Center for Research on Economic and Social Theory CREST Working Paper StEP
نویسنده
چکیده
In this paper we examine government debt and tax-transfer policies that can improve the allocation of risk between generations. Markets cannot allocate risk efficiently between two generations whenever the two generations are not both alive prior to the occurrence of a stochastic event. This implies that government policies transferring risk between generations have the potential to create first-order welfare improvements. Our model provides a non-Keynesian justification for debt-finance of wars and recessions, as well as an added rationale for Social Security type tax-transfer schemes which aid unlucky generations, e.g., the Depression generation, at the expense of luckier generations.
منابع مشابه
Center for Research on Economic and Social Theory CREST Working Paper Successful Takeovers without Exclusion
متن کامل
0 1 Center for Research on Economic and Social Theory CREST Working Paper Carrot and Yardstick Regulation : Enhancing Market Performance with Output Prizes
متن کامل
Center for Research on Economic and Social Theory CREST Working Paper Uniqueness of Cournot Equilibrium : New Results from Old Methods
This paper provides a proof of a condition for uniqueness of Cournot equilibrium. Existing proofs of the same condition have shown it to imply a unique element within a limited class of Cournot equilibria, but leave open the possibility of other purestrategy equilibria outside this class. A simpler approach permits us to derive the condition and to rule out the possibility of these other equili...
متن کاملCenter for Research on Economic and Social Theory CREST Working Paper Assortative Mating with Household Public Goods
This paper analyzes marriage market equilibria when the gains from marriage result from joint consumption of household public goods. Assuming a class of utility functions which guarantee transferable utility within marriage, the paper proves that marriage markets will be characterized by positive assortative mating on income. A tendency for positive assortative mating on wages is also demonstra...
متن کامل