Browsing by Subject "Overlapping generations"

Filter results by typing the first few letters
Now showing 1 - 5 of 5
  • Thumbnail Image
    ItemOpen Access
    Demographic shock transmission from large to small countries: an overlapping generations CGE analysis
    (Elsevier Inc., 2001) Kenc, T.; Sayan, S.
    International commodity and capital flows provide channels for the transmission of the effects of demographic changes in large countries onto small open economies by altering the prices and interest rates facing them. This implies that even small countries with relatively young populations are potentially vulnerable to the effects of population aging in large industrial economies. To address this issue, which has largely been overlooked in previous literature, this paper considers the case of European Union and Turkey and shows, within an overlapping generations general equilibrium framework, that spillovers of the demographic shock in Europe would intensify the changes that Turkey would experience during its own demographic transition. © 2001 Elsevier Science Inc.
  • Thumbnail Image
    ItemOpen Access
    Dynamic implications of prospect utility in an overlapping generations model
    (2014) Usta, Ahmet
    This thesis studies an overlapping generations model in the presence of prospect theory which has scarcely been addressed in macroeconomic growth models. The set up in this thesis provides us a unique steady state with global convergence and multiple steady states with local convergence. The presence of prospect preferences in the utility form leads to the multiplicity even under convex technology. Numerical analysis supports us that cross country income divergence can also be explained by a mechanism in which preference component is altered.
  • Thumbnail Image
    ItemOpen Access
    Energy and physical capital: a case of non-classical dynamics
    (Springer, 2019) Afyonoğlu-Fazlıoğlu, B.; Perez-Barahona, A.; Sağlam, Hüseyin Çağrı
    We study the importance of considering different energy requirements for physical capital and final good production in an overlapping generations (OLG) resource economy. In contrast to the standard OLG framework, but consistently with the empirical evidence, we assume that the accumulation of physical capital requires more energy than the production of consumption goods. Focusing on exhaustible energy resources, we find that OLG equilibria can exhibit “non-classical dynamics”: the economy generates complex dynamics where, differing from the response predicted by the standard approach, resource prices may not increase monotonically. This result illustrates that the technological assumptions behind the energy inputs should be taken with caution, in particular on dynamic analyses involving exhaustible energy resources.
  • Thumbnail Image
    ItemOpen Access
    Heckscher-Ohlin revisited: implications of differential population dynamics for trade within an overlapping generations framework
    (Elsevier BV, 2005) Sayan, S.
    This paper investigates the implications of the addition of differential population dynamics to a simple 2 × 2 × 2 model of international trade within an overlapping generations framework. The two regions considered are assumed to be identical in every respect except for the way their populations evolve over time. The effects of these demographic differences are explored by comparing autarky and trade on the basis of (i) the analytical solutions obtained for the steady-state values of key variables and (ii) the paths of these variables plotted using numerical results from simulation experiments carried out under two different demographic scenarios. Unequal population dynamics are shown to affect the relative abundance of the factors of production in each region, giving 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 reveal that static HO results cannot be generalized to hold in a dynamic setting where differences in demographics cause factor proportions to evolve independently of trade over time. © 2004 Elsevier B.V. All rights reserved.
  • Thumbnail Image
    ItemOpen Access
    Labor migration and trade patterns in the presence of age composition differences across countries: an overlapping generations analysis
    (2000) Uyar, Ali Emre
    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.