Economics at your fingertips  

The effects of education and aging in an OLG model: long-run growth in France, Germany and Italy

Michele Catalano () and Emilia Pezzolla
Additional contact information
Emilia Pezzolla: Prometeia Associazione per le previsioni econometriche

Empirica, 2016, vol. 43, issue 4, 757-800

Abstract: Abstract The purpose of the paper is to provide a long-run analysis up to 2050 of the interplay between financial integration, diverging labor productivity, and the aging process in the larger European countries. We use the Prometeia overlapping generation model for Italy, Germany, and France which are modeled as open economies in capital markets. Our projections provide a core-periphery structure in which Germany, the most abundant human capital country, shows the highest but a decreasing growth rate due to pronounced aging, and finances capital accumulation processes in France and Italy. We find that financial trends are reversed in the late 2010s when Italy begins to over-save as the gap in human capital endowment, and then in productivity, becomes larger compared to the other two countries. This leads to a reduction in physical capital accumulation and innovation processes in Italy. We employ fiscal experiments to correct the long-run divergent behavior of countries in order to get a more homogeneous growth rate path among countries. We also measure the impact of taxation on net-wealth in Italy, and evaluate the internal and spillover effects.

Keywords: Aging; Growth; Capital movements; Human capital; Secular stagnation; Core-Periphery dualism (search for similar items in EconPapers)
JEL-codes: F36 F43 E24 F21 J11 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link) Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from
http://www.springer. ... ration/journal/10663

Access Statistics for this article

Empirica is currently edited by Fritz Breuss and Fritz Breuss

More articles in Empirica from Springer, Austrian Institute for Economic Research, Austrian Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().

Page updated 2018-08-10
Handle: RePEc:kap:empiri:v:43:y:2016:i:4:d:10.1007_s10663-016-9351-5