We build a computable general equilibrium model with overlapping generations of agents and an endogenous growth specification a la Lucas. Two main issues are addressed: (i) to what extent does endogenous growth play a significant role in the face of policy reform and (ii) are the simulation results robust to various calibrations of the production function of human capital. In this purpose, we simulate four large policy changes and compare the predictions with endogenous growth (under various parameter sets) to those with exogenous growth. If endogenous growth is important when examining the effects of education reform, it does not really matter with pension reforms and plays a minor role in the debt repayment scenario. These results are very robust to calibration.

Policy Reforms and Growth in Computable OLG Economies

Population aging has increasingly become one of the most urgent problems in China. This paper reveals new trends in population aging in China and possible impacts on social and economic development...

New trends in population aging and challenges for China’s sustainable development

The effects of ageing population on health expenditure and economic growth in China: A Bayesian-VAR approach

The starting point for this research is the authors’ hypothesis that global innovational networks play an important role in the development of the modern global economy because they stimulate international cooperation in the innovational sphere, the translation of knowledge in the global economic system, and general scientific and technological development and production development. The purpose of this article is to verify this hypothesis, conduct a complex study on the phenomenon of global innovational networks, and determine their purpose and role in the development of the modern global economy. The methodological basis of this research is founded on the logical modeling of economic systems and methods of structural and functional, systemic, and problem analysis. In the process of the research, the authors studied examples of global innovational networks created based on modern Europe that include countries from all over the world, namely, Horizon 2020, ERA.Net RUS, and Eurocores (European Collaboration Research). The authors also conducted complex analysis of statistical information on various global innovational networks, the dynamics of the quantity of innovational projects, realized participation in global innovational networks, and the significance of the global innovational indexes of countries of Western Europe (Great Britain, Germany, France, and Italy), Central and Eastern Europe (Czech Republic, Poland, Hungary, and Latvia) and Russia in 2005-2014. The authors provide a sense of global innovational networks, including their peculiarities and advantages; build a structural and logical model of the global market of innovations; and determine the role of global innovational networks in the development of the modern global economy.

Global Innovational Networks : Sense and Role in Development of Global Economy

Population aging, renewable energy budgets and environmental sustainability: Does health expenditures matter?

Population aging, economic growth, and the social transmission of human capital: An analysis with an overlapping generations model ☆

As the dependency ratio is rapidly increasing, the sustainability of the Korean National Pension System is questioned. In this paper we developed an overlapping generations model, Ai la Auerbach and Kotlikoff (A-K, 1987) to analyse the effects of the ageing on the macro-economy and the Korean National Pension System. We improved the original A-K model, utilizing the subsequent developments in the modeling, such as Fullerton and Rogers(1993), Altig et al(2001) and some more. We applied the model to the six alternative policy scenarios, four parametric reforms gradually increasing premium rate to 12% and/or subsidizing its deficit by tax revenues. The other two structural reforms are to change the Basic Pension Amount (BPA) formula either with only A value (average income of all insured) or with only B value (life-time average income of the particular insured person) which results in two extreme changes in the degree of tax-benefit linkage of pension system. A policy recommendation through the simulation is to gradually increase the premium rate to 12% and subsidizing by tax revenue after exhaustion of the pension reserve fund, which enhances the welfare of future generations with minimum backlash from people outside of Nation Pension System. The simulation result for the two structural reforms makes it clear that reform proposals that alter the degree of tax-benefit linkage have very sensitive impacts by income class.

The Intra and Inter-generational Welfare Impact of the Financing Policies of the National Pension System (in Korean)

An Optimal Control of Lifetime and the Tax-Benefit Linkage of National Pension Insured Persons: A Technical Note

In the standard lifecycle model, consumption grows at a constant rate during the lifetime of an individual or household. The empirical study, however, shows that income and consumption moves together and have hump-shaped paths during the life of an individual or household. In explaining this comovement and humpshapedness, two approaches are prominent. One is to introduce the uncertain income. The other is to introduce the hump-shaped labor productivity. This paper follows the latter approach. We show that, in this approach, the sizes of two elasticities of substitution (the intertemporal elasticity of substititution and the elasticity of substitution between consumption and leisure) are important. We show that the smaller is the intertemporal elasticity of substitution and the larger the elasticity of substitution between consumption and leisure, the more hump-shaped and co-moving are the income and the consumption.

Ki-Hong Choi

Papers

Population aging, economic growth, and the social transmission of human capital: An analysis with an overlapping generations model ☆

The Intra and Inter-generational Welfare Impact of the Financing Policies of the National Pension System (in Korean)

An Optimal Control of Lifetime and the Tax-Benefit Linkage of National Pension Insured Persons: A Technical Note

Elasticity of Substitution and the Lifecycle Model: A Simple Example

The Projection of Long-term Economic Growth of Korea Using an Overlapping Generations Model with Human Capital Formation