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Aging effects on consumption risk-sharing channels in European countries

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  • Jeongseok Song

    (School of Economics, Chung-Ang University, 84, Heukseok-ro, Dongjak-gu, Seoul, 06974, Republic of Korea. Street, 300115 Timisoara, Romania.)

  • Doojin Ryu

    (College of Economics, Sungkyunkwan University, 25-2, Sungkyunkwan-ro, Jongnogu, Seoul 03063, Republic of Korea.)

Abstract

This study tests the hypothesis that aging affects risk sharing via capital markets, federal governments, and credit markets. We apply the decomposition method to both simulated and European country data. For the simulation, we consider a simple overlapping-generations model and generate data that theoretically fit the model. Empirically, we apply the variance decomposition method using data from Europe. We find some evidence that aging has a significant effect on consumption risk-sharing via the credit market channel, whereas the results for other channels are mixed. With moderate reservations, our empirical results for Europe are consistent with the results derived from the simulated data.

Suggested Citation

  • Jeongseok Song & Doojin Ryu, 2018. "Aging effects on consumption risk-sharing channels in European countries," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 36(2), pages 585-617.
    • Handle: RePEc:rfe:zbefri:v:36:y:2018:i:2:p:585-617
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    2. Mirela S. Cristea & Marilen G. Pirtea & Marta C. Suciu & Gratiela G. Noja & S.S. Askar, 2022. "Workforce Participation, Ageing, and Economic Welfare: New Empirical Evidence on Complex Patterns across the European Union," Complexity, Hindawi, vol. 2022, pages 1-13, January.

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    More about this item

    Keywords

    European countries; aging; consumption risk sharing; economic integration; variance decomposition;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations

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