Demography, Financial Openness, National Savings and External Balance
KOF Working Paper No. 194
31 Pages Posted: 18 Apr 2008
Date Written: April 1, 2008
Abstract
This paper examines the impact of demographic factors on saving, investment, and external balances. We derive a number of semi-structural equations from national accounting principle and the principle that external balances for the world as a whole must sum to zero. The resulting equations embody both closed, partially open and completely open economies as special cases, and are arguably more properly specified than those previously used in the literature. We apply these semi-structural equations to a large panel data set. While our findings by and large are in agreement with most previous studies, our semi-structural equations give much more plausible estimation results for saving and investment than conventional specification.
Keywords: Demography, openness, saving, investment, current account, panel data
JEL Classification: E21, F32, J10
Suggested Citation: Suggested Citation
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