Fertility and the Real Exchange Rate.pptVIP

Fertility and the Real Exchange Rate;Simple Intuition: What effect should fertility have on real exchange rate?;Actual Finding: fertility has positive, significant effect on real exchange rate;Why Should We Care? Motivation 1;The Negative Results Continue;… through the present …;Motivation 2;Fertility Decline Large over Time;Large Variation across Countries;LDC Examples;OECD Examples;Quick Survey of the Literature;Simple Theoretical Framework;Income and Consumption;Workers’ Optimization Problem;Parameterized Utility Function;Notes;Problem for Retired;Production;Equilibrium;Change in Fertility Rate;Effect of Retired Dependency Ratio;Main Theoretical Implications;What Do We Search For?;Default Estimating Equation;Nests Existing Standard Models of Real Exchange Rate Determination;More REER Determinants;Data Set;Country List;Real Effective Exchange Rates against Fertility;Log REER against Fundamentals;Descriptive Statistics;Simple Bivariate Correlations?; Benchmark Results;Sensitivity Analysis;No evidence of non-linearity relationship between fertility and the real exchange rate;Simultaneity/Measurement Error;“Deeper” IV Rationalizations;Instrumental Variable Results;WLS Results;Sensitivity Analysis: Key Regressor;Adding Different Age Cohorts to the RER Equation;Fertility, and Savings, Investment and Current Account This all bivariate No model/control variables at all for Savings, Investment, or current account; just FE Essentially a “sniff test”;Summary: 1;Summary: 2;Conclusion