Directions of Trade Flows and Labor Movements between High- And Low-Population Growth Countries: An Overlapping Generations General Equilibrium Analysis

This paper considers a two-country world where the population in one country grows faster than the other, and investigates the implications of the addition of non-stationary population dynamics to a simple 2- commodity, 2-factor model of international trade within an overlapping- generations framework. The two countries in the world considered are assumed to be identical in every respect except, for their population growth rates initially. The effects of differential speed of population growth on relative factor endowments and patterns of international trade are explored by comparing simulation results obtained from the overlapping-generations general equilibrium model under autarky and trade scenarios. Unequal population growth rates are shown to give rise to differentials in wage rates and rentals for capital under autarky conditions. This, in turn, causes costs of production and relative prices to differ, creating the grounds for trade in the sense of Heckscher-Ohlin (HO). Yet, the results from simulation exercises indicate that static welfare results from the standard 2x2x2 HO model can not be generalized to hold in a dynamic setting with overlapping generations of individuals.Unequal population growth rates, labor migration, international trade, overlapping-generations

Labor migration and trade patterns in the presence of age composition differences across countries: an overlapping generations analysis

Ankara : The Department of Economics, Bilkent Univ., 2000.Thesis (Master's) -- Bilkent University, 2000.Includes bibliographical references leaves 46-48.This study examines various effects of population growth differentials across countries by using a two country overlapping generations (OLG) general equilibrium model and shows that the resulting differences in age composition of populations provide not only a basis for trade but also incentives for international migration of labor. The analysis starts by considering autarky equilibria of the countries that are assumed to be identical except for population growth rates initially, and shows that the country with the lower (higher) population growth rate will have higher (lower) capital per worker, wage rate and lifetime utility at all times. The cases of free trade and international mobility of labor are then simulated for a comparative investigation. The simulations with the considered migration scheme reveal that the steady state value of migration rate equalizes the post-migration population growth rates in both coimtries. When trade is also taken into consideration, the results indicate that the country that is attractive to the migrants would prefer trade to migration, if it is a large country relative to the other. If both countries are equal in size, on the other hand, trade turns out to be Pareto-inferior to migration for the host country, with autarky being Pareto-superior to both trade and migration.Uyar, Ali EmreM.S