Pensions and Growth: A Cointegration Analysis
Applied and Computational Mathematics
Volume 5, Issue 1-1, February 2016, Pages: 21-35
Received: May 7, 2015; Accepted: Jun. 1, 2015; Published: Jul. 3, 2015
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Authors
Miguel Rodriguez Gonzalez, Institute for Risk and Insurance, Leibniz University Hanover, Hanover, Germany
Christoph Schwarzbach, Center for Risk and Insurance, Hanover, Germany
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Abstract
This article investigates the long-term relationship between economic growth and old-age provision using time series analysis, particularly the techniques of cointegration. The neoclassical growth model by Solow (1956) provides atheoretical basis for the empirical analysis. The results are based onquarterly data from 1970 to 2013 for the US-economy. In this work, the existence of a cointegrating relation between economic growth and pensions is verified by use of scientifically accepted statistical methods and proven for historical US-data. The empirical analysis confirms that improved technological capabilities constitute a very important determinant of growth in the context of neoclassical theory. The effects within the cointegrated relationship cannot be determined at this point and there is no information if the effect is reciprocal or not. For this purpose, further investigations are necessary and can build on the results presented here.
Keywords
Growth, Old-Age Provision, Pensions, Time Series, Cointegration, Solow Model, Neoclassical Economics
To cite this article
Miguel Rodriguez Gonzalez, Christoph Schwarzbach, Pensions and Growth: A Cointegration Analysis, Applied and Computational Mathematics. Special Issue: Computational Methods in Monetary and Financial Economics. Vol. 5, No. 1-1, 2016, pp. 21-35. doi: 10.11648/j.acm.s.2016050101.13
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