On Myopia as Rationale for Social Security

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On Myopia as Rationale for Social Security

Author Info

Torben Andersen ()
Joydeep Bhattacharya ()

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Joydeep Bhattacharya

Abstract

This paper revisits the role played by myopia in generating a theoretical rationale for pay-as-you-go social security in dynamically efficient economies. Contrary to received wisdom, if the real interest rate is exogenously fixed, enough myopia may justify public pensions but never alongside positive private savings. With sufficient myopia, co-existence of positive optimal pensions and positive private saving is possible if the real interest rate on saving evolves endogenously, as in a model with a neoclassical technology.

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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2401.

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Date of creation: 2008
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Handle: RePEc:ces:ceswps:_2401

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Paper
- Andersen, Torben M & Bhattacharya, Joydeep, 2008. "On Myopia as Rationale for Social Security," Staff General Research Papers 12985, Iowa State University, Department of Economics. [Downloadable!]

Find related papers by JEL classification:
E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

Cremer, Helmuth & De Donder, Philippe & Maldonado, Darío & Pestieau, Pierre, 2008. "Forced Saving, Redistribution and Nonlinear Social Security Schemes," CEPR Discussion Papers 6775, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Other versions:
- CREMER, Helmuth & DE DONDER, Philippe & MALDONADO, Dario & PESTIEAU, Pierre, 2008. "Forced saving, redistribution and nonlinear social security schemes," CORE Discussion Papers 2008020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
- Helmuth Cremer & Philippe de Donder & Darío Maldonado & Pierre Pestieau, 2008. "Forced Saving, Redistribution and Nonlinear Social Security Schemes," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
- Cremer, Helmuth & De Donder, Philippe & Maldonado, Dario & Pestieau, Pierre, 2009. "Forced Saving, Redistribution and Non Linear Social Security Scheme," Open Access publications from University of Toulouse 1 Capitole http://neeo.univ-tlse1.fr, University of Toulouse 1 Capitole. [Downloadable!]
- Helmuth Cremer & Philippe De Donder & Dario Maldonado & Pierre Pestieau, 2009. "Forced Saving, Redistribution, and Nonlinear Social Security Schemes," Southern Economic Journal, Southern Economic Association, vol. 76(1), pages 86-98, July.
Paul A. Samuelson, 1958. "An Exact Consumption-Loan Model of Interest with or without the Social Contrivance of Money," Journal of Political Economy, University of Chicago Press, vol. 66, pages 467. [Downloadable!] (restricted)
Jappelli, Tullio & Pagano, Marco, 1989. "Consumption and Capital Market Imperfections: An International Comparison," American Economic Review, American Economic Association, vol. 79(5), pages 1088-1105, December. [Downloadable!] (restricted)
Other versions:
- Jappelli, Tullio & Pagano, Marco, 1988. "Consumption and Capital Market Imperfection: An International Comparison," CEPR Discussion Papers 244, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
Louis Kaplow, 2006. "Myopia and the Effects of Social Security and Capital Taxation on Labor Supply," NBER Working Papers 12452, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
Faruk Gul & Wolfgang Pesendorfer, 2007. "Welfare without Happiness," American Economic Review, American Economic Association, vol. 97(2), pages 471-476, May. [Downloadable!]

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