Generational Accounting, Solidarity and Pension Losses
AbstractThe stock market collapse led to political tensions between generations due to the fuzzy definition of the property rights over the pension funds’ wealth. The problem is best resolved by the introduction of generational accounts. Modern consumption and portfolio theory shows that the younger generations should have the higher equity exposure due to their human capital. Stock market losses should be distributed smoothly over lifetime consumption by adjusting both current contributions and future entitlements. We present expressions for the substantial welfare losses involved in various practically relevant deviations from the optimal system. This discussion paper resulted in a publication in , 2006. (154(1), 63-83.
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Bibliographic InfoPaper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 03-094/3.
Date of creation: 17 Nov 2003
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Saving & investment; Financial institutions; Pension funds; Private pensions; Social security and public pensions;
Other versions of this item:
- Coen Teulings & Casper Vries, 2006. "Generational Accounting, Solidarity and Pension Losses," De Economist, Springer, vol. 154(1), pages 63-83, 03.
- Teulings, Coen & de Vries, Casper G., 2003. "Generational Accounting, Solidarity and Pension Losses," IZA Discussion Papers 961, Institute for the Study of Labor (IZA).
- de Vries, Casper G & Teulings, Coen N, 2004. "Generational Accounting, Solidarity and Pension Losses," CEPR Discussion Papers 4209, C.E.P.R. Discussion Papers.
- E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
- G2 - Financial Economics - - Financial Institutions and Services
- G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
- J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
- H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
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