Demography, Financial Openness, National Savings and External Balance

KOF Working Paper No. 194

31 Pages Posted: 18 Apr 2008

See all articles by Michael Graff

Michael Graff

ETH Zurich

Kam Ki Tang

University of Queensland - School of Economics

Jie Zhang

National University of Singapore (NUS) - Department of Economics

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

Graff, Michael and Tang, Kam Ki and Zhang, Jie, Demography, Financial Openness, National Savings and External Balance (April 1, 2008). KOF Working Paper No. 194, Available at SSRN: https://ssrn.com/abstract=1121295 or http://dx.doi.org/10.2139/ssrn.1121295

Michael Graff (Contact Author)

ETH Zurich ( email )

KOF Swiss Economic Institute
Leonhardstrasse 21
CH-8092 Zurich, 8092
Switzerland

Kam Ki Tang

University of Queensland - School of Economics ( email )

Brisbane, QLD 4072
Australia
+61 07 3365 9796 (Phone)
+61 07 3365 7299 (Fax)

HOME PAGE: http://www.uq.edu.au/economics/index.html?page=15910&pid=15834

Jie Zhang

National University of Singapore (NUS) - Department of Economics ( email )

1 Arts Link, AS2 #06-02
Singapore 117570, Singapore 119077
Singapore

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