Demographic change, international trade and capital flows

Research output: Contribution to journalArticleScientificpeer-review

Abstract

Trade in goods that are not perfect substitutes can considerably change the predictions of standard neoclassical models about the effects of demographic
developments. This paper considers a relative decrease in the population size of one country, when countries specialize in the production of different intermediate goods. The degree of substitutability is crucial for the direction of capital flows between the countries and for the development of wages. The less those goods are substitutes, the stronger the long-run international spillover effects of a demographic shock will be. For the interest rate effects, also international differences in saving rates due to e.g., different pension schemes have to be taken into account.
LanguageEnglish
Pages865-883
JournalOpen Economies Review
Volume25
Issue number5
Early online date27 May 2014
DOIs
StatePublished - 2014

Fingerprint

Capital flows
Trade flows
Substitute
International trade
Demographic change
Neoclassical model
International spillovers
Prediction
Demographic shocks
Substitutability
Wages
Pension scheme
Intermediate goods
Interest rates
Demographics
Saving rate
Spillover effects

Keywords

  • International trade
  • demographic shock
  • overlapping generations
  • pensions
  • spillover effects

Cite this

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title = "Demographic change, international trade and capital flows",
abstract = "Trade in goods that are not perfect substitutes can considerably change the predictions of standard neoclassical models about the effects of demographicdevelopments. This paper considers a relative decrease in the population size of one country, when countries specialize in the production of different intermediate goods. The degree of substitutability is crucial for the direction of capital flows between the countries and for the development of wages. The less those goods are substitutes, the stronger the long-run international spillover effects of a demographic shock will be. For the interest rate effects, also international differences in saving rates due to e.g., different pension schemes have to be taken into account.",
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author = "I. Fedotenkov and {van Groezen}, B.J.A.M. and A.C. Meijdam",
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Demographic change, international trade and capital flows. / Fedotenkov, I.; van Groezen, B.J.A.M.; Meijdam, A.C.

In: Open Economies Review, Vol. 25, No. 5, 2014, p. 865-883.

Research output: Contribution to journalArticleScientificpeer-review

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