Demographic Change and Economic Growth (eBook)

Foreword 8
Acknowledgments 10
Contents 12
List of Figures 16
Chapter 1: Introduction 22
Problem Statement 22
Connection of Systems Dynamics, Economics and Demographics 23
Aims of the Study 26
Outline of the Study 28
Conceptual Tools 30
Causal Links 31
Stocks and Flows 32
Auxiliaries and Constants 32
Feedback Loops 33
Delays 34
Causal-Loop-Diagram and Stock-Flow-Diagram 35
Chapter 2: Demographic Determinants and Economic Impact 37
Introduction 37
Effects on Population 38
Fertility 39
Definition 39
Economic Theory of Fertility Choice (Barro/Becker 1988, 1989) 42
Easterlin Hypothesis (1961) 45
Biographic Theory of Fertility (Birg 1991) 47
Other Fertility Theories 49
Trend and Effects on Fertility 50
Mortality 51
Definition 51
Determinants of Mortality 55
Trend and Effects on Mortality 55
Migration 59
Definition 59
Macroeconomic Push-Pull and Gravity-Models 61
Micro-economic Behavioral Models 62
Sociological Considerations 66
Trend and Effects on Migration 66
Structure 67
Definition 67
Population Pyramids 70
Malthusian Growth Model 70
Trends and Effects on Population Structure 74
Summary and Conclusion 76
Economic Effects 79
Financial Sector 79
Lifecycle Hypothesis of Consumption 79
Ricardian Equivalence and Saving Patterns 82
Rate of Return and Asset Meltdown Hypothesis 83
Trends 84
Labor Market 85
General Observations 85
Labor Supply 86
Labor Demand 88
Trends 91
R& D Sector
Skills 93
Labor Productivity 95
Innovation 96
Trends 97
Other Effects 97
Final Goods Sector: Consumption Pattern 97
Social Security Sector: Health and Long-Term Care 98
Social Security Sector: Pension Systems 99
Political Sector: Fiscal Policy 100
Political Sector: Transport Infrastructure 101
Political Sector: Election and Governance 101
Real Estate Sector: Housing Demand 101
Summary and Conclusion 102
Chapter Summary 105
Chapter 3: Neoclassical Growth Theories 107
Introduction 107
Stylized Facts and the Power of Growth 107
Short Overview 110
Exogenous Growth Model (Solow, 1956) 112
Assumptions 112
Production Function 113
Labor Force 114
Closed Economy 114
Savings 115
Investments 115
Technological Progress 115
Structure 119
Stock-Flow-Diagram 119
Phase Plot 119
Long-Term Equilibrium 123
Dynamics 124
Transitional Dynamics 124
Approaching Velocity 125
Golden Rule of Accumulation 126
Dynamic Efficiency and Dynamic Inefficiency 128
Policy Experiments 128
Population 130
Population Structure 130
Fertility and Mortality 130
Migration 133
Other Factors 133
Augmentation 135
Model of ``Silver Growth´´ (Gruescu, 2006) 135
Model with Migration (Barro/Sala-i-Martin, 2004) 138
Model with Variable Population Growth (Solow, 1956) 139
Discussion and Conclusion 142
Endogenous Growth Model (Romer, 1990) 142
Precursor of the Model 144
AK-Model (Rebelo, 1991) 144
Uzawa-Lucas-Model (1988) 147
Theory of ``Creative Destruction´´ (Schumpeter) 150
Assumptions 151
Ideas as a Public Good 153
Final-Goods Sector 154
Intermediate-Goods Sector 155
Research Sector 155
Labor Force 156
Structure 157
Stock-Flow-Diagram 157
Phase Plot 158
Long-Term Equilibrium 158
Dynamics 161
Policy Experiments 162
Population 163
Population Structure 163
Fertility and Mortality 163
Migration 163
Other Factors 163
Discussion and Conclusion 164
Semi-Endogenous Growth Model (Jones, 1995) 165
Assumptions 166
Final-Goods Sector 166
Intermediate-Goods Sector 167
Research Sector 168
Labor Force 170
Structure 171
Stock-Flow-Diagram 171
Phase Plot 173
Long-Term Equilibrium 173
Dynamics 176
Policy Experiments 178
Population 178
Population Structure 178
Fertility and Mortality 180
Migration 181
Other Factors 182
Discussion and Conclusion 184
Chapter Summary 184
Chapter 4: Demographic Growth Model 186
Introduction 186
Model Specifications 188
System Structure 188
Model Boundary 188
Integration Method and Error Test 190
Model Overview 191
Part ``Population´´ 193
Basic Structure 193
Aging 195
Births 196
Deaths 197
Migration 198
Total Population Sector 198
Part ``Research & Development´´
Part ``Growth´´ 201
Intermediate Goods and Final Goods Sector 201
Demand for Goods 202
Saving and Consumption 204
Investment and Capital Stock 204
Part ``Utility´´ 205
Initialization 209
Summary and Conclusion 210
Model Testing and Evaluation 210
Model Validation Tests 210
Test Run 1 ``Stable Population´´ 214
Description 214
Initialization 214
Results 214
Test Run 2 ``Growing Population´´ 219
Description 219
Initialization 224
Results 224
Summary and Conclusion 230
Chapter Summary 230
Chapter 5: Scenario and Policy Analysis 233
Base Run 234
Description 234
Initialization 234
Results Population Sector 235
Results R& D Sector
Results Growth Sector 244
Results Utility Sector 248
Summary and Conclusion 250
Scenario 1 ``Family Orientation´´ 250
Description 250
Initialization 250
Results Population Sector 252
Results R& D Sector
Results Growth Sector 257
Results Utility Sector 261
Summary and Conclusion 261
Scenario 2 ``Education Orientation´´ 265
Description 265
Initialization 265
Results Population Sector 265
Results R& D Sector
Results Growth Sector 275
Results Utility Sector 275
Summary and Conclusion 280
Scenario 3 ``Migration Orientation´´ 280
Description 280
Initialization 282
Results Population Sector 282
Results R& D Sector
Results Growth Sector 288
Results Utility Sector 295
Summary and Conclusion 295
Chapter Summary 295
Chapter 6: Conclusion and Outlook 304
General Summary 304
Principles of Demographic Growth 307
Implications for Further Research 310
Zusammenfassung 313
Annex 319
A.1Model Initialization 319
A.1.1Test 1: Stable Population 319
A.1.2Test 2: Growing Population 319
A.1.3Base Run 319
A.2Model Equations 329
A.2.1Model Part ``Population´´ 329
A.2.2Model Part ``Population´´: Calculation 330
A.2.3Model Part ``Growth´´ 331
A.2.4Model Part ``Growth´´: Calculation 332
A.2.5Model Part ``Utility´´ 334
A.2.6Model Part ``Utility´´: Calculation 335
A.2.7Input Variables from External Spreadsheet 336
A.2.8Policy Switches 338
A.2.9Subscripts and Unit Dummies 339
References 340