Pensions and Savings in a Monetary Union: an Analysis of Capital Flows

Alain Jousten and Florence Legros

No 3509, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We analyse the economic impact of a simultaneous aging shock in two countries. The countries are identical in all respects except the financing scheme of their public pension system. While one relies on capitalization, the other one relies on a pay-as-you-go scheme. We show that the two countries react very differently to the demographic shock and its financial implications. Further, we find that the presence or the absence of capital mobility considerably affects the results, both in terms of the size of the burden as in terms of international capital allocation.

Keywords: Social security; Ageing; International factor mobility (search for similar items in EconPapers)
JEL-codes: F21 H55 (search for similar items in EconPapers)
Date: 2002-08
New Economics Papers: this item is included in nep-cba, nep-ifn, nep-lab and nep-mac
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Citations: View citations in EconPapers (4)

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Related works:
Chapter: Pensions and Savings in a Monetary Union: An Analysis of Capital Flows (2005)
Working Paper: Pensions and Savings in a Monetary Union: an Analysis of Capital Flows (2002)
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