A LIFE-CYCLE INTERGENERATIONAL MODEL CONSIDERING SOCIAL SECURITY

The central objective of this paper is to deliver an intergenerational Life Cycle model considering the retirement process based on pay-as-you-go system (PAYG). Our inspired by Baranzinis’ approach, where optimal consumption analysis made in a two-class type and restricted capital variation each one. main results observe equilibrium solution stock both classes conclude that PAYG does interfere with results, as well time preference leave or not inheritance. methodology approached here Pontryagins’ Maximum Principle. We also applied numerical simulation ensure robustness our approach.