Gifts, Bequests, and Growth
A familiar result in the theory of private intergenerational transfers is that competitive equilibria with gifts from children to their parents are dynamically inefficient whereas they are dynamically efficient with bequests from parents to their children. This note demonstrates that if growth is endogenous, both gift and bequest economies are dynamically efficient, but gift economies grow more rapidly.
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References listed on IDEAS
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- Gilles Saint-Paul, 1992. "Fiscal Policy in an Endogenous Growth Model," The Quarterly Journal of Economics, Oxford University Press, vol. 107(4), pages 1243-1259.
- Kimball, Miles S., 1987. "Making sense of two-sided altruism," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 301-326, September.
- Romer, Paul M, 1986.
"Increasing Returns and Long-run Growth,"
Journal of Political Economy,
University of Chicago Press, vol. 94(5), pages 1002-1037, October.
- Carmichael, Jeffrey, 1982. "On Barro's Theorem of Debt Neutrality: The Irrelevance of Net Wealth," American Economic Review, American Economic Association, vol. 72(1), pages 202-213, March.
- O'Connell, Stephen A. & Zeldes, Stephen P., 1993.
"Dynamic efficiency in the gifts economy,"
Journal of Monetary Economics,
Elsevier, vol. 31(3), pages 363-379, June.
- Andrew B. Abel, "undated".
"Operative Gift and Bequest Motives,"
Rodney L. White Center for Financial Research Working Papers
09-87, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel, "undated". "Operative Gift and Bequest Motives," Rodney L. White Center for Financial Research Working Papers 9-87, Wharton School Rodney L. White Center for Financial Research.
- Andrew B. Abel, 1987. "Operative Gift and Bequest Motives," NBER Working Papers 2331, National Bureau of Economic Research, Inc.
- Kenneth J. Arrow, 1962. "The Economic Implications of Learning by Doing," Review of Economic Studies, Oxford University Press, vol. 29(3), pages 155-173.
- King, Ian & Ferguson, Don, 1993. "Dynamic inefficiency, endogenous growth, and Ponzi games," Journal of Monetary Economics, Elsevier, vol. 32(1), pages 79-104, August.
- Grossman, G.M. & Yanagawa, N., 1992.
"Asset Bubbles and Endogenous Growth,"
160, Princeton, Woodrow Wilson School - Public and International Affairs.
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