In the next 50 years the Italian population will fall dramatically. Consequently, the economy will experience a pronounced ageing process in the coming decades with a strong decline in the growth rate of the labour force. Since old people has different consumption pattern than young people, in this paper we attempt to evaluate the likely effects of demographic change on energy use. Old people might use more heat energy than young people, whilst we would expect young people to consume more gasoline than older people. Using a regional overlapping general equilibrium model calibrated on a social accounting matrix for Italy, we investigate how demographic change affect the consumption patterns and especially we try to identify the size of the impact on energy use and greenhouse gas (GHG). Dalton et al. (2008) and Kronenberg (2009) investigate the relationship between demographic change and GHG. The former uses a growth model that assumes a closed economy, with fixed labour supply. The latter instead uses a fixed income, fixed price model with not substitution between goods and services. Our approach is to some extent different from other applications as far as the modelling behaviour is concerned. It is an open economy model with endogenous migration and imperfect labour market.

Email: patrizio.lecca@strath.ac.uk|

Pension Reform in a Rapidly Ageing Country
Katerina Lisenkova, University of Strathclyde

Ukraine has a rapidly ageing and declining population. A dynamic forward--looking Computable General Equilibrium (CGE) model with an explicitly modelled Pay--As--You--Go pension scheme is constructed to perform simulations of different pension reform scenarios and investigate the impact of population ageing on a wide range of macroeconomic variables. It is shown that, changes in age structure will result in a significant negative impact on the economy and stability of the pension system. Analysis of the potential changes to the pension system is limited to modelling an increase of the pension age, keeping either the workers' contribution rate or replacement rate constant.

Email: katerina.lisenkova@strath.ac.uk|

Demographic Changes and North-South Trade Patterns
Patrick Georges, Marcel Mérette, & Qi Zhang, Uiversity of Ottawa

This paper develops a multi-country overlapping-generations general equilibrium model to gauge the economic impact of demographic changes in the global economy and its transmission effects on north and south regions of the world. Although severe demographic pressures contribute to significantly lower real GDP per capita across several north regions in the world, globalisation through international trade generates an intertemporal gain form trade and a long-lasting improvement in the terms of trade of older north countries, which sustains their real consumption per capita (when goods from different geographical origins are assumed to be imperfectly substitutable), while globalisation through capital flows stimulates capital accumulation and growth in younger south countries such as India and various parts of the Rest of the World. This study examines the relative economic benefits of a North-South deepening trade relationship in a context a major demographic changes from the point of view of North but also South countries.

Email: mmerette@uottawa.ca|