How Powerful is Demography? The Serendipity Theorem Revisited
Pre-print, Working paper: Introduced by Samuelson (1975), the Serendipity Theorem states that the competitive economy will converge towards the optimum steady-state provided the optimum population growth rate is imposed. This paper aims at exploring whether the Serendipity Theorem still holds in an economy with risky lifetime. We show that, under general conditions, including a perfect annuity market with actuarially fair return, imposing the optimum fertility rate and the optimum survival rate leads the competitive economy to the optimum steady-state. That Extended Serendipity Theorem is also shown to hold in economies where old adults work some fraction of the old-age, whatever the retirement age is fixed or chosen by the agents.
Author(s)
David de La Croix, Pierre Pestieau, Grégory Ponthière
Date of publication
- 2009
Keywords JEL
Keywords
- Serendipity Theorem
- Fertility
- Mortality
- Overlapping generations
- Retirement
Internal reference
- PSE Working Papers n°2009-53
URL of the HAL notice
Version
- 1