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International trade with pensions and demographic shocks

Igor Fedotenkov, Bas van Groezen and Lex Meijdam

MPRA Paper from University Library of Munich, Germany

Abstract: The central question of this paper is how international trade and specialization are affected by different designs of pension schemes and asymmetric demographic changes. In a model with two goods, two countries and two production factors, we find that countries with a relatively large unfunded pension scheme will specialize in the production of labour intensive goods. If these countries are hit by a negative demographic shock, this specialization will intensify in the long run. Eventually, these countries may even completely specialize in the production of those goods. The effects spill over to other countries, which will move away from complete specialization in capital intensive goods as the relative size of their labour intensive goods sector will also increase.

Keywords: demographics; international spillovers; pensions; trade; specialization (search for similar items in EconPapers)
JEL-codes: E27 F11 F16 H55 J11 (search for similar items in EconPapers)
Date: 2012-03, Revised 2016-05-31
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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