Beggar Thy Thrifty Neighbour: The International Spillover Effects of Pensions Under Population Ageing

Y. Adema, A.C. Meijdam, H.A.A. Verbon

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Abstract

This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems.We use a two-country twoperiod overlapping-generations model, where the two countries only differ in their pension schemes.Two forms of population ageing are considered, namely an increase in longevity and a fall in fertility.It is shown that in the long run a country using a funded pension system experiences negative spillovers from the fact that the other country uses a PAYG system.The short-run spillovers, however, are opposite to the spillovers in the long run.
Original languageEnglish
Place of PublicationTilburg
PublisherMacroeconomics
Number of pages33
Volume2006-47
Publication statusPublished - 2006

Publication series

NameCentER Discussion Paper
Volume2006-47

Keywords

  • ageing
  • pensions
  • spillovers

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