Kuehnel, Johanna
Preview |
PDF, German
Download (404kB) | Terms of use |
Citation of documents: Please do not cite the URL that is displayed in your browser location input, instead use the DOI, URN or the persistent URL below, as we can guarantee their long-time accessibility.
Abstract
This paper introduces a democratic voting process into an OLG economy in order to analyze the e ffects of a rising old-age dependency ratio on the composition of government spending and endogenous economic growth. Forward-looking agents vote each period on the public policy mix between productive government expenditure and public consumption spending that benefi ts the elderly. Population aging shifts political power from the young to the old. While this does not aff ect public productive expenditure, it leads to an increase in public spending on the elderly and a slowdown in economic growth. However, the overall e ffect on long-term economic growth is positive. This is due to reduced capital dilution or increased saving.
Document type: | Working paper |
---|---|
Date Deposited: | 17 Feb 2011 17:22 |
Date: | 2011 |
Faculties / Institutes: | The Faculty of Economics and Social Studies > Alfred-Weber-Institut for Economics |
DDC-classification: | 330 Economics |
Uncontrolled Keywords: | Demographics , Endogenous Economic Growth , Government Spending , Markov Perfect Equilibrium , Probabilistic Voting |
Series: | Discussion Paper Series / University of Heidelberg, Department of Economics |