Altruism and the macroeconomic effects of demographic changes

In this paper we show that the macroeconomic effects of demographic changes strongly depend on the degree of altruism and on the specification of the intertemporal utility function. We allow for agents either to be altruistic in the sense of Barro (1974) or non-altruistic. In the latter case, generations are heterogeneous like in the "unloved children" model of Weil (1989). In the former case, where the model is a standard Ramsey model with identical agents, we distinguish a Millian and a Benthamite intertemporal utility function. For each of these models, we study the effects of an anticipated and unanticipated permanent decline in population growth as well as the consequences of a baby-boom/baby-bust scenario.