Life-Cycles, Dynasties, Savings : Implications for Closed and Small, Open Economies /

This paper examines the macroeconomic implications of life-cycle and dynastic saving behavior for closed and small, open economies. Using an extended version of Blanchard's overlapping agents model, the analytical framework nests these two competing views, treating agents as either dynastic hou...

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Bibliographic Details
Main Author: Faruqee, Hamid
Other Authors: Laxton, Douglas
Format: Journal
Language:English
Published: Washington, D.C. : International Monetary Fund, 2000.
Series:IMF Working Papers; Working Paper ; No. 2000/126
Online Access:Full text available on IMF
Description
Summary:This paper examines the macroeconomic implications of life-cycle and dynastic saving behavior for closed and small, open economies. Using an extended version of Blanchard's overlapping agents model, the analytical framework nests these two competing views, treating agents as either dynastic households or disconnected generations. Calibrating the life-cycle variant using empirical age-earnings profiles, the analysis compares the long-run effects of fiscal policy shocks under both perspectives. The results quantify the implications of life-cycle considerations for the effects of deficit finance on real interest rates and the capital stock or net foreign assets.
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Physical Description:1 online resource (40 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Access:Electronic access restricted to authorized BRAC University faculty, staff and students