Bank of Lithuania

No 2. Daniel Baksa, Mihnea Constantinescu, Zsuzsa Munkacsi. Aging, informality and public policies in a small open economy


We extend OGRE, the overlapping generation model developed by Baksa and Munkacsi (2016) by adding openness. We then employ the model to explore how the macroeconomic effects of aging, assumed to manifest itself as a decrease in the mortality rate, can be counteracted through public policies. The extended version inherits the previous modelling features of OGRE allowing us to also account for the impact openness has on the effectiveness of the considered policies.

JEL Codes: E24, E26, F41, H55, J11, J46.

The views expressed are those of the author(s) and do not necessarily represent those of the Bank of Lithuania.

Daniel Baksa, Mihnea Constantinescu, Zsuzsa Munkacsi, population aging, pay-as-you-go, fully funded, shadow economy, informal employment, public pension reforms, small open-economy, overlapping generations