Lecture 1: OLG Models
نویسنده
چکیده
– Presence of retired people (ie too old to work) implies a strong motive for saving – Competitive equilibrium is not always Pareto-Optimal, due to presence of an initial old generation. ∗ in absence of time-0 trading, initial old agents must consume their endowment, therefore young people must also consume theirs. – Potential role for money or government transfers to restore efficiency – Model can be extended (altruism, stochastic lifetimes) to build useful theories of family dynamics (Barro-Becker), deficit finance(Barro, 1974)...
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