Abstract
This paper explores the international spillover effects of ageing through capital markets when countries have different pension systems. We use a two-country two-period overlapping-generations model, where the two countries only differ in their pension schemes. Two forms of population ageing are considered, namely, an increase in longevity and a fall in fertility. It is shown that, in the long run, a country using a funded pension system experiences negative spillovers from the fact that the other country uses a pay-as-you-go system. The short-run spillovers, however, are opposite to the spillovers in the long run.
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Open Access This is an open access article distributed under the terms of the Creative Commons Attribution Noncommercial License ( https://creativecommons.org/licenses/by-nc/2.0 ), which permits any noncommercial use, distribution, and reproduction in any medium, provided the original author(s) and source are credited.
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Adema, Y., Meijdam, L. & Verbon, H.A.A. Beggar thy thrifty neighbour. J Popul Econ 21, 933–959 (2008). https://doi.org/10.1007/s00148-007-0149-4
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DOI: https://doi.org/10.1007/s00148-007-0149-4