The Demographic Transition in Closed and Open Economies: A Tale of Two Regions

43 Pages Posted: 21 Apr 2011

See all articles by Giovanni L. Violante

Giovanni L. Violante

New York University, Department of Economics; Centre for Economic Policy Research (CEPR)

Orazio Attanasio

University College London - Department of Economics; Institute for Fiscal Studies (IFS); Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: February 2000

Abstract

This paper constructs a general equilibrium overlapping generation model to evaluate quantitatively how demographic transition (falling mortality and fertility rates) affects aggregate variables (wages, interest rate, output), and inter-generational welfare in closed and open economies. We perform this analysis for two economies calibrated to resemble the North (US and Europe) and Latin America. Our simulations suggest that the demographic transition could have generated income per capita growth up to 0. 5% per year in excess of steady-state growth in the past 50 years in Latin America and 0. 3% in the North.

Suggested Citation

Violante, Giovanni L. and Attanasio, Orazio, The Demographic Transition in Closed and Open Economies: A Tale of Two Regions (February 2000). IDB Working Paper No. 343. Available at SSRN: https://ssrn.com/abstract=1817210 or http://dx.doi.org/10.2139/ssrn.1817210

Giovanni L. Violante (Contact Author)

New York University, Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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Orazio Attanasio

University College London - Department of Economics ( email )

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Institute for Fiscal Studies (IFS)

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Centre for Economic Policy Research (CEPR)

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United Kingdom

National Bureau of Economic Research (NBER)

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