Population age distribution and aggregate saving

The aggregate saving rate results from the interplay of intertemporal preferences across consumption streams over the lifetime of a multitude of agents that compose a population at a given time. Individuals form consumption habits based on their history, age and life expectancy, giving rise to a life cycle consumption pattern sensitive to changes in permanent income. Hence, the aggregate impatience bias towards present vs. future consumption and the aggregate saving rate depend on the evolution of the age distribution of a population. The present paper explores sucha relationship by constructing an intertemporal equilibrium model withoverlapping generations of finitely lived individuals endowed with recur-sive preferences that are additively separable over successive consumption streams as in [1].