The growth effects of anticipated versus unanticipated population aging

Anton O. Belyakov; Alexey N. Kurbatskiy; Klaus Prettner

doi:10.1016/j.jmateco.2020.102457

The growth effects of anticipated versus unanticipated population aging

Anton O. Belyakov, Alexey N. Kurbatskiy, Klaus Prettner

Department of Economics (Crespo Cuaresma)

Publication: Scientific journal › Journal article › peer-review

Abstract

We analyze the effects of anticipated population aging within a general equilibrium R&D-based endogenous growth model with overlapping generations. In doing so we model aging as a rise of longevity and a simultaneous drop in fertility. In contrast to an unanticipated rise of longevity, consumers increase their savings and reduce their consumption long before the rise of longevity actually happens. This implies that individuals save more in anticipation of aging, which puts downward pressure on the interest rate and raises economic growth through an increase in R&D incentives. Irrespective of the anticipation effect, the economic change at impact is not smooth but still features a kink in consumption.

Original language	English
Pages (from-to)	102457
Journal	Journal of Mathematical Economics
Volume	94
DOIs	https://doi.org/10.1016/j.jmateco.2020.102457
Publication status	Published - 2021

Austrian Classification of Fields of Science and Technology (ÖFOS)

502018 Macroeconomics
504006 Demography

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title = "The growth effects of anticipated versus unanticipated population aging",

abstract = "We analyze the effects of anticipated population aging within a general equilibrium R&D-based endogenous growth model with overlapping generations. In doing so we model aging as a rise of longevity and a simultaneous drop in fertility. In contrast to an unanticipated rise of longevity, consumers increase their savings and reduce their consumption long before the rise of longevity actually happens. This implies that individuals save more in anticipation of aging, which puts downward pressure on the interest rate and raises economic growth through an increase in R&D incentives. Irrespective of the anticipation effect, the economic change at impact is not smooth but still features a kink in consumption.",

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AU - Belyakov, Anton O.

AU - Kurbatskiy, Alexey N.

AU - Prettner, Klaus

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Y1 - 2021

N2 - We analyze the effects of anticipated population aging within a general equilibrium R&D-based endogenous growth model with overlapping generations. In doing so we model aging as a rise of longevity and a simultaneous drop in fertility. In contrast to an unanticipated rise of longevity, consumers increase their savings and reduce their consumption long before the rise of longevity actually happens. This implies that individuals save more in anticipation of aging, which puts downward pressure on the interest rate and raises economic growth through an increase in R&D incentives. Irrespective of the anticipation effect, the economic change at impact is not smooth but still features a kink in consumption.

AB - We analyze the effects of anticipated population aging within a general equilibrium R&D-based endogenous growth model with overlapping generations. In doing so we model aging as a rise of longevity and a simultaneous drop in fertility. In contrast to an unanticipated rise of longevity, consumers increase their savings and reduce their consumption long before the rise of longevity actually happens. This implies that individuals save more in anticipation of aging, which puts downward pressure on the interest rate and raises economic growth through an increase in R&D incentives. Irrespective of the anticipation effect, the economic change at impact is not smooth but still features a kink in consumption.

UR - https://www.sciencedirect.com/science/article/pii/S0304406820301348

U2 - 10.1016/j.jmateco.2020.102457

DO - 10.1016/j.jmateco.2020.102457

M3 - Journal article

SN - 0304-4068

VL - 94

SP - 102457

JO - Journal of Mathematical Economics

JF - Journal of Mathematical Economics

ER -

The growth effects of anticipated versus unanticipated population aging

Abstract

Austrian Classification of Fields of Science and Technology (ÖFOS)

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