On the existence of stable population in life cycle models

- We study the demography of life cycle general equilibrium models.
- The existence of stable population is established.
- This result is crucial for the aggregation of individual decisions in this class of models.

A common assumption adopted in life cycle general equilibrium models is that the population is stable at steady state, that is, its relative age distribution becomes constant over time. An open question is whether the demographic assumptions commonly adopted in these models in fact imply that the population becomes stable. In this article we prove the existence of a stable population in a demographic environment where both the age-specific mortality rates and the population growth rate are constant over time, the setup commonly adopted in life cycle general equilibrium models. Hence, the stability of the population do not need to be taken as assumption in these models.