will be. For the interest rate effects, also international differences in saving rates due to e.g., different pension schemes have to be taken into account.
Description
Date
2014
Journal Title
Journal ISSN
Volume Title
Publisher
Research Projects
Organizational Units
Journal Issue
Keywords
International trade, demographic shock, overlapping generations, pensions, spillover effects, F41 - Open Economy Macroeconomics, H55 - Social Security and Public Pensions, J11 - Demographic Trends, Macroeconomic Effects, and Forecasts
Citation
Fedotenkov, I, van Groezen, B J A M & Meijdam, A C 2014, 'Demographic change, international trade and capital flows', Open Economies Review, vol. 25, no. 5, pp. 865-883. https://doi.org/10.1007/s11079-014-9311-2