Beggar thy thrifty neighbour: the international spillover effects of pensions under population ageing

Yvonne Adema (), Lex Meijdam () and Harrie A.A. Verbon
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Harrie A.A. Verbon: Tilburg University, Center for Economic Research

No 47, Discussion Paper from Tilburg University, Center for Economic Research

Abstract: This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems. We use a two-country twoperiod overlapping-generations model, where the two countries only differ in their pension schemes. Two forms of population ageing are considered, namely an increase in longevity and a fall in fertility. It is shown that in the long run a country using a funded pension system experiences negative spillovers from the fact that the other country uses a PAYG system. The short-run spillovers, however, are opposite to the spillovers in the long run.

JEL-codes: F21 H55 J11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-pbe
Date: 2006
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