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Insulation of Pensions from Political Risk

  • Peter Diamond

There are many sources of political risk to public provision of pensions. This paper analyzes legislation to alter the retirement income system. This approach naturally recognizes that some changes in the system are good responses to social risks, while others generate such risks. Thus the discussion is in terms of the effect of institutional structure on the likelihood of alternative legislative actions. Particular attention is paid to the roles of automatic pension adjustment and pension professionals in providing insulation. Briefly touched upon is the tendency of legislation to redistribute as a function of the type of system being created.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 4895.

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Date of creation: Oct 1994
Date of revision:
Publication status: published as in S. Valdez, editer, The Economics of Pensions: Principles, Policies, and International Experience; Cambridge University Press ; Cambridge, 1997
Handle: RePEc:nbr:nberwo:4895
Note: AG
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  1. William D. Nordhaus, 1989. "Alternative Approaches to the Political Business Cycle," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 20(2), pages 1-68.
  2. Robert C. Merton, 1982. "On Consumption-Indexed Public Pension Plans," NBER Working Papers 0910, National Bureau of Economic Research, Inc.
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  10. Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, June.
  11. Solow, Robert M, 1980. "On Theories of Unemployment," American Economic Review, American Economic Association, vol. 70(1), pages 1-11, March.
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  13. Alberto Alesina, 1988. "Macroeconomics and Politics," NBER Chapters, in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62 National Bureau of Economic Research, Inc.
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