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Finite Lifetimes, Population, and Growth

Bharat Diwakar and Gilad Sorek ()
Authors registered in the RePEc Author Service: Bharat Diwakar ()

No auwp2015-14, Auburn Economics Working Paper Series from Department of Economics, Auburn University

Abstract: This work highlights principle differences in the predictions of R&D-based growth theory derived from the infinite horizon framework and the Overlapping Generations (OLG) framework of finitely living agents. In particular we show that the counterfactual positive effect of population growth on output growth presented in the second and third generation R&D-based growth models is eliminated in the corresponding OLG framework with finitely living agents. These differences arise because of the limiting effect of labor income on saving that presents only in the OLG framework. Our results indicate that the counterfactual relations between population and output growth rates presented in current R&D-based growth models are driven by their specific demographic structure.

Keywords: R&D, Growth; Population; Overlapping Generations (search for similar items in EconPapers)
JEL-codes: O31 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dge, nep-fdg, nep-gro and nep-ino
Date: 2015-09
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