Aging and International Capital Flows | Munich Center for the Economics of Aging - MEA
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Publication Series of the MPI for Social Policy

Aging and International Capital Flows

Content Throughout the world, population aging is a major challenge that will continue well into the 21st century. While the patterns of the demographic transition are similar in most countries, timing differs substantially, in particular between industrialized and less developed countries. To the extent that capital is internationally mobile, population aging will therefore induce capital flows between countries. In order to quantify these international capital flows, we employ a multi-country overlapping generations model and combine it with long-term demographic projections for several world regions over a 50 year horizon. Our simulations suggest that capital flows from fast-aging industrial countries (such as Germany and Italy) to the rest of the world will be substantial. Closed-economy models of pension reform are likely to miss quantitatively important effects of international capital mobility.
Publication Details
Boersch-Supan

Axel Börsch-Supan

csm_csm_ludwig_ec3d1edc9c_261289bc47

Alexander Ludwig

csm_csm_winter_4e9c137caf_aefce8c278

Joachim Winter

2002
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