The Demographic Dividend and International Capital Flows

Abstract: The demographic transition of falling fertility and mortality can provide countries with one generation that is proportionately bigger than the previous and following ones. This period, known as the demographic dividend, gives countries the opportunity for increased economic growth due to temporarily favorable dependency ratios. When the dividend period is over, countries face the prospect of an ageing population. This causes individual and society to accumulate funds for future pensions. This study aims to investigate the potential capital flows from the ageing countries were capital supply is increasing to the countries experiencing the dividend were capital demand is increasing.