Ageing, government budgets, retirement, and growth
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Ageing, government budgets, retirement, and growth. / Gonzalez Eiras, Martin; Niepelt, Dirk.
I: European Economic Review, Bind 56, Nr. 1, 01.2012, s. 97-115.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - Ageing, government budgets, retirement, and growth
AU - Gonzalez Eiras, Martin
AU - Niepelt, Dirk
N1 - JEL classification: E62; H5; J26
PY - 2012/1
Y1 - 2012/1
N2 - 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.
AB - 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.
KW - Faculty of Social Sciences
KW - ageing
KW - government budgets
KW - retirement
KW - growth
M3 - Journal article
VL - 56
SP - 97
EP - 115
JO - European Economic Review
JF - European Economic Review
SN - 0014-2921
IS - 1
ER -
ID: 46842647