Demographic transition and optimal saving in four Asian countries

Abstract

This paper reports projections of the impact of prospective demographic change on the pattern of optimal national saving for four Asian countries; Philippines, Malaysia, Hong Kong and Singapore, for the period from 2000 to 2050. The method is simulation of a Ramsey model of optimal saving for a small open economy with vintage capital. The simulations show that variations in prospective demographic change cause variations in the patterns of optimal rates of national saving, reinforcing the idea that evaluations of a country's saving performance should take account of its prospective demographic structure.