Economics at your fingertips  

Fertility, Longevity and International Capital Flows

Zsofia Barany (), Nicolas Coeurdacier and Stéphane Guibaud
Additional contact information
Stéphane Guibaud: Département d'économie

Sciences Po publications from Sciences Po

Abstract: The neoclassical growth model predicts large capital flows towards fast-growing emerging countries. We show that incorporating fertility and longevity into a lifecycle model of savings changes the standard predictions when countries differ in their ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers capital flows from emerging to developed countries, and countries’ current account positions respond to growth adjusted by current and expected demographic composition. Data on international capital flows are broadly supportive of the theory. The fact that fast-growing emerging countries are also aging faster, while having less developed credit markets and pension systems, explains why they are more likely to export capital. Our quantitative multi-country overlapping generations model explains a significant fraction of the patterns of capital flows, across time and across developed and emerging countries.

Date: 2015-06
New Economics Papers: this item is included in nep-age, nep-dge, nep-gro and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) ... ty-capital-flows.pdf (application/pdf)

Related works:
Working Paper: Fertility, Longevity and International Capital Flows (2015) Downloads
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:

Access Statistics for this paper

More papers in Sciences Po publications from Sciences Po Contact information at EDIRC.
Bibliographic data for series maintained by Spire @ Sciences Po Library ().

Page updated 2021-10-21
Handle: RePEc:spo:wpmain:info:hdl:2441/5402sfihji9vea8rb66cd9nphe