Population ageing and economic growth : education policy and family policy in a model of endogenous growth / Sandra Gruescu.

Format:

Book

Author/Creator:

Gruescu, Sandra.

Series:

Contributions to economics 1431-1933

Contributions to economics, 1431-1933

Language:

English

Subjects (All):

Population aging--Economic aspects--Mathematical models.

Population aging.

Economic policy--Mathematical models.

Economic policy.

Economic development--Mathematical models.

Economic development.

Education and state.

Education--Economic aspects.

Education.

Family policy--Economic aspects.

Family policy.

Fertility, Human--Economic aspects.

Fertility, Human.

Human capital--Mathematical models.

Human capital.

Mathematical models.

Physical Description:

xii, 201 pages : illustrations ; 24 cm.

Place of Publication:

Heidelberg ; New York : Physica-Verlag, [2007]

Summary:

We review standard economic growth models concentrating on the relationship between population ageing and economic growth and develop a growth model with endogenous human capital and endogenous fertility. With this model we analyse the effects of education policy and family policy on economic growth. The main result for economic policy is that education policy boosts human capital and thus economic growth only in the short-term (i.e. during the transition phase towards the steady state). To boost economic growth in the long-term (i.e. when the economy has reached its steady state), it is necessary to employ family policy as this increases both the fertility rate and the time individuals spend accumulating human capital. The main result for economic growth theory is that steady state economic growth is not possible when population is ageing. Steady state growth is only possible if the age structure of the population is constant.

Contents:

Part I Population in models of economic growth

1.1 Motivation and main question of this research 3

1.2 Organization of the research 5

1.3 The ageing population: Trends in Germany, United Kingdom and the USA 6

2 The size and the growth rate of population and economic growth 13

2.1 General literature on ageing population, declining population size and declining population growth rate 13

2.2 Population in economic growth theory with exogenous technological progress 16

2.3 Population in economic growth theory with endogenous technological progress 19

2.3.1 Models with scale effects 20

2.3.2 Models without scale effects 25

2.3.3 Scale effects and policy intervention to increase economic growth 28

3 Effects of a declining population in a model of economic growth 31

3.1 Introduction to a model of economic growth - The Solow (1956) model without technological progress 32

3.1.1 The real growth rate 32

3.1.2 The steady state 37

3.1.3 Transitional dynamics 41

3.1.4 Golden consumption 42

3.1.5 Speed of convergence 44

3.1.6 Conclusions on population and economic growth in the Solow model 46

3.2 The Solow (1956) model with technological progress 48

3.2.1 The real growth rate 48

3.2.2 The steady state 50

3.2.3 Transitional dynamics 51

3.2.4 Golden consumption 52

3.2.5 Speed of convergence 54

3.2.6 Conclusions on population and economic growth in the Solow model with technological progress 55

3.3 A model of economic growth with human capital - Mankiw, Romer and Weil (1992) 57

3.3.1 The real growth rate 57

3.3.2 The steady state 58

3.3.3 Transitional dynamics 59

3.3.4 Golden consumption 60

3.3.5 Speed of convergence 61

3.3.6 Conclusions on population and economic growth in the Mankiw, Romer, Weil model 62

3.4 A model of economic growth with human capital and age structure - Lindh and Malmberg (1999) 62

3.4.1 The real growth rate 63

3.4.2 The steady state 63

3.4.3 Transitional dynamics 64

3.4.4 Golden consumption 65

3.4.5 Speed of convergence 65

3.4.6 Conclusions on population and economic growth in the Lindh-Malmberg model 66

4 Effects of a declining population in a model of economic growth with endogenous human capital - Lucas (1988) 67

4.1 The problem of dynamic optimization and its solution 67

4.1.1 The problem of dynamic optimization with multiple control and state variables 70

4.2 A model of economic growth with human capital - Lucas (1988) 72

4.2.1 The real growth rate 73

4.2.2 The household 74

4.2.3 The Hamiltonian approach 75

4.2.4 The steady state 79

4.2.5 Conclusions on population and economic growth in the Lucas model 81

4.3 A note on the Lucas model 82

Part II Models of economic growth with an ageing population

6 Models of "Silver Growth" 95

7 Models with exogenous population 97

7.1 Model 1: The Solow (1956) model with an ageing population 97

7.1.1 The real growth rate 98

7.1.2 The steady state 99

7.1.3 Transitional dynamics 102

7.1.4 Silver consumption 103

7.1.5 Speed of convergence 105

7.2 Model 2: The Lucas (1988) model with an ageing population 108

7.2.1 The real growth rate 108

7.2.2 The steady state 112

7.2.3 Comparison of Model 2 and Lucas (1988) 115

8 Models with quasi-endogenous population 119

8.1 Model 3: The Lucas model with the new time allocation and quasi-endogenous population growth 121

8.1.1 The real growth rate 123

8.1.2 The steady state 129

8.1.3 Comparison of Model 3 and Lucas (1988) 131

8.1.4 A quantitative solution of Model 3 132

8.2 Model 4: A model of silver growth with the new time allocation, quasi-endogenous population growth and an ageing population 134

8.2.1 The real growth rate 136

8.2.2 The steady state 142

8.2.3 Comparative statics 145

8.2.4 Comparison of Model 3 and Model 4 148

9 Models with endogenous population 151

9.1 Model 5: The Lucas model with the new time allocation and endogenous population growth 151

9.1.1 The real growth rate 154

9.1.2 The steady state 157

9.1.3 Comparative statics and transitional dynamics 160

9.2 Model 6: A model of silver growth with the new time allocation, endogenous population growth and an ageing population 163

9.2.1 The real growth rate 164

9.2.2 The steady state 168

9.2.3 Comparative statics and transitional dynamics 171

10.1 Conclusions for economic growth theory 178

10.2 Conclusions for economic policy 185

11.1 Derivations 189

11.1.1 Lucas (1988), section 4.2 189

11.1.2 Model 4, section 8.2 190

11.1.3 Model 5, section 9.1 190

11.1.4 Model 6, section 9.2 191.

Notes:

Originally presented as the author's thesis (doctoral)--Technische Universität Darmstadt.

Includes bibliographical references (pages [195]-201).

ISBN:

9783790819052

3790819050

OCLC:

76809205