IDEAS home Printed from https://ideas.repec.org/p/cor/louvco/2005027.html

Capital accumulation and fiscal policy in an OLG model with family altruism

Author

Listed:
  • LAMBRECHT, Stéphane
  • MICHEL, Philippe
  • THIBAULT, Emmanuel

Abstract

The idea of family altruism is that parents care only about their children's income and not about the use of this income made by the children. First, we establish dynamical properties which place the OLG model with family altruism halfway between the model with pure life-cyclers (Diamond (1965)) and the one with dynastic altruism (Barro (1974)). Then, we show that this concept leads to interesting fiscal policy conclusions less clear-cut and more realistic than those obtained with the two previous standard OLG models: a pay as you go social security is neutral but not a public debt.

Suggested Citation

  • LAMBRECHT, Stéphane & MICHEL, Philippe & THIBAULT, Emmanuel, 2005. "Capital accumulation and fiscal policy in an OLG model with family altruism," LIDAM Discussion Papers CORE 2005027, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2005027
    as

    Download full text from publisher

    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2005.html
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emmanuel Thibault & Bruno Decreuse, 2001. "Labor productivity and dynamic efficiency," Economics Bulletin, AccessEcon, vol. 4(13), pages 1-6.
    2. N. Gregory Mankiw, 2005. "The Savers-Spenders Theory of Fiscal Policy: Corrigendum," American Economic Review, American Economic Association, vol. 95(5), pages 1752-1752, December.
    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. Philippe Michel & Pierre Pestieau, 1998. "Fiscal Policy in a Growth Model with Both Altruistic and Nonaltruistic Agents," Southern Economic Journal, John Wiley & Sons, vol. 64(3), pages 682-697, January.
    5. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    6. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521001151, January.
    7. Gary S. Becker & Nigel Tomes, 1994. "Human Capital and the Rise and Fall of Families," NBER Chapters, in: Human Capital: A Theoretical and Empirical Analysis with Special Reference to Education, Third Edition, pages 257-298, National Bureau of Economic Research, Inc.
    8. Jones, Larry E. & Manuelli, Rodolfo E., 1992. "Finite lifetimes and growth," Journal of Economic Theory, Elsevier, vol. 58(2), pages 171-197, December.
    9. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 15, pages 1055-1106, Elsevier.
    10. Lambrecht, S. & Michel, P. & Thibault, E., 2000. "Intertemporal Equilibrium with Myopic Altruism," G.R.E.Q.A.M. 00a24, Universite Aix-Marseille III.
    11. Abel, Andrew B & Warshawsky, Mark, 1988. "Specification of the Joy of Giving: Insights from Altruism," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 145-149, February.
    12. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    13. Andreoni, James, 1989. "Giving with Impure Altruism: Applications to Charity and Ricardian Equivalence," Journal of Political Economy, University of Chicago Press, vol. 97(6), pages 1447-1458, December.
    14. Philippe Michel & Pierre Pestieau, 1999. "Fiscal Policy when Individuals Differ with Regard to Altruism and Labor Supply," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(2), pages 187-203, April.
    15. Galor, Oded & Ryder, Harl E., 1989. "Existence, uniqueness, and stability of equilibrium in an overlapping-generations model with productive capital," Journal of Economic Theory, Elsevier, vol. 49(2), pages 360-375, December.
    16. MICHEL, Ph. & PESTIEAU, P., 1998. "Fiscal policy in a growth model with both altruistic and nonaltruistic agents," LIDAM Reprints CORE 1301, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    17. Donald A. Walker (ed.), 2000. "Equilibrium," Books, Edward Elgar Publishing, volume 0, number 1585, August.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Seghir, Abdelkrim & Salem, Sherif, 2010. "In nitely-lived agents via two-sided altruism," MPRA Paper 31379, University Library of Munich, Germany.
    2. Maebayashi, Noritaka, 2018. "Is an unfunded social security system good or bad for growth? A theoretical analysis of social security systems financed by VAT," MPRA Paper 90881, University Library of Munich, Germany.
    3. Bréchet, Thierry & Lambrecht, Stéphane, 2011. "Renewable resource and capital with a joy-of-giving resource bequest motive," Resource and Energy Economics, Elsevier, vol. 33(4), pages 981-994.
    4. Takaaki Aoki & Kazuo Nishimura, 2017. "Global convergence in an overlapping generations model with two-sided altruism," Journal of Evolutionary Economics, Springer, vol. 27(5), pages 1205-1220, November.
    5. Kirill Borissov & Andrei Kalk, 2024. "Social security, bequests, and social comparisons," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(3), June.
    6. Thierry Brechet & Stephane Lambrecht, 2009. "Family Altruism with Renewable Resource and Population Growth," Mathematical Population Studies, Taylor & Francis Journals, vol. 16(1), pages 60-78.
    7. Gary-Bobo, Robert J. & Nur, Jamil, 2015. "Housing, Capital Taxation and Bequests in a Simple OLG Model," CEPR Discussion Papers 10774, C.E.P.R. Discussion Papers.
    8. Noritaka Maebayashi, 2020. "Is an unfunded social security system good or bad for growth? A theoretical analysis of social security systems financed by VAT," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(4), pages 1069-1104, August.
    9. Kunze, Lars, 2010. "Capital taxation, long-run growth, and bequests," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1067-1082, December.
    10. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 15, pages 1055-1106, Elsevier.
    11. Borissov, Kirill, 2016. "The Rich And The Poor In A Simple Model Of Growth And Distribution," Macroeconomic Dynamics, Cambridge University Press, vol. 20(7), pages 1934-1952, October.
    12. Kunze, Lars, 2014. "Life expectancy and economic growth," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 54-65.
    13. Carlos Bethencourt & Lars Kunze, 2019. "Like Father, Like Son: Inheriting and Bequeathing," German Economic Review, Verein für Socialpolitik, vol. 20(2), pages 194-216, May.
    14. Borissov, Kirill & Bosi, Stefano & Ha-Huy, Thai & Pakhnin, Mikhail, 2025. "Heterogeneous bequests and social inequalities," Macroeconomic Dynamics, Cambridge University Press, vol. 29, pages 1-1, January.
    15. Borissov, Kirill & Kalk, Andrei, 2020. "Public debt, positional concerns, and wealth inequality," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 96-111.
    16. Kirill Borissov & Stéphane Lambrecht, 2012. "The dynamics of income inequality in a growth model with human capital and occupational choice," Working Papers hal-00993322, HAL.
    17. Kunze, Lars, 2012. "Funded social security and economic growth," Economics Letters, Elsevier, vol. 115(2), pages 180-183.
    18. Lars Kunze, 2009. "Capital Taxation, Long-run Growth, and Bequests," Ruhr Economic Papers 0113, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    19. Kirill Borissov & Stéphane Lambrecht, 2011. "Education, Wage Inequality and Growth," Working Papers hal-00955684, HAL.
    20. Dylan Fitz & Shyam Gouri Suresh, 2021. "Poverty traps across levels of aggregation," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 16(4), pages 909-953, October.
    21. Catherine Guirkinger & Gani Aldashev & Alisher Aldashev & Mate Fodor, 2022. "Economic Persistence Despite Adverse Policies: Evidence from Kyrgyzstan," The Economic Journal, Royal Economic Society, vol. 132(641), pages 258-272.
    22. Lars Kunze, 2012. "Like Father, Like Son: Inheriting and Bequeathing," Ruhr Economic Papers 0318, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    23. Schwarz, Mordechai E. & Sheshinski, Eytan, 2007. "Quasi-hyperbolic discounting and social security systems," European Economic Review, Elsevier, vol. 51(5), pages 1247-1262, July.
    24. Stéphane Lambrecht, 2005. "Altruisme familial et dette publique," Revue Française d'Économie, Programme National Persée, vol. 19(3), pages 159-188.
    25. Borissov, Kirill, 2016. "The Rich And The Poor In A Simple Model Of Growth And Distribution," Macroeconomic Dynamics, Cambridge University Press, vol. 20(7), pages 1934-1952, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Michel, Philippe & Thibault, Emmanuel & Vidal, Jean-Pierre, 2006. "Intergenerational altruism and neoclassical growth models," Handbook on the Economics of Giving, Reciprocity and Altruism, in: S. Kolm & Jean Mercier Ythier (ed.), Handbook of the Economics of Giving, Altruism and Reciprocity, edition 1, volume 1, chapter 15, pages 1055-1106, Elsevier.
    2. Helmuth Cremer & Pierre Pestieau, 2003. "Wealth transfer taxation: a survey," DELTA Working Papers 2003-20, DELTA (Ecole normale supérieure).
    3. MICHEL, Philippe, 2003. "Public debt and limited altruism: is Ricardian equivalence possible if altruism is limited ?," LIDAM Discussion Papers CORE 2003008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    4. Kunze, Lars, 2010. "Capital taxation, long-run growth, and bequests," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1067-1082, December.
    5. Kirill Borissov & Andrei Kalk, 2024. "Social security, bequests, and social comparisons," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 26(3), June.
    6. Borissov, Kirill & Bosi, Stefano & Ha-Huy, Thai & Pakhnin, Mikhail, 2025. "Heterogeneous bequests and social inequalities," Macroeconomic Dynamics, Cambridge University Press, vol. 29, pages 1-1, January.
    7. Stéphane Lambrecht, 2005. "Altruisme familial et dette publique," Revue Française d'Économie, Programme National Persée, vol. 19(3), pages 159-188.
    8. MICHEL, Philippe & PESTIEAU, Pierre, 2001. "Fiscal policy in a growth model with bequest-as-consumption," LIDAM Discussion Papers CORE 2001009, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Emmanuel Thibault, 2017. "Is GDP a Relevant Social Welfare Indicator? A Savers–Spenders Theory Approach," The Japanese Economic Review, Japanese Economic Association, vol. 68(3), pages 333-351, September.
    10. Lars Kunze, 2009. "Capital Taxation, Long-run Growth, and Bequests," Ruhr Economic Papers 0113, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    11. Richard Barnett & Joydeep Bhattacharya & Helle Bunzel, 2013. "Deviant generations, Ricardian equivalence, and growth cycles," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 52(1), pages 367-396, January.
    12. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    13. Lionel Artige, 2010. "Endogenous Growth and Parental Funding of Education in an OLG Model with a Fixed Factor," CREPP Working Papers 1003, Centre de Recherche en Economie Publique et de la Population (CREPP) (Research Center on Public and Population Economics) HEC-Management School, University of Liège.
    14. Helmuth Cremer & Pierre Pestieau, 2011. "The Tax Treatment of Intergenerational Wealth Transfers ," CESifo Economic Studies, CESifo Group, vol. 57(2), pages 365-401, June.
    15. Li, Jinlu & Lin, Shuanglin, 2008. "Existence and uniqueness of steady-state equilibrium in a two-sector overlapping generations model," Journal of Economic Theory, Elsevier, vol. 141(1), pages 255-275, July.
    16. Nguyen, Quynh-Nga, 2024. "Intergenerational time transfer, retirement and public pensions," The Journal of the Economics of Ageing, Elsevier, vol. 27(C).
    17. Philippe Michel & Pierre Pestieau, 2004. "Fiscal Policy in an Overlapping Generations Model with Bequest‐as‐Consumption," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(3), pages 397-407, August.
    18. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    19. Borissov, Kirill & Kalk, Andrei, 2020. "Public debt, positional concerns, and wealth inequality," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 96-111.
    20. Ono, Tetsuo & Uchida, Yuki, 2018. "Human capital, public debt, and economic growth: A political economy analysis," Journal of Macroeconomics, Elsevier, vol. 57(C), pages 1-14.

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    Statistics

    Access and download statistics

    Corrections

    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:cor:louvco:2005027. See general information about how to correct material in RePEc.

    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 bibliographic 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.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alain GILLIS (email available below). General contact details of provider: https://edirc.repec.org/data/coreebe.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.