IDEAS home Printed from https://ideas.repec.org/p/ags/pugtwp/331693.html
   My bibliography  Save this paper

Integrating demography into a regional CGE model

Author

Listed:
  • Ignaciuk, Adriana M.
  • Hilderink, Henk
  • Peterson, Sonja

Abstract

Changes in global labor shares are often exogenously linked to changes in global population in (recursive) dynamic general equilibrium models (CGE). In many cases, these models carry a simplification or even misspecification for e.g. demographic behavior concerning fertility and mortality, and with that of the changing age structure of the population. In addition, participation rates of the potential labor force should be taken into account to have a better representation of the actual labor force. To account for these factors we link a recursive dynamic global CGE model, based on the GTAP 6.0 database, with a model that describes the demographic changes as the result of fertility and mortality patterns. The results indicate that the population aging has a substantial effect on the economy. Especially in Europe, where the process of aging is or will become visible within the coming decades, economic growth might be slowed down. To anticipate on these developments, various policy options are explored. The policies included in the paper are rising retirement age, increasing participation rates and changing the fertility rates. Although these options do have a significant positive effect on the average income levels, they cannot fully compensate the coming waves of aging.

Suggested Citation

  • Ignaciuk, Adriana M. & Hilderink, Henk & Peterson, Sonja, 2008. "Integrating demography into a regional CGE model," Conference papers 331693, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331693
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/331693/files/3812.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    2. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    3. Bergstrand, Jeffrey H, 1989. "The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade," The Review of Economics and Statistics, MIT Press, vol. 71(1), pages 143-153, February.
    4. Baltagi, Badi H. & Egger, Peter & Pfaffermayr, Michael, 2003. "A generalized design for bilateral trade flow models," Economics Letters, Elsevier, vol. 80(3), pages 391-397, September.
    5. Bergstrand, Jeffrey H, 1985. "The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence," The Review of Economics and Statistics, MIT Press, vol. 67(3), pages 474-481, August.
    6. Przemyslaw Kowalski & Ben Shepherd, 2006. "South-South Trade In Goods," OECD Trade Policy Papers 40, OECD Publishing.
    7. Helpman, Elhanan, 1987. "Imperfect competition and international trade: Evidence from fourteen industrial countries," Journal of the Japanese and International Economies, Elsevier, vol. 1(1), pages 62-81, March.
    8. David Hummels & James Levinsohn, 1995. "Monopolistic Competition and International Trade: Reconsidering the Evidence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(3), pages 799-836.
    9. Anderson, James E, 1979. "A Theoretical Foundation for the Gravity Equation," American Economic Review, American Economic Association, vol. 69(1), pages 106-116, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Vicente Pinilla & Agustina Rayes, 2017. "Why did Argentina become a super-exporter of agricultural and food products during the Belle Époque (1880-1929)?," Working Papers 0107, European Historical Economics Society (EHES).
    2. Yilmazkuday, Hakan, 2012. "Understanding interstate trade patterns," Journal of International Economics, Elsevier, vol. 86(1), pages 158-166.
    3. Yilmazkuday, Hakan, 2009. "Distribution of Consumption, Production and Trade within the U.S," MPRA Paper 16361, University Library of Munich, Germany.
    4. Raúl Serrano & Vicente Pinilla, 2014. "New directions of trade for the agri-food industry: a disaggregated approach for different income countries, 1963–2000," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-22, December.
    5. Simone Juhasz Silva & Douglas Nelson, 2012. "Does Aid Cause Trade? Evidence from an Asymmetric Gravity Model," The World Economy, Wiley Blackwell, vol. 35(5), pages 545-577, May.
    6. Caporale, Guglielmo Maria & Sova, Anamaria & Sova, Robert, 2015. "Trade flows and trade specialisation: The case of China," China Economic Review, Elsevier, vol. 34(C), pages 261-273.
    7. Miguel Tinoco-Zermeño & Francisco Venegas-Martínez & Víctor Torres-Preciado, 2014. "Growth, bank credit, and inflation in Mexico: evidence from an ARDL-bounds testing approach," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 23(1), pages 1-22, December.
    8. Michele Fratianni, 2007. "The Gravity Equation in International Trade," Working Papers 2007-17, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    9. Yilmazkuday, Hakan, 2009. "How Important is Technology? A Counterfactual Analysis," MPRA Paper 16838, University Library of Munich, Germany.
    10. Vicente Pinilla & Agustina Rayes, 2019. "How Argentina became a super-exporter of agricultural and food products during the First Globalisation (1880–1929)," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(3), pages 443-469, September.
    11. Zhang, Daowei & Li, Yanshu, 2009. "Forest endowment, logging restrictions, and China's wood products trade," China Economic Review, Elsevier, vol. 20(1), pages 46-53, March.
    12. Muhammad Ullah & Kazuo Inaba, 2012. "Impact of RTA and PTA on Bangladesh’s Export: Application of a Gravity Model," Journal of Industry, Competition and Trade, Springer, vol. 12(4), pages 445-460, December.
    13. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    14. Shujie Yao & Pan Wang, 2012. "Has China Displaced the Outward Investments of OECD Countries?," Discussion Papers 12/10, University of Nottingham, GEP.
    15. James Harrigan, 2001. "Specialization and the Volume of Trade: Do the Data Obey the Laws?," NBER Working Papers 8675, National Bureau of Economic Research, Inc.
    16. Yao, Shujie & Wang, Pan, 2014. "Has China displaced the outward investments of OECD countries?," China Economic Review, Elsevier, vol. 28(C), pages 55-71.
    17. Peter Egger, 2005. "On the Impact of Transportation Costs on Trade in a Multilateral World," Southern Economic Journal, John Wiley & Sons, vol. 71(3), pages 592-606, January.
    18. Kareem, Fatima Olanike & Martinez-Zarzoso, Inmaculada & Brümmer, Bernhard, 2016. "Fitting the Gravity Model when Zero Trade Flows are Frequent: a Comparison of Estimation Techniques using Africa's Trade Data," GlobalFood Discussion Papers 230588, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    19. Theo S. Eicher & Christian Henn, 2011. "One Money, One Market: A Revised Benchmark," Review of International Economics, Wiley Blackwell, vol. 19(3), pages 419-435, August.
    20. Jinhwan Oh & Orgilbold Tumurbaatar, 2011. "Mongolia's International Trade: Impact of Its Geographical Location," Working Papers EMS_2011_02, Research Institute, International University of Japan.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:pugtwp:331693. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/gtpurus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.