International trade and capital accumulation in an overlapping generations model with a public intermediate good

2019 ◽  
Vol 27 (3) ◽  
pp. 765-785
Author(s):  
Tsuyoshi Shinozaki ◽  
Makoto Tawada ◽  
Mitsuyoshi Yanagihara
Keyword(s):  
International Trade ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Intermediate Good ◽  
Overlapping Generations Model

scholarly journals ENVIRONMENTAL POLICY, EDUCATION AND GROWTH: A REAPPRAISAL WHEN LIFETIME IS FINITE

2011 ◽  
Vol 16 (5) ◽  
pp. 661-685 ◽  
Author(s):  
Xavier Pautrel
Keyword(s):  
Human Capital ◽  
Environmental Policy ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Monetary Economics ◽  
Physical Capital ◽  
Positive Influence ◽  
Overlapping Generations Model ◽  
Final Output ◽  
Source Of Pollution

When finite lifetime is introduced in a Lucas [Journal of Monetary Economics 22 (1988), 3–42] growth model where the source of pollution is physical capital, the environmental policy may enhance the growth rate of a market economy, whereas pollution does not influence educational activities, labor supply is not elastic, and human capital does not enter the utility function. The result arises from the generational turnover effect due to finite lifetime and it remains valid under conditions when the education sector uses final output as well as time to accumulate human capital. This article also demonstrates that ageing reduces the positive influence of environmental policy when growth is driven by human capital accumulation à la Lucas in the overlapping-generations model of Yaari [Review of Economic Studies 32 (1965), 137–150] and Blanchard [Journal of Political Economy 93 (1985), 223–247].

scholarly journals External Habits Formation and the Environment

2021 ◽  
Vol 67 (1) ◽  
pp. 1-12
Author(s):  
Fatma Safi
Keyword(s):  
Utility Function ◽  
Environmental Quality ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Competitive Equilibrium ◽  
Cohort Size ◽  
Overlapping Generations Model ◽  
The Impact

Abstract The present paper presents a standard overlapping generations model with external habits formation and environmental quality in the utility function. Our main objective is to study the impact of external habits on capital accumulation and environmental quality on the intertemporal competitive equilibrium. We notice that striving for status leads to environment worsening and capital increasing when the cohort size is large.

scholarly journals Complementary funded pensions and economic growth: Theoretical and empirical evidence using an overlapping generations model applied to the case of Tunisia

2021 ◽  
Vol 66 (231) ◽  
pp. 59-97
Author(s):  
Houyem Chekki Cherni
Keyword(s):  
Economic Growth ◽  
Computable General Equilibrium ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Pension Reform ◽  
Computable General Equilibrium Model ◽  
Pension Scheme ◽  
Overlapping Generations Model ◽  
Funded Pensions ◽  
Theoretical Results

This paper presents a prospective analysis to guide effective pension reform. Using an overlapping generations model with differing returns on free savings and compulsory returns on funded pensions, we put into perspective the results largely supported in the economic literature that assume that replacing a pay-as-you-go pension scheme by funded plans boosts economic growth. We show that this reform is not necessarily synonymous with economic growth due to a crowding-out effect. Our contribution is not limited to theoretical results: we also assess the impacts empirically. Thus, we extend the theoretical model to take into account several periods and 55 generations. Simulation results, using a dynamic overlapping generations computable general equilibrium model calibrated for the Tunisian case, indicate that whether pension reform promotes capital accumulation and economic growth depends on the rate of return on funded pension savings relative to free savings.

scholarly journals Stimulating annuity markets

2016 ◽  
Vol 16 (4) ◽  
pp. 554-583
Author(s):  
BEN J. HEIJDRA ◽  
JOCHEN O. MIERAU ◽  
TIMO TRIMBORN
Keyword(s):  
General Equilibrium ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Partial Equilibrium ◽  
Human Capital Accumulation ◽  
Overlapping Generations Model ◽  
Long Run ◽  
State Agents ◽  
Annuity Markets ◽  
Stimulation Of

AbstractWe study the short-, medium-, and long-run implications of stimulating annuity markets in a dynamic general-equilibrium overlapping-generations model. We find that beneficial partial-equilibrium effects of stimulating annuity markets are counteracted by negative general-equilibrium repercussions. Balancing the positive partial-equilibrium and negative general-equilibrium forces we show that there exists an intermediate level of annuitization such that the lifetime utility of steady-state agents is maximized. Studying the transition to this optimal degree of annuitization shows that currently middle-aged individuals stand to gain most from the stimulation of annuity markets. Complementing our main analysis, we highlight the centrality of the interplay between human-capital accumulation and annuity market policy.

scholarly journals POSTPONING RETIREMENT AND SOCIAL SECURITY IN A TWO-SECTOR MODEL

2021 ◽  
pp. 1-19
Author(s):  
PARTHA SEN
Keyword(s):  
Steady State ◽  
Social Security ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Retirement Age ◽  
Overlapping Generations Model ◽  
Payroll Tax ◽  
Tax Rate ◽  
Sector Model ◽  
State Capital

Pay-as-you-go social security schemes in the Organisation for Economic Co-operation and Development countries are facing solvency problems, as people are living longer and birth rates have declined. Postponing the full retirement age (FRA), when retirees are entitled to full pension, has been proposed as a solution. This effectively lowers the payroll tax rate since pension is paid only in the post-FRA period. In a two-period two-sector overlapping generations model, I show that this shift lowers savings (because a part of the expected old-age income is consumed in the first period), as employment increases. In the transition to the new steady state, capital is decumulated and the wage rate falls. Contrast this with a reduction of the payroll tax rate where the initial old suffer reduced consumption, but the young have higher post-tax income and this spurs capital accumulation.

Capital accumulation when consumers are tempted by others’ consumption experience

2019 ◽  
Vol 72 (3) ◽  
pp. 804-828
Author(s):  
Jaime Alonso-Carrera ◽  
Stéphane Bouché
Keyword(s):  
Peer Effects ◽  
Capital Accumulation ◽  
Overlapping Generations ◽  
Self Control ◽  
The Other ◽  
Crucial Point ◽  
Overlapping Generations Model ◽  
Consumption Experience ◽  
The Stability ◽  
Average Consumption

Abstract We analyse how the influence of peer effects on self-control affects capital accumulation. We consider an overlapping generations model where individuals are tempted to take the economy-wide average consumption as an aspiration. Consumers exhibit a preference for self-control. They face a self-control problem, and observing each other’s consumption determines the individual’s capacity to deal with this problem. We show that temptation and self-control may either increase or decrease the accumulation of capital. The crucial point would be whether or not consumers take the consumption of the individuals belonging to the other living generations as a reference in forming their aspirations. This point also crucially determines the stability properties of the equilibrium paths.

scholarly journals SAVINGS, INTERGENERATIONAL TRANSFERS, AND THE DISTRIBUTION OF WEALTH

2006 ◽  
Vol 10 (3) ◽  
pp. 371-414
Author(s):  
IGNACIO PONCE OCAMPO ◽  
KAZUHIRO YUKI
Keyword(s):  
Capital Accumulation ◽  
Overlapping Generations ◽  
Intergenerational Transfers ◽  
Overlapping Generations Model ◽  
Distribution Of Wealth ◽  
Annuity Markets ◽  
Earnings Uncertainty ◽  
The U.S ◽  
Quantitative Importance

This paper investigates the quantitative importance of different savings motives on the distributions of wealth and consumption and aggregate capital accumulation by solving an overlapping generations model with intragenerational heterogeneity. Agents differ in age, ability, earnings shocks, and inherited bequests. In the baseline economy, there are uninsurable idiosyncratic risks associated with uncertain lifetime and earnings shocks. The model is calibrated to the U.S. economy and solved numerically. Then the allocations of the baseline economy are compared with those of an economy with complete annuity markets, one without earnings uncertainty, and one without altruism.

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