PAYG pensions and economic cycles
This article analyses the dynamics of an overlapping generations economy (Diamond, 1965) with pay-as-you-go financed public pensions and myopic expectations. It is shown that large PAYG pensions triggers economic fluctuations depending on the mutual relationship between technology and preference parameters. Our findings constitute a policy warning about the size of social security and provide another explanation of the occurrence of persistent cycles.
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- Luca Gori & Luciano Fanti, 2008. "Longevity and PAYG pension systems sustainability," Economics Bulletin, AccessEcon, vol. 10(2), pages 1-8.
- Andreas Wagener, 2003. "Equilibrium dynamics with different types of pay-as-you-go pension schemes," Economics Bulletin, AccessEcon, vol. 8(6), pages 1-12.
- Luciano Fanti & Luca Spataro, 2008. "Poverty traps and intergenerational transfers," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(6), pages 693-711, December.
- Michel, Philippe & de la Croix, David, 2000.
"Myopic and perfect foresight in the OLG model,"
Elsevier, vol. 67(1), pages 53-60, April.
- Michel, Philippe & de la Croix, David, 1999. "Myopic and perfect foresight in the OLG model," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1999014, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Michel P. & de la Croix, D., 1999. "Myopic and Perfect Foresight in the OLG Model," G.R.E.Q.A.M. 99a35, Universite Aix-Marseille III.
- Zhang, Jie & Zhang, Junsen & Lee, Ronald, 2003. "Rising longevity, education, savings, and growth," Journal of Development Economics, Elsevier, vol. 70(1), pages 83-101, February.
- Francisco Rodríguez & Daniel Ortega, 2006. "Are capital shares higher in poor countries? Evidence from Industrial Surveys," Wesleyan Economics Working Papers 2006-023, Wesleyan University, Department of Economics.
- Luciano Fanti & Luca Gori, 2009. "Longevity, fertility and PAYG pension systems sustainability," Discussion Papers 2009/77, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
- repec:ebl:ecbull:v:8:y:2003:i:6:p:1-12 is not listed on IDEAS
- repec:ebl:ecbull:v:10:y:2008:i:2:p:1-8 is not listed on IDEAS
- van Groezen, Bas & Leers, Theo & Meijdam, Lex, 2003. "Social security and endogenous fertility: pensions and child allowances as siamese twins," Journal of Public Economics, Elsevier, vol. 87(2), pages 233-251, February.
- Farmer, Roger E. A., 1986. "Deficits and cycles," Journal of Economic Theory, Elsevier, vol. 40(1), pages 77-88, October.
- Zhang, Junsen & Zhang, Jie & Lee, Ronald, 2001. "Mortality decline and long-run economic growth," Journal of Public Economics, Elsevier, vol. 80(3), pages 485-507, June.
- Reichlin, Pietro, 1986. "Equilibrium cycles in an overlapping generations economy with production," Journal of Economic Theory, Elsevier, vol. 40(1), pages 89-102, October.
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