Consumption, saving and capital accumulation in the demographic transition

In this paper, we develop two simulation models -an optimal growth model and an overlapping generations model- to investigate the long-run effect of ageing on per capital consumption, national saving and intergenerational welfare inequalities. Using french demographic data, it is first shown that the optimal intertemporal path asks for an increase in the saving rate up to 2050. Nevertheless, the opposite result should be observed under an unchanged fiscal context. Two alternative saving-promoting policies are thus examined : a decrease in retirement benefits and the accumulation of a public fund.