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Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism

Author

Listed:
  • Stéphane Lambrecht

    (EQUIPPE - Economie Quantitative, Intégration, Politiques Publiques et Econométrie - Université de Lille, Sciences et Technologies - Université de Lille, Sciences Humaines et Sociales - PRES Université Lille Nord de France - Université de Lille, Droit et Santé, Université de Lille, Sciences et Technologies, Center for Operations Research and Econometrics CORE - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Philippe Michel

    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Emmanuel Thibault

    (GREMAQ - Groupe de recherche en économie mathématique et quantitative - UT Capitole - Université Toulouse Capitole - Comue de Toulouse - Communauté d'universités et établissements de Toulouse - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)

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 ; American Economic Review 55, 1126–1150) and the one with dynastic altruism ( Barro 1974 ; Journal of Political Economy 82, 1095–1117). 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

  • Stéphane Lambrecht & Philippe Michel & Emmanuel Thibault, 2006. "Capital Accumulation and Fiscal Policy in an OLG Model with Family Altruism," Post-Print hal-04279283, HAL.
    • Handle: RePEc:hal:journl:hal-04279283
    DOI: 10.1111/j.1467-9779.2006.00273.x
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    Citations

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    Cited by:

    1. 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.
    2. 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.
    3. 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.
    4. 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.
    5. 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.
    6. 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.
    7. 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.
    8. Borissov, Kirill & Kalk, Andrei, 2020. "Public debt, positional concerns, and wealth inequality," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 96-111.
    9. 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.
    10. Kunze, Lars, 2012. "Funded social security and economic growth," Economics Letters, Elsevier, vol. 115(2), pages 180-183.
    11. 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.
    12. 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.
    13. Schwarz, Mordechai E. & Sheshinski, Eytan, 2007. "Quasi-hyperbolic discounting and social security systems," European Economic Review, Elsevier, vol. 51(5), pages 1247-1262, July.
    14. Seghir, Abdelkrim & Salem, Sherif, 2010. "In nitely-lived agents via two-sided altruism," MPRA Paper 31379, University Library of Munich, Germany.
    15. 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.
    16. Kunze, Lars, 2010. "Capital taxation, long-run growth, and bequests," Journal of Macroeconomics, Elsevier, vol. 32(4), pages 1067-1082, December.
    17. 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.
    18. Kunze, Lars, 2014. "Life expectancy and economic growth," Journal of Macroeconomics, Elsevier, vol. 39(PA), pages 54-65.
    19. 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.
    20. 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.
    21. Kirill Borissov & Stéphane Lambrecht, 2011. "Education, Wage Inequality and Growth," Working Papers hal-00955684, HAL.
    22. 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.
    23. 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.
    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.

    More about this item

    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

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