Capital Flows in an Aging World

Zsofia Barany (1) , Nicolas Coeurdacier (1, 2) , Stéphane Guibaud (1)

1 ECON - Département d'économie (Sciences Po)
2 CEPR - Center for Economic Policy Research

We investigate the importance of worldwide demographic evolutions in shaping capital flows across countries and over time. Our lifecycle model incorporates cross-country differences in fertility and longevity as well as differences in countries’ ability to borrow inter-temporally and across generations through social security. In this environment, global aging triggers uphill capital flows from emerging to advanced economies, while country-specific demographic evolutions reallocate capital towards countries aging more slowly. Our quantitative multi-country overlapping generations model explains a large fraction of long-term capital flows across advanced and emerging countries.

Mots clés: Aging; Household Saving; International Capital Flows

Domaines: Economies et finances

Zsofia Barany, Nicolas Coeurdacier, Stéphane Guibaud. Capital Flows in an Aging World. 2018. ⟨hal-03393116⟩