Demographic structure and capital accumulation

This paper develops an overlapping-generations (OLG) model to analyze the consequences of demographic structure changes induced by an exogenous shift in the birth rate.We first show that a finite growth rate of the population that maximizes long-run capital per capita exists. Then, we examine the theoretical properties of this growth rate by showing that: (i) it corresponds to the demographic structure such that the average ages of capital holders and workers are equal; (ii) it is associated to an efficient steady state; (iii) it increases with compulsory transfers from younger to older generations. Finally, we explain why standard OLG models do not exhibit such a growth rate.Continuous-time overlapping-generations models; Population aging

Parental altruism, life expectancy and dynamically inefficient equilibria

Macrodynamic models with finite lifetime and selfish individuals may feature (dynamically) inefficient equilibria, while models with infinite lifetime and altruistic individuals cannot. Do strong intergenerational altruism and high life expectancy prevent the occurence of inefficient equilibria? To answer this question, we present a continuous time OLG model which generalizes the Blanchard-Buiter-Weil model. Our main innovation relies on the introduction of parental altruism, whose intensity is variable. We show that parental altruism and life expectancy actually favor overaccumulation. Theoretical results are illustrated by a parametrization from US data. Our numerical exercises suggest that the US economy is dynamically inefficient, mainly because life expectancy is sufficiently short.Overlapping generations model; Productive capital; Dynamic (in)efficiency; Intergenerational altruism

Balanced cycles in an OLG model with a continuum of finitely-lived individuals

This paper studies the intertemporal equilibrium of a barter economy populated with a continuum of …finitely-lived overlapping generations. Assuming isoelastic preferences and zero endowments at the beginning and the end of the individual's life-span, it proves the existence of an Hopf bifurcation and provides sufficient conditions on parameters for its occurrence.Overlapping-generations Models, Mixed-type Functional Differential Equations, Endogenous Fluctuations, Hopf Bifurcation.