Illiquid Life Annuities
AbstractIn this article, we consider illiquid life annuity contracts and show that they may be preferred to Yaari (1965)'s liquid contracts. In an overlapping-generation economy, liquid life annuities are demanded only if the equilibrium is dynamically inefficient. Alternatively, an equilibrium displaying a positive demand for illiquid life annuities is efficient. In this latter case, the welfare at steady-state is larger if illiquid life annuity contracts are available.
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Bibliographic InfoPaper provided by University of Paris West - Nanterre la Défense, EconomiX in its series EconomiX Working Papers with number 2013-30.
Length: 28 pages
Date of creation: 2013
Date of revision:
annuity; overlapping generation model;
Other versions of this item:
- E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-11 (All new papers)
- NEP-DEM-2013-10-11 (Demographic Economics)
- NEP-DGE-2013-10-11 (Dynamic General Equilibrium)
- NEP-MAC-2013-10-11 (Macroeconomics)
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