ALTRUISM AND THE MACROECONOMIC EFFECTS OF DEMOGRAPHIC-CHANGES

In this paper we show that the macroeconomic effects of demographic ch anges strongly depend on the degree of altruism and on the specificati on of the intertemporal utility function. We allow for agents either t o be altruistic in the sense of Barro (1974) or non-altruistic. In the latter case, generations are heterogeneous like in the ''unloved chil dren'' model of Weil (1989). In the former case, where the model is a standard Ramsey model with identical agents, we distinguish a Millian and a Benthamite intertemporal utility function. For each of these mod els, we study the effects of an anticipated and unanticipated permanen t decline in population growth as well as the consequences of a baby-b oom/baby-bust scenario.