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dc.contributor.authorCreedy, John
dc.contributor.authorGuest, Ross
dc.date.accessioned2017-05-03T11:35:33Z
dc.date.available2017-05-03T11:35:33Z
dc.date.issued2008
dc.date.modified2011-06-13T23:00:01Z
dc.identifier.issn0264-9993
dc.identifier.doi10.1016/j.econmod.2007.07.007
dc.identifier.urihttp://hdl.handle.net/10072/22305
dc.description.abstractThis paper examines the optimal path of consumption over time in the context of population ageing. Older age groups are considered to have relatively greater 'needs', resulting for example from additional health costs. These differences give rise to the concept of the 'equivalent number of persons', as distinct from the population size. Emphasis is given to the difference between a framework involving a representative agent and one in which plans are made by a social planner. The precise conditions under which consumption growth paths are the same under the representative agent and the social planner are established. This equivalence is found to hold only in the case where the social planner's value judgements are such that individuals are considered to be the appropriate unit of analysis. An alternative assumption, in which equivalent persons are regarded as the appropriate units, is found to give rise to a different optimal consumption path. Numerical examples demonstrate the relative orders of magnitude for a range of parameter values. The differences are found to be potentially important. The choice of appropriate consumption units - individuals or equivalent persons - is far from arbitrary since it involves possibly conflicting value judgements. This choice has implications for policies designed to influence the optimal saving rate, such as superannuation policy and the fiscal balance.
dc.description.peerreviewedYes
dc.description.publicationstatusYes
dc.languageEnglish
dc.language.isoen_AU
dc.publisherElsevier
dc.publisher.placeAmsterdam
dc.publisher.urihttp://www.elsevier.com/locate/econbase
dc.relation.ispartofstudentpublicationN
dc.relation.ispartofpagefrom485
dc.relation.ispartofpageto498
dc.relation.ispartofissue3
dc.relation.ispartofjournalEconomic Modelling
dc.relation.ispartofvolume25
dc.rights.retentionY
dc.subject.fieldofresearchApplied Economics
dc.subject.fieldofresearchEconometrics
dc.subject.fieldofresearchBanking, Finance and Investment
dc.subject.fieldofresearchcode1402
dc.subject.fieldofresearchcode1403
dc.subject.fieldofresearchcode1502
dc.titlePopulation Ageing and Intertemporal Consumption: Representative Agent versus Social Planner
dc.typeJournal article
dc.type.descriptionC1 - Articles
dc.type.codeC - Journal Articles
gro.date.issued2008
gro.hasfulltextNo Full Text
gro.griffith.authorGuest, Ross


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