The south's demographic transition and international capital flows in a financially integrated world economy
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1 octobre 2019
- ISIDORE Id: 10670/1.51c88a...
- hal: hal-03403272
- SCIENCESPO: 2441/5mcsclpvpm8lsadm6engnbebt7
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Mots-clés
International capital flows OLG Demographic transition D - Microeconomics/D.D9 - Intertemporal Choice/D.D9.D91 - Intertemporal Household Choice • Life Cycle Models and Saving F - International Economics/F.F4 - Macroeconomic Aspects of International Trade and Finance/F.F4.F40 - General J - Labor and Demographic Economics/J.J1 - Demographic Economics/J.J1.J10 - General O - Economic Development, Innovation, Technological Change, and Growth/O.O3 - Innovation • Research and Development • Technological Change • Intellectual Property Rights/O.O3.O33 - Technological Change: Choices and Consequences • Diffusion ProcessesSujets proches
Capital outflow Capital flows Movements of capital Capital inflow Flight of capital Flow of capital Capital flightCiter ce document
Frédéric Gannon et al., « The south's demographic transition and international capital flows in a financially integrated world economy », HAL SHS (Sciences de l’Homme et de la Société), ID : 10670/1.51c88a...
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Résumé
In the coming decades, the countries of the South will be facing the aging of the population faster than the countries of theNorth. This will have long-term economic consequences for the South but also for the North through the changing ofinternational capital flows. To study the latter, we build a simple two-region two-period OLG model, assuming fully integratedfinancial markets. This allows us to determine the analytical expression of the world interest rate dynamics at generalequilibrium and the resulting capital flows accruing to each of the two regions (the North and the South). From there, weanalyse how a reduction in either fertility or mortality alters the magnitude of the international capital flows. Contradictoryeffects are evidenced. To clear up any ambiguity and to study the South's demographic transition, which involves asuccession of shocks, we propose numerical simulations. Even if the results stress that the institutional context andtechnological catching-up may matter, they suggest in a rather general way that the declines in both fertility and mortalitytend to reduce the relative capital needs of the Southern economies and consequently their capital inflows. This, in turn,would be beneficial to the North's productive capacity, which should then hold more capital.
