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Borrowing constraints, parental altruism and welfare

Listed author(s):
  • Soares, Jorge

This paper investigates the welfare impact of a borrowing constraint that does not allow children to borrow against future income. In an overlapping-generations model with altruistic parents, the inability to borrow increases children’s savings and parental transfers, raising children’s welfare as well as average welfare in the short-run and in the long-run.

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File URL: http://www.sciencedirect.com/science/article/pii/S0164070415000348
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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 45 (2015)
Issue (Month): C ()
Pages: 1-20

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Handle: RePEc:eee:jmacro:v:45:y:2015:i:c:p:1-20
DOI: 10.1016/j.jmacro.2015.03.001
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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