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The desirability of pay-as-you-go pensions when relative consumption matters and returns are stochastic

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  • Bilancini, Ennio
  • D’Antoni, Massimo

Abstract

Under concerns for relative consumption a PAYG system becomes more attractive because it insures pensioners against the risk of being outperformed, but it becomes potentially less effective in hedging the risks associated with financial markets. The net effect is ambiguous.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 117 (2012)
Issue (Month): 2 ()
Pages: 418-422

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Handle: RePEc:eee:ecolet:v:117:y:2012:i:2:p:418-422

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Pay-as-you-go pensions; Fully funded pensions; Relative consumption; Risk aversion; Relativity;

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References

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Cited by:
  1. Bruno Chiarini & Paolo Piselli, 2012. "Equilibrium earning premium and pension schemes: The long-run macroeconomic effects of the union," Discussion Papers 2_2012, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.

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