Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/118006
Authors: 
Petrucci, Alberto
Year of Publication: 
2004
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 121.2004
Abstract: 
This paper shows that the assumption of elastic fertility choices represents an unconsidered way of introducing nondegenerate dynamics within an immortal small open economy, facing perfect capital mobility and no adjustment costs associated with capital accumulation, and having a fixed discount rate. The transient dynamics are obtained since fertility, which enters the Euler equation, renders the growth of the marginal utility of wealth strictly interconnected with wealth accumulation. The comparative dynamics are studied for two exogenous shocks: an increase in thrift, which changes fertility and capital formation permanently, and an increase in government spending, which alters fertility and capital stock temporarily.
Subjects: 
Endogenous population
Capital accumulation
Current account
Transitional dynamics
JEL: 
E21
E62
H22
Document Type: 
Working Paper

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