Economic Policy in a Demographically Divided World

Economic Policy in a Demographically Divided World contains the economic analysis of the consequences of demographic change and the diverging population developments in an interdependent world economy in particular. The global divergence in demographic developments gives rise to a myriadof economic and ethical problems. This topic is treated with the help of themathematical apparatus of neoclassical optimal growth models. The author tries to disentangle the basic policy issues of a demographically divided world, such as a selective immigration policy, sustainable patterns of international lending and borrowing, development aid, and dynamic optimal taxation. The most important feature of the book is that it brings together information and theories of fairly recent date to analyse a practical policy problem, viz. issues related to a world economy that is characterised by a demographic division. This stylised fact is hardly given some attention in current economic theory and the book contains with respect to this stylised fact some new results. Customers might benefit from the book by gaining intuition concerning principles of economic policy in a world characterised by demographic change.

Contenu

1. Introduction.- 1.1 Stylised facts.- 1.1.1 Ageing and demographic transition.- 1.1.2 Economic development.- 1.2 Methodology.- 1.3 Research questions and outline.- 2. Elements of a Theory.- 2.1 Maximum principle of choice.- 2.2 Social welfare and individual choice.- 2.3 The theory of optimal economic growth.- 2.3.1 The model.- 2.3.2 Comparative statics.- 2.4 Summary.- Appendix 2A: Comparative statics for the one-sector growth model.- 3. Optimal Economic Growth in a Demographically Divided World.- 3.1 The two-region model.- 3.2 Comparative statics.- 3.3 Development aid in a demographically divided world.- 3.4 Summary.- 4. International Debt in a Demographically Divided World.- 4.1 A two-country world model.- 4.2 Demographic shocks and optimal capital flows.- 4.2.1 Transitory shocks.- 4.2.2 Permanent shocks.- 4.3 Endogenous time preference.- 4.3.1 The Uzawa model of time preference.- 4.3.2 A two-country world economy.- 4.3.3 Comparative statics.- 4.4 Summary.- Appendix 4A: Comparative statics for the model with endogenous time preference formation.- 5. International Migration, Economic Policy and Human Capital Accumulation.- 5.1 Human capital accumulation in autarky.- 5.2 Comparative statics in autarky.- 5.3 International migration and economic policy.- 5.3.1 Demographics.- 5.3.2 Optimal immigration.- 5.4 A brain drain in the 'real' world.- 5.5 Summary.- Appendix 5A: Comparative statics for the model of human capital accumulation.- 6. On the Relevance of the Ricardian Theory of Public Finance to Conditions of Demographic Change.- 6.1 The immortal consumer model.- 6.1.1 The immortal representative agent econom.- 6.1.2 Fiscal policy: temporally balanced budget.- 6.1.3 Fiscal policy: intertemporally balanced budget.- 6.2 The breakdown of the immortal consumer.- 6.2.1 Are we one dynasty?.- 6.2.2 International migration.- 6.2.3 Uncertain lifetime.- 6.2.4 Population growth uncertainty.- 6.2.5 Capital market imperfections.- 6.3 Lessons in Ricardian public finance.- 6.4 Summary.- 7. Dynamic Optimal Taxation and Endogenous Public Spending.- 7.1 Should a government smooth tax rates?.- 7.2 A simple model of the representative family.- 7.3 Dynamic fiscal policy.- 7.3.1 Second-best fiscal policy problem.- 7.3.2 First-best fiscal policy problem.- 7.4 Fiscal policy in an interdependent world economy.- 7.4.1 Time consistency.- 7.4.2 Cooperation versus noncooperation.- 7.5 Summary.- 8. Economic Policy in a Demographically Divided World.- 8.1 Economic policy in a demographically divided world.- 8.2 Qualifications and possible extensions.- 8.3 Caveat Emptor.- References.- Author Index.