In this paper we study the implications of population ageing in an economy with a sizeable non-traded goods sector. To this effect a highly stylized micro-founded macro model is constructed in which the age structure of the population plays a non-trivial role. The model distinguishes separate birth and death probabilities (thus allowing for net population change), allows for age-dependent labour productivity (thus mimicing life-cycle saving), and includes a rudimentary pension system (thus allowing for intergenerational redistribution). The model is used to analytically study demographic and pension shocks.

demographic shocks, fertility rate, non-traded goods, overlapping generations, pension reforms
Intertemporal Consumer Choice; Life Cycle Models and Saving (jel D91), Neoclassical (jel E13), Open Economy Macroeconomics (jel F41), Social Security and Public Pensions (jel H55)
hdl.handle.net/1765/6597
Tinbergen Institute Discussion Paper Series
Tinbergen Institute

Bettendorf, L.J.H, & Heijdra, B.J. (2004). Population Ageing and Pension Reform in a Small Open Economy with Non-Traded Goods (No. TI 05-021/2). Tinbergen Institute Discussion Paper Series. Retrieved from http://hdl.handle.net/1765/6597