Working Paper

The baby boom and international capital flows

Abstract: This paper presents a model of economic growth based on the life-cycle hypothesis to determine the path of international capital flows as the baby boom passes through the U.S. economy. The model predicts that a baby boom causes a temporary increase in capital flow into the U.S. but the increase in capital is not sufficient to maintain the capital-labor ratio in the U.S. The baby boom increases saving in the U.S. but decreases the saving abroad due to the higher world interest rates.

Keywords: economic conditions - United States; International finance;

Bibliographic Information

Provider: Federal Reserve Bank of St. Louis

Part of Series: Working Papers

Publication Date: 1994

Number: 1994-031