Optimal time allocation in active retirement

Central European Journal of Operations Research - We set up a lifecycle model of a retired scholar who chooses optimally the time devoted to different activities including physical activity,...     

Government Debt, Budget Surplus, and Popularity of Politicians

This paper sets up a positive model of government behavior to determine the optimal fiscal policy of a politician who aims to reach a certain target level of national debt and remain popular at the same time. We model explicitly the response of the citizens to the fiscal policy set by the politician. To that end, we assume that citizens form an equilibrium acceptance rate of savings and adjust dynamically this savings rate to the currently prevailing levels of government debt and primary surplus. The difference between the equilibrium acceptance rate of savings as formed by the public and the fiscal policy actually chosen by the politician determines the politician popularity. Using the Pontryagin maximum principle, we derive the optimal level of the fiscal policy and investigate its local stability depending on the parameters of the model. We show that cyclical strategies [that is, phases of saving (primary surplus) and spending (primary deficit)], may be optimal.     

The geometry of Wonderland

We analyze Wonderland—a model of demographic, economic and environmental interactions—by combining numerical simulations with basic ideas of geometric singular perturbation theory. This theory dealing with slow-fast dynamical systems helps us to gain new insights into the behaviour of the system. We give conditions for the occurrence of rapid environmental changes in Wonderland. Since the chosen approach is inherently geometric we also focus on the visualization of our results.     

Demographic change in models of endogenous economic growth. A survey

While in exogenous growth models demographic variables are linked to economic prosperity mainly via the population size, the structure of the workforce, and the capital intensity of workers, endogenous growth models and their successors also allow for interrelationships between demographic variables and technological change. However, most of the existing literature considers only the interrelationships based on population size and its growth rate and does not explicitly account for population aging. The aim of this paper is (a) to review the role of population size and population growth in the most commonly used endogenous economic growth models, (b) discuss models that also allow for population aging, and (c) sketch out the policy implications of the most commonly used endogenous growth models and compare them to each other.