Demographic Transition and Rapid Economic Growth: The Case of Taiwan

Miguel Sanchez Romero, University of California, Berkeley

The aim of this paper is to reconcile the debate between population and economic growth by considering the case in Taiwan. To solve this puzzle I compute a general equilibrium overlapping generation model with realistic demography. The main findings of the paper are twofold. First, the contribution of demography to economic growth, along the demographic transition, is given by the difference between the growth rate of the number of employees and the population. Second, under a steady state equilibrium and assuming a stationary population, the economic growth rate relies on productivity; however, the economic level depends on the population age structure, where greater life expectancies and fertilities have a positive and negative effect, respectively.