Demographic Change and Economic Growth Simulations on Growth Models

In this book the author investigates the impact of demographic change on economic growth. As a result of the current financial crisis, a new view on economics has been demanded by various scientists. The author provides such a new view on economic growth,

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Lars Weber

Demographic Change and Economic Growth Simulations on Growth Models

Dr. Lars Weber FOM Hochschule fu¨r Oekonomie & Management gGmbH Hochschulstudienzentrum Leipzig Ka¨the-Kollwitz-Straße 60 04109 Leipzig Germany [email protected]

Dissertation, Brandenburgische Technische Universita¨t Cottbus, 2009, submitted under the title “Aging and Shrinking Societies and the Consequences for Economic Growth – Simulations on a Semi-Endogenous Growth Model with System Dynamics” ISSN 1431-1933 ISBN 978-3-7908-2589-3 e-ISBN 978-3-7908-2590-9 DOI 10.1007/978-3-7908-2590-9 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2010925229 # Springer-Verlag Berlin Heidelberg 2010 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Cover design: WMXDesign GmbH, Heidelberg Printed on acid-free paper Physica‐Verlag is a brand of Springer‐Verlag Berlin Heidelberg Springer‐Verlag is a part of Springer Science+Business Media (www.springer.com)

To Doreen, who made it happen and to Nele Aurelia, the joy of my life.

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Foreword

The general conditions for long-term economic development in Germany have recognizably changed. The population is aging and shrinking. This means that essential areas of economic systems, such as productivity and growth, and especially for German social security systems, need to become accustom to the basic changes in the structured data. The country could be moving into troubled times. If the productivity increase falls short, then increasing limits will be placed on the latitude of real wages. And the financial basis for social security systems will begin to waver, especially for the pay-as-you-go system. Lars Weber’s work directly examines this field of tension. The author shows a conclusive and rich analysis, which measures the obtained results in respect to the attenuation of negative demographic change effects. The work presented by Lars Weber is marked by three features. First, the work is of eminent importance for practical economic policies. Hereafter, all short-term stabilization efforts for economic policies should ask a central question, which measures the potential long-term growth damages and can be moderated as a