Demographics and the Anatomy of International Capital Flows

Claus Vistesen ()

MPRA Paper from University Library of Munich, Germany

Abstract: This thesis is built upon two core arguments. The first is the notion that the demographic transition should be narrated through the perspective of ageing rather than population growth and the second is that ageing on a macroeconomic level represents a strong driver of international capital flows. These two arguments are used to discuss the standard prediction in a life cycle framework that ageing leads to dissaving in the aggregate and thus how old economies should tend towards running current account deficits. Using Japan and Germany as the subjects of analysis, this thesis develops the idea that rapidly ageing societies are not, in the main, characterized by dissaving but rather by the fight against it. Finally, a small empirical exercise acts as a perspectivation on the results to suggest why ageing might lead to a reliance on exports and foreign asset income to achieve growth and what this means in a global context.

Keywords: demographics; international capital flows; life cycle economics, (search for similar items in EconPapers)
JEL-codes: F02 J1 D91 E21 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age and nep-ifn
Date: 2010-02-16
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