In the course of the last century, birth rates in the OECD have fallen significantly. This study is concerned with the long run factor price and welfare implications of this decline in birth rates. The relevant models, i.e. the pure consumption loan economy, the neoclassical one-sector growth model, variations of the neoclassical overlapping generations model, and the economic dependency approach are utilized to answer this question. The study features exact general conditions for the existence of an interior optimum growth rate for population in the neoclassical overlapping generations model and, hence, is closing a gap in the preceding literature. Subsequent empirical testing suggests that these conditions for the validity of the Serendipity Theorem are probably satisfied.
Frankfurt am Main, Berlin, Bern, Bruxelles, New York, Oxford, Wien, 2007. XVIII, 148 pp., num. graphs
Contents: Demographic change – Overlapping generations – Serendipity Theorem – Exact general necessary and sufficient
conditions – Optimal population in a laissez-faire economy with and without social security – The economic dependency
ratio and optimal population.