Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/128047
Authors: 
Harms, Philipp
an de Meulen, Philipp
Year of Publication: 
2009
Series/Report no.: 
Working Paper, Study Center Gerzensee 09.02
Abstract: 
It is often argued that capital should flow from aging industrialized economies to countries with fast-growing populations. However, institutional failures and the risk of expropriation substantially reduce developing economies' attractiveness for foreign investors. We analyze the influence of a country's demographic structure on international investment, using a political-economy model in which population growth potentially affects the risk of expropriation. We first explore how redistributive expropriation affects the welfare of different age groups and derive the government's incentive to expropriate. We then analyze how the relative size of different generations influences the feasible volume of foreign investment.
Subjects: 
International Investment
Political Economy
Demographics
JEL: 
F21
D78
J10
Document Type: 
Working Paper

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