<p>In all regions of the world, population is aging, but at different paces, and according to the United Nations (2013) demographic projections, this phenomenon should go on until after the end of the century. This generalized but unequal aging process is occurring in a world of increasing capital mobility and technological transfers, which can o§er new opportunities for trade between regions. Moreover, this aging process increases the demographic dependency putting the unfunded pension schemes under pressure in developed countries, which in turn induces countries to change their rules of sharing of resources between generations, which infers on the individual choices of savings. Conversely, in the emerging countries, the unequal sharing of growth beneits and a longer life expectancy could encourage governments to settle or improve unfunded pension schemes and smooth the di§erences in welfare across generations. How in a globalized economy these antagonistic problematics resolve?</p><p>This paper analyses how the economic, demographic and institutional differences between two regions -one developed and called the North, the other emerging and called the South- drive the international capital flows and explain the world economic equilibrium. To this end, the authors develop a simple two-period OLG model. They compare closed-economy and open-economy equilibria. Then the paper considers that openness facilitates convergence of South’s characterics towards North’s. The authors examine successively the consequences of a technological catching-up, a demographic transition and an institutional convergence of pension schemes. We determine the analytical solution of the dynamics of the world interest rate and deduce the evolution of the current accounts. These analytical results are completed by numerical simulations. They show that the technological catching-up alone leads to a welfare loss for the North in reason of capital flows towards the South. If they then add to this first change a demographic transition, the capital demand is reduced in the South whereas its saving increases in reason of a higher life expectancy. These two effects contribute to reduce the capital flows from the North to the South. Finally, an institutional convergence of the two pension schemes reduces the South’s saving rate which increases the capital flow from the North to the South</p>