Asset Accumulation, Fertility Choice and Nondegenerate Dynamics in a Small Open Economy

Petrucci, Alberto (2004) Asset Accumulation, Fertility Choice and Nondegenerate Dynamics in a Small Open Economy. [Working Paper]. p. 20. Fondazione Eni Enrico Mattei Working Paper Series (No. 121.2004). (Submitted)

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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.

Item Type: Report / Paper (Working Paper)
Research documents and activity classification: Working Papers > Non-Refereed Working Papers / of national relevance only
Divisions: Department of Business and Management
Uncontrolled Keywords: Endogenous population, Capital accumulation, Current account, Transitional dynamics.
MIUR Scientific Area: Area 13 - Economics and Statistics > SECS-P/01 Political Economy
Deposited by: Maria Teresa Nisticò
Date Deposited: 13 Dec 2010 14:22
Last Modified: 22 Apr 2015 00:13


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