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A Politico-Economic Model of Aging, Technology Adoption and Growth

Giovanni Prarolo () and Francesco Lancia

No 2007.48, Working Papers from Fondazione Eni Enrico Mattei

Abstract: Over the past century, all OECD countries have been characterized by a dramatic increase in economic conditions, life expectancy and educational attainment. This paper provides a positive theory that explains how an economy might evolve when the longevity of its citizens both influences and is influenced by the process of economic development. We propose a three periods OLG model where agents, during their lifetime, cover different economic roles characterized by different incentive schemes and time horizon. Agents’ decisions embrace two dimensions: the private choice about education and the public one upon innovation policy. The theory focuses on the crucial role played by heterogeneous interests in determining innovation policies, which are one of the keys to the growth process: the economy can be discontinuously innovation-oriented due to the different incentives of individuals and different schemes of political aggregation of preferences. The model produces multiple development regimes associated with different predictions about life expectancy evolution, educational investment dynamics, and technology adoption policies. Transitions between these regimes depend on initial conditions and parameter values.

Keywords: Growth; Life Expectancy; Human Capital; Systemic Innovation; Majority Voting (search for similar items in EconPapers)
JEL-codes: D70 J10 O14 O31 O43 (search for similar items in EconPapers)
Date: 2007-04
New Economics Papers: this item is included in nep-age, nep-dev, nep-ino and nep-pol
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Related works:
Journal Article: A politico-economic model of aging, technology adoption and growth (2012) Downloads
Working Paper: A Politico-Economic Model of Aging, Technology Adoption and Growth (2007) Downloads
Working Paper: A Politico-Economic Model of Aging, Technology Adoption and Growth (2007) Downloads
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