Population Aging and Global Capital Flows in a Parallel Universe
August 1, 2000
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Summary
This paper explores the global impact of population aging, using a calibrated overlapping generations model of eight world regions to simulate the effects of historical and projected demographic trends on international capital flows. The simulations show that there will be a turning point in regional savings – investment balances between 2010 and 2030 when the European Union and North America will experience a substantial decline in savings relative to investment as their populations age rapidly. This shift will be financed by capital flows from less developed regions which are projected to become capital exporters.
Subject: Aging, Balance of payments, Current account, Current account balance, Current account deficits, Demographic change, Population and demographics
Keywords: Africa, age distribution, Aging, balance in the EU, capital deepening, Current account, Current account balance, Current account deficits, current account switch, Demographic change, EU current account, EU experience, Global, interest rate, international capital flows, JAP relative, North America, population aging, productivity parameter, real GDP, WP
Pages:
31
Volume:
2000
DOI:
Issue:
151
Series:
Working Paper No. 2000/151
Stock No:
WPIEA1512000
ISBN:
9781451857023
ISSN:
1018-5941
