IDEAS home Printed from
   My bibliography  Save this article

Intergenerational altruism and the transfer paradox in an overlapping generations model


  • Hamada, Kojun
  • Yanagihara, Mitsuyoshi


This study investigates how intergenerational altruism affects the possibility of the transfer paradox occurring in a two-country, one-sector overlapping generations model. We derive the conditions under which the transfer paradox occurs in our model where a generation within each country has altruism toward the subsequent generation. Contrary to earlier results in the literature, we find that altruism does not enter the conditions under which the transfer paradox occurs in the steady state. Moreover, we show that although altruism affects the condition of the transfer paradox along the transition path, its effect on this condition vanishes as the economy converges to the steady state.

Suggested Citation

  • Hamada, Kojun & Yanagihara, Mitsuyoshi, 2016. "Intergenerational altruism and the transfer paradox in an overlapping generations model," The Quarterly Review of Economics and Finance, Elsevier, vol. 59(C), pages 161-167.
  • Handle: RePEc:eee:quaeco:v:59:y:2016:i:c:p:161-167
    DOI: 10.1016/j.qref.2015.04.001

    Download full text from publisher

    File URL:
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. George Constantinides & John Donaldson & Rajnish Mehra, 2007. "Junior is rich: bequests as consumption," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 32(1), pages 125-155, July.
    2. Damien Gaumont & Alice Mesnard, 2001. "Inheritance, land, and capital mobility linked to labour mobility," Journal of Population Economics, Springer;European Society for Population Economics, vol. 14(4), pages 669-687.
    3. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    4. O. Galor & H. M. Polemarchakis, 1987. "Intertemporal Equilibrium and the Transfer Paradox," Review of Economic Studies, Oxford University Press, vol. 54(1), pages 147-156.
    5. Jouvet, Pierre-Andre & Michel, Philippe & Vidal, Jean-Pierre, 2000. " Intergenerational Altruism and the Environment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 135-150, March.
    6. Kunze, Lars, 2014. "Life expectancy and economic growth," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 54-65.
    7. Kojun Hamada & Mitsuyoshi Yanagihara, 2014. "Donor Altruism and the Transfer Paradox in an Overlapping Generations Model," Review of International Economics, Wiley Blackwell, vol. 22(5), pages 905-922, November.
    8. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, Elsevier.
    9. Cremers, Emily & Sen, Partha, 2008. "The Transfer Paradox in the One-Sector Overlapping Generations Model," Staff General Research Papers Archive 34855, Iowa State University, Department of Economics.
    10. B. Douglas Bernheim, 1989. "Intergenerational Altruism, Dynastic Equilibria and Social Welfare," Review of Economic Studies, Oxford University Press, vol. 56(1), pages 119-128.
    11. Mitsuyoshi Yanagihara, 2006. "The strong transfer paradox in an overlapping generations framework," Economics Bulletin, AccessEcon, vol. 6(3), pages 1-8.
    12. Hori, Hajime, 1997. "Dynamic Allocation in an Altruistic Overlapping Generations Economy," Journal of Economic Theory, Elsevier, vol. 73(2), pages 292-315, April.
    13. Thibault, Emmanuel, 2004. "The power of love," Economics Letters, Elsevier, vol. 84(2), pages 183-189, August.
    14. Philippe Michel & Alain Venditti, 1997. "Optimal growth and cycles in overlapping generations models (*)," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 9(3), pages 511-528.
    15. Kuhle, Wolfgang, 2014. "The dynamics of utility in the neoclassical OLG model," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 81-86.
    16. Brakman,Steven & Marrewijk,Charles van, 2009. "The Economics of International Transfers," Cambridge Books, Cambridge University Press, number 9780521118729, March.
    17. Jagdish N. Bhagwati & Richard A. Brecher & Tatsuo Hatta, 1985. "The Generalized Theory of Transfers and Welfare: Exogenous (policy-Imposed) and Endogenous (Transfer-Induced) Distortion," The Quarterly Journal of Economics, Oxford University Press, vol. 100(3), pages 697-714.
    18. repec:ebl:ecbull:v:6:y:2006:i:3:p:1-8 is not listed on IDEAS
    19. Haaparanta, Pertti, 1989. "The intertemporal effects of international transfers," Journal of International Economics, Elsevier, vol. 26(3-4), pages 371-382, May.
    20. Ray, Debraj, 1987. "Nonpaternalistic intergenerational altruism," Journal of Economic Theory, Elsevier, vol. 41(1), pages 112-132, February.
    21. B. Douglas Bernheim & Debraj Ray, 1987. "Economic Growth with Intergenerational Altruism," Review of Economic Studies, Oxford University Press, vol. 54(2), pages 227-243.
    22. Olivier Jean Blanchard & Stanley Fischer, 1989. "Lectures on Macroeconomics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262022834, January.
    23. Viaene, Jean-Marie & Zilcha, Itzhak, 2002. "Public education under capital mobility," Journal of Economic Dynamics and Control, Elsevier, vol. 26(12), pages 2005-2036, October.
    24. Hori, Hajime & Kanaya, Sadao, 1989. "Utility functionals with nonpaternalistic intergenerational altruism," Journal of Economic Theory, Elsevier, vol. 49(2), pages 241-265, December.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. repec:kap:jeczfn:v:122:y:2017:i:3:d:10.1007_s00712-017-0537-5 is not listed on IDEAS

    More about this item


    Intergenerational altruism; Transfer paradox; Overlapping generations model;

    JEL classification:

    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F35 - International Economics - - International Finance - - - Foreign Aid


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:quaeco:v:59:y:2016:i:c:p:161-167. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.