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FAMILY POLICIES AND THE OPTIMAL POPULATION GROWTH RATE: CLOSED AND SMALL OPEN ECONOMIES
Author(s) -
Fanti Luciano,
Gori Luca
Publication year - 2010
Publication title -
metroeconomica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.256
H-Index - 29
eISSN - 1467-999X
pISSN - 0026-1386
DOI - 10.1111/j.1467-999x.2009.04068.x
Subject(s) - subsidy , economics , population , overlapping generations model , replicate , welfare , small open economy , golden rule , open economy , optimal tax , government (linguistics) , population growth , fertility , endogenous growth theory , microeconomics , macroeconomics , market economy , human capital , philosophy , statistics , linguistics , demography , mathematics , sociology , exchange rate , theology
We re‐examine the issue of optimal population in the basic overlapping generations model of neoclassical growth with endogenous fertility and time cost of children in both closed and small open economies. In the former case, we show that the golden rule of population growth can be achieved by a benevolent government in a market setting whose purpose is to maximize the steady‐state individual lifetime welfare, using either a child subsidy or a child tax. In the latter case, the child subsidy (tax) can be used as an exclusive instrument to replicate the command optimum.