Macroeconomic Consequences of Demographic Change: Modeling Issues and Applications

Macroeconomic Consequences of Demographic Change: Modeling Issues and Applications Summary:

Springer; 1 edition (April 20, 2009) | English | 3642001459 | 135 pages | PDF | 2.45 MB

This book presents a new computational approach to solving large-scale Auerbach-Kotlikoff Overlapping Generations (OLG) models in a complementarity format. Unlike with integrated solution methods, the proposed decomposition algorithm allows for the solution of multi-regional and multi-sectoral OLG models that exhibit a large number of heterogeneous consumers and a variety of household-specific effects. By broadening the scope of economic analysis, this new approach provides a powerful tool for applied general equilibrium modelers. In this book, the algorithm is applied to the macroeconomics of demographic change, demonstrating its flexibility and scope as a solution concept. With a specific analysis on the implications of globally unsynchronized demographic patterns for international trade, the book also explores the sectoral and distributional consequences of an aging population in Germany. 

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