Capital Flows in an Aging World
Zsofia Barany (),
Nicolas Coeurdacier and
No 13180, CEPR Discussion Papers from C.E.P.R. Discussion Papers
We investigate the importance of worldwide demographic evolutions in shaping capital flows across countries and over time. Our lifecycle model incorporates cross-country differences in fertility and longevity as well as differences in countries' ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers uphill capital flows from emerging to advanced economies, while country-specific demographic evolutions reallocate capital towards countries aging more slowly. Our quantitative multi-country overlapping generations model explains a large fraction of capital flows across advanced and emerging countries and a substantial portion of the prolonged decline in the world interest rate.
Keywords: aging; Household Saving; International Capital Flows (search for similar items in EconPapers)
JEL-codes: E21 F21 J11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dge, nep-mac and nep-opm
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Working Paper: Capital Flows in an Aging World (2018)
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