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Five Fallacies in the Social Security Debate

  • Persson, Mats


    (Institute for International Economic Studies, Stockholm University)

This paper discusses five examples of the conventional wisdom that has often been expressed in the social security debate, even among academic economists. These are: 1. The major problem in most social security systems is that of demography: people simply live too long. 2. Disregarding the issue of demography, a Pay-As-You-Go system is inferior to a fully funded system since the former usually has a lower rate of return. 3. Disregarding the portfolio aspect (which might favor a PAYG system), a funded system dominates a PAYG system in a world of certainty. 4. The social security system is a suitable instrument for intergenerational risk sharing. 5. The government is a safe and reliable provider of insurance.

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Paper provided by Stockholm University, Institute for International Economic Studies in its series Seminar Papers with number 686.

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Length: 24 pages
Date of creation: 01 Jun 2000
Date of revision:
Handle: RePEc:hhs:iiessp:0686
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Institute for International Economic Studies, Stockholm University, S-106 91 Stockholm, Sweden

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  1. Svensson, Lars & Faust, Jon, 1999. "The Equilibrium Degree of Transparency and Control in Monetary Policy," Seminar Papers 669, Stockholm University, Institute for International Economic Studies.
  2. Kjetil Storesletten, 2000. "Sustaining Fiscal Policy through Immigration," Journal of Political Economy, University of Chicago Press, vol. 108(2), pages 300-323, April.
  3. Svensson, L.E.O., 1999. "Monetary Policy Issues for the Eurosystem," Papers 667, Stockholm - International Economic Studies.
  4. Zenou, Yves, 1999. "Urban Unemployment and City Formation. Theory and Policy Implications," Seminar Papers 662, Stockholm University, Institute for International Economic Studies.
  5. Agell, Jonas & Persson, Mats, 1997. "Tax Arbitrage and Labor Supply," Working Paper Series 1997:26, Uppsala University, Department of Economics.
  6. Svensson, L.E.O., 1998. "Inflation Targeting as a Monetary Policy Rule," Papers 646, Stockholm - International Economic Studies.
  7. Rudebusch, G.D. & Svensson, L.E.O., 1998. "Policy Rules for Inflation Targeting," Papers 637, Stockholm - International Economic Studies.
  8. Lars E. O. Svensson, 1999. "How should monetary policy be conducted in an era of price stability?," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 195-259.
  9. Persson, Torsten & Tabellini , Guido, 1997. "Political Economics and Macroeconomic Policy," Seminar Papers 630, Stockholm University, Institute for International Economic Studies.
  10. Rose, Andrew, 1999. "One Money, One Market: Estimating the Effect of Common Currencies on Trade," Seminar Papers 678, Stockholm University, Institute for International Economic Studies.
  11. Lars E.O. Svensson, 2000. "The First Year of the Eurosystem: Inflation Targeting or Not?," NBER Working Papers 7598, National Bureau of Economic Research, Inc.
  12. Hassler, John & Lindbeck, Assar, 1997. "Intergenerational Risk Sharing, Stability and Optimality of Alternative Pension Systems," Seminar Papers 631, Stockholm University, Institute for International Economic Studies.
  13. Svensson, Lars E. O., 2000. "Open-economy inflation targeting," Journal of International Economics, Elsevier, vol. 50(1), pages 155-183, February.
  14. Persson, Torsten & Roland, Gérard & Tabellini, Guido, 1997. "Comparative Politics and Public Finance," CEPR Discussion Papers 1737, C.E.P.R. Discussion Papers.
  15. Svensson, Lars, 1999. "Does the P* Model provide Any Rationale for Monetary Targeting?," Seminar Papers 671, Stockholm University, Institute for International Economic Studies.
  16. Acemoglu, Daron & Zilibotti, Fabrizio, 1998. "Information Accumulation in Development," Seminar Papers 652, Stockholm University, Institute for International Economic Studies.
  17. Taylor, John B., 1999. "The robustness and efficiency of monetary policy rules as guidelines for interest rate setting by the European central bank," Journal of Monetary Economics, Elsevier, vol. 43(3), pages 655-679, June.
  18. Hassler, J. & Rodriguez Mora, J.V., 1998. "IQ, Social Mobility and Growth," Papers 635, Stockholm - International Economic Studies.
  19. Svensson, Lars E.O., 1997. "Inflation Targeting: Some Extensions," Seminar Papers 625, Stockholm University, Institute for International Economic Studies.
  20. Acemoglu, Daron & Zilibotti, Fabrizio, 2000. "Productivity Differences," CEPR Discussion Papers 2498, C.E.P.R. Discussion Papers.
  21. Agell, Jonas & Persson, Mats & Sacklén, Hans, 1999. "Labour Supply Prediction When Tax Avoidance Matters," Seminar Papers 679, Stockholm University, Institute for International Economic Studies.
  22. Hassler, John & Rodríguez Mora, José Vicente & Storesletten, Kjetil & Zilibotti, Fabrizio, 1999. "Equilibrium Unemployment Insurance," CEPR Discussion Papers 2126, C.E.P.R. Discussion Papers.
  23. James E. Anderson, 1997. "Revenue Neutral Trade Reform with Many Households, Quotas and Tariffs," NBER Working Papers 6181, National Bureau of Economic Research, Inc.
  24. Marimon, R. & Zilibotti, F., 1998. "Unemployment vs. Mismatch of Talents," Papers 661, Stockholm - International Economic Studies.
  25. Hassler, John & Rodríguez Mora, José V., 1997. "Employment Turnover and Unemployment Insurance," Seminar Papers 623, Stockholm University, Institute for International Economic Studies.
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