Demographics and the evolution of global imbalances

Michael Sposi

Journal of Monetary Economics, 2022, vol. 126, issue C, 1-14

Abstract: The age distribution influences capital flows through aggregate saving and labor supply. To quantify this, I build a dynamic model featuring overlapping generations and international trade among 28 countries since 1970. The equilibrium is replicated by a model with a representative household in each country that experiences an endogenous discount factor, which summarizes the co-evolution of demographics and relevant prices, affording computation of the exact transition. On average, a one-year increase a countrys mean age boosts its current account by 0.4 percent of GDP. Bilateral trade frictions dictate the cross-country response of capital flows to changes in a countrys demographics.

Keywords: Demographics; Global imbalances; Dynamics; International trade (search for similar items in EconPapers)
JEL-codes: F11 F21 J11 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Demographics and the Evolution of Global Imbalances (2021)
Working Paper: Demographics and the Evolution of Global Imbalances (2019)
Working Paper: Demographics and the Evolution of Global Imbalances (2019)
Working Paper: Demographics and the Evolution of Global Imbalances (2019)
Working Paper: Demographics and the Evolution of Global Imbalances (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:126:y:2022:i:c:p:1-14

DOI: 10.1016/j.jmoneco.2021.11.005

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