[Economics Seminar] A three-period small open economy OLG model of current account with probability of survival
Radeef Chundakkadan
Dear All,
The Department of Economics, IIT Bombay, welcomes you to a seminar by Karan Rai on Nov 18th, 2025 at 3.30 pm. More details are below:
Speaker: Dr. Karan Rai (Jaipuria Institute of Management, Noida)
Date and Time: Nov 18th, 2025 (Tuesday); 3:30 PM
Venue: Room no. 401, Seminar Hall, 4th floor, A91 Eco Hub Building, Department of Economics, IIT Bombay
Title: A three-period small open economy OLG model of current account with probability of survival
Abstract: We propose a three-period small open economy overlapping generations model with probability of survival to examine whether demographic transition explains the current account dynamics. The survival probability inversely affects consumption and positively impacts saving during the first two periods, which is reflected in the current account dynamics. We have used observed and projected demographic data to simulate current account for eight advanced and sixteen emerging economies. The trend of simulated current accounts aligns well for most economies, except Japan, China, Korea, and Thailand. The forecast indicates that rising old-age dependency will drive deficits post-2022. The empirical findings indicate that the higher working-age population and life expectancy (only for advanced economies) significantly improves the current account balance. This suggests that recognizing increases in life expectancy, through the rising probability of surviving, enhance saving during the working life and is therefore a source of domestic investment and an outflow of capital.
About the speaker: Dr. Karan Rai is an economist specializing in macroeconomics with a focus on demography. He earned his PhD in Economics from the Indian Institute of Technology Ropar, where his doctoral research, titled “Macroeconomic Implications of Demographic Transition,” explored how changes in population structure influence external and internal sector dynamics, such as the current account balance, financial assets, and inflation. His research highlights the importance of the working-age population, particularly the prime working-age cohort, as a driver of economic growth and savings. Dr. Rai has published research in reputable journals, including Emerging Markets Review, Emerging Markets Finance and Trade, Economic Systems, and Applied Economics Letters.
Regards,
Radeef Chundakkadan
Dear All,
The seminar will start at 2:30 pm (not at 3:30 pm). Please be there on time.
Regards