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Abstract
This thesis is primarily concerned with the potential roles of individual aging (changes in people’s productivity and innovation capacity from young to old) and population aging (increased proportion of old to young people in the population) in determining rates of innovation and technological progress. Since economic growth depends largely on innovation, this thesis will investigate whether and how economic growth is affected by individual aging or population aging.
To study individual aging, this thesis constructs a model of technology innovation and adoption and economic growth. Individuals’ innovative and adoptive abilities change with age. This model shows that individual aging slows down technological progress of countries far from the world frontier more than it does for countries closer to the world frontier. This suggests that individual aging could be an explanation for the technology differences between developed and developing countries.
To examine the impact of population aging on growth, this thesis constructs models combining population aging, discrete time overlapping-generation, endogenous economic growth and education in general equilibrium. Under both autarky and international trade environments, the impacts of population aging on three major aspects are studied, and they are educational efforts, directed technical change and skill premia. Population aging tends to increase educational efforts and the rate of technological progress. The impacts of population aging upon directed technical change depend on the relative strength of price and market size effects. Moreover, population aging decreases skill premia under autarky, but increases skill premia under trade equilibrium.
Overall, this thesis highlights the important roles of individual and population aging in understanding innovation and economic growth.