Theory-Based Models
Theory-Based Models
Theory-Based Models
A two-period overlapping-generations framework linking saving, population growth, and capital accumulation across cohorts.
Theory-Based Models
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Scenario
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Lowers population growth and changes the capital dilution term.
Raises next period capital for the next cohort.
Steady-state cohort capital
Steady-state capital
0.26
Young wage
1.18
Old-age return
2.532
Impact summary
The OLG setup settles around capital 0.26 with wage income 1.18.
Because saving is done by the young and capital is inherited by the next cohort, demographics directly reshape the path.