IDEAS home Printed from https://ideas.repec.org/p/ecb/ecbwps/2004386.html
   My bibliography  Save this paper

Intergenerational altruism and neoclassical growth models

Author

Listed:
  • Michel, Philippe
  • Vidal, Jean-Pierre
  • Thibault, Emmanuel

Abstract

This paper surveys intergenerational altruism in neoclassical growth models. It first examines Barro's approach to intergenerational altruism, whereby successive generations are linked by recursive altruistic preferences. Individuals have an altruistic concern only for their children, who in turn also have altruistic feelings for their own children. The conditions under which the Ricardian equivalence (debt neutrality) theorem applies are specified. The effectiveness of fiscal policy is further analysed in the context of an economy populated by heterogeneous families differing with respect to their degree of intergenerational altruism. Other forms of altruism, referred to as ad hoc altruism, are also examined, along with their implications for fiscal policy. JEL Classification: E13, D64, E62, C60

Suggested Citation

  • Michel, Philippe & Vidal, Jean-Pierre & Thibault, Emmanuel, 2004. "Intergenerational altruism and neoclassical growth models," Working Paper Series 386, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:2004386
    Note: 147733
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/pdf/scpwps/ecbwp386.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. 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.
    2. Becker, Gary S, 1974. "A Theory of Social Interactions," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1063-1093, Nov.-Dec..
    3. Hori, Hajime, 1992. "Utility functionals with nonpaternalistic intergenerational altruism: The case where altruism extends to many generations," Journal of Economic Theory, Elsevier, vol. 56(2), pages 451-467, April.
    4. N. Gregory Mankiw, 2000. "The Savers-Spenders Theory of Fiscal Policy," American Economic Review, American Economic Association, vol. 90(2), pages 120-125, May.
    5. Emmanuel Thibault, 2005. "Existence and specific characters of rentiers: a savers-spenders theory approach," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 25(2), pages 401-419, February.
    6. 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..
    7. repec:bla:econom:v:68:y:2001:i:272:p:505-18 is not listed on IDEAS
    8. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    9. Michel, Philippe & Thibault, Emmanuel, 2007. "The failure of Ricardian equivalence under dynastic altruism," Journal of Mathematical Economics, Elsevier, vol. 43(5), pages 606-614, June.
    10. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    11. Kimball, Miles S., 1987. "Making sense of two-sided altruism," Journal of Monetary Economics, Elsevier, vol. 20(2), pages 301-326, September.
    12. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    13. 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.
    14. Nourry, Carine & Venditti, Alain, 2001. "Determinacy of Equilibrium in an Overlapping Generations Model with Heterogeneous Agents," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 230-255, January.
    15. Abel, Andrew B, 1987. "Operative Gift and Bequest Motives," American Economic Review, American Economic Association, vol. 77(5), pages 1037-1047, December.
    16. Atkinson, A B & Sandmo, A, 1980. "Welfare Implications of the Taxation of Savings," Economic Journal, Royal Economic Society, vol. 90(359), pages 529-549, September.
    17. Thibault, E., 1999. "Bequests and the Intergenerational Degree of Altruism," G.R.E.Q.A.M. 99a43, Universite Aix-Marseille III.
    18. Jean-Pierre Drugeon, 2000. "On the roles of impatiencein homothetic growth paths," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(1), pages 139-161.
    19. Gevers, Louis & Michel, Philippe, 1998. "Economic Dynasties with Intermissions," Games and Economic Behavior, Elsevier, vol. 25(2), pages 251-271, November.
    20. Roland Benabou, 2000. "Unequal Societies: Income Distribution and the Social Contract," American Economic Review, American Economic Association, vol. 90(1), pages 96-129, March.
    21. Bernheim, B Douglas & Bagwell, Kyle, 1988. "Is Everything Neutral?," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 308-338, April.
    22. Philippe Weil, 1987. "Love Thy Children," Post-Print hal-03393237, HAL.
    23. B. Douglas Bernheim, 1989. "Intergenerational Altruism, Dynastic Equilibria and Social Welfare," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 56(1), pages 119-128.
    24. 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.
    25. Philippe Aghion & Patrick Bolton, 1997. "A Theory of Trickle-Down Growth and Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(2), pages 151-172.
    26. 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.
    27. Seater, John J, 1993. "Ricardian Equivalence," Journal of Economic Literature, American Economic Association, vol. 31(1), pages 142-190, March.
    28. Oded Galor & Joseph Zeira, 1993. "Income Distribution and Macroeconomics," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 60(1), pages 35-52.
    29. Ita Falk & Oded Stark, 2001. "Dynasties and Destiny: On the Roles of Altruism and Impatience in the Evolution of Consumption and Bequests," Economica, London School of Economics and Political Science, vol. 68(272), pages 505-518, November.
    30. Emmanuel Thibault, 2000. "Existence of equilibrium in an OLG model with production and altruistic preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 15(3), pages 709-715.
    31. Thibault, Emmanuel, 2004. "The power of love," Economics Letters, Elsevier, vol. 84(2), pages 183-189, August.
    32. 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.
    33. Drazen, Allan, 1978. "Government Debt, Human Capital, and Bequests in a Life-Cycle Model," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 505-516, June.
    34. Aiyagari, S. Rao, 1992. "Co-existence of a representative agent type equilibrium with a non-representative agent type equilibrium," Journal of Economic Theory, Elsevier, vol. 57(1), pages 230-236.
    35. de la Croix,David & Michel,Philippe, 2002. "A Theory of Economic Growth," Cambridge Books, Cambridge University Press, number 9780521001151.
    36. Dutta, Jayasri & Michel, Philippe, 1998. "The Distribution of Wealth with Imperfect Altruism," Journal of Economic Theory, Elsevier, vol. 82(2), pages 379-404, October.
    37. Theodore C. Bergstrom, 1999. "Systems of Benevolent Utility Functions," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 1(1), pages 71-100, January.
    38. Gary S. Becker & Robert J. Barro, 1988. "A Reformulation of the Economic Theory of Fertility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 103(1), pages 1-25.
    39. 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.
    40. Smetters, Kent, 1999. "Ricardian equivalence: long-run Leviathan," Journal of Public Economics, Elsevier, vol. 73(3), pages 395-421, September.
    41. Buiter, Willem H, 1988. "Death, Birth, Productivity Growth and Debt Neutrality," Economic Journal, Royal Economic Society, vol. 98(391), pages 279-293, June.
    42. repec:bla:scandj:v:102:y:2000:i:1:p:135-50 is not listed on IDEAS
    43. Robert A. Becker, 1980. "On the Long-Run Steady State in a Simple Dynamic Model of Equilibrium with Heterogeneous Households," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 95(2), pages 375-382.
    44. repec:adr:anecst:y:1996:i:43:p:03 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    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, 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).
    2. Pierre Pestieau & Emmanuel Thibault, 2012. "Love thy children or money," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 50(1), pages 31-57, May.
    3. Robinson, James A. & Srinivasan, T.N., 1993. "Long-term consequences of population growth: Technological change, natural resources, and the environment," Handbook of Population and Family Economics, in: M. R. Rosenzweig & Stark, O. (ed.), Handbook of Population and Family Economics, edition 1, volume 1, chapter 21, pages 1175-1298, Elsevier.
    4. Smetters, Kent, 1999. "Ricardian equivalence: long-run Leviathan," Journal of Public Economics, Elsevier, vol. 73(3), pages 395-421, September.
    5. Thibault, Emmanuel, 2004. "The power of love," Economics Letters, Elsevier, vol. 84(2), pages 183-189, August.
    6. MICHEL, Philippe & PESTIEAU, Pierre, 2002. "Fiscal policy with agents differing in altruism and in ability," LIDAM Discussion Papers CORE 2002049, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    7. 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.
    8. Vidal, Jean-Pierre, 2000. "Capital Mobility in a Dynastic Framework," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 606-625, July.
    9. Roberto Ricciuti, 2003. "Assessing Ricardian Equivalence," Journal of Economic Surveys, Wiley Blackwell, vol. 17(1), pages 55-78, February.
    10. Lambrecht, Stephane & Michel, Philippe & Vidal, Jean-Pierre, 2005. "Public pensions and growth," European Economic Review, Elsevier, vol. 49(5), pages 1261-1281, July.
    11. Michel, Philippe & Vidal, Jean-Pierre, 2003. "Self-control and savings," Working Paper Series 211, European Central Bank.
    12. Emmanuel Thibault, 2017. "Is GDP a Relevant Social Welfare Indicator? A Savers—Spenders Theory Approach," The Japanese Economic Review, Springer, vol. 68(3), pages 333-351, September.
    13. Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(3), pages 465-486, August.
    14. Vidal, J.-P., 1999. "Capital Mobility in a Dynastic Framework," G.R.E.Q.A.M. 99a21, Universite Aix-Marseille III.
    15. Kirill Borissov & Stéphane Lambrecht, 2009. "Growth and distribution in an AK-model with endogenous impatience," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 39(1), pages 93-112, April.
    16. Kunze, Lars, 2010. "Capital taxation, long-run growth, and bequests," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1067-1082, December.
    17. Bullard, James & Russell, Steven, 1999. "An empirically plausible model of low real interest rates and unbacked government debt," Journal of Monetary Economics, Elsevier, vol. 44(3), pages 477-508, December.
    18. Vincenzo Lombardo, 2008. "Income distribution and Growth: A Critical Survey," Working Papers 11_2008, D.E.S. (Department of Economic Studies), University of Naples "Parthenope", Italy.
    19. Stéphane Lambrecht, 2005. "Altruisme familial et dette publique," Post-Print hal-04279627, HAL.
    20. Nourry, Carine & Venditti, Alain, 2001. "Determinacy of Equilibrium in an Overlapping Generations Model with Heterogeneous Agents," Journal of Economic Theory, Elsevier, vol. 96(1-2), pages 230-255, January.

    More about this item

    Keywords

    altruism; fiscal policy.; neoclassical general aggregative models;
    All these keywords.

    JEL classification:

    • Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Language; Social and Economic Stratification

    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:ecb:ecbwps:2004386. 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: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.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.