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来源类型 | Discussion paper |
规范类型 | 论文 |
来源ID | DP6960 |
DP6960 Strategic Supply Function Competition with Private Information | |
Xavier Vives | |
发表日期 | 2008-09-23 |
出版年 | 2008 |
语种 | 英语 |
摘要 | In a stochastic two-period OLG model, featuring an aggregate shock to the economy, ex-ante optimality requires intergenerational risk sharing. We compare the level of time-consistent intergenerational risk sharing chosen by a social planner and by office seeking politicians. In the political setting, the transfer of resources across generations ? a PAYG pension system ? is determined as a Markov equilibrium of a probabilistic voting game. Negative shocks represented by low realized returns on the risky asset induce politicians to compensate the old through a PAYG system. Unless the young are crucial to win the election, this political system generates more intergenerational risk sharing than the (time consistent) social optimum. In particular, these transfers are more persistent and less responsive to the realization of the shock than optimal. This is because politicians anticipate their current transfers to the elderly to be compensated through offsetting transfers by future politicians, and thus have an incentive to overspend. Perhaps surprisingly, aging increases the socially optimal transfer but makes politicians less likely to overspend, by making it more costly for future politicians to compensate the current young. |
主题 | Public Economics |
关键词 | Markov equilibria Pension systems Social optimum |
URL | https://cepr.org/publications/dp6960 |
来源智库 | Centre for Economic Policy Research (United Kingdom) |
资源类型 | 智库出版物 |
条目标识符 | http://119.78.100.153/handle/2XGU8XDN/535797 |
推荐引用方式 GB/T 7714 | Xavier Vives. DP6960 Strategic Supply Function Competition with Private Information. 2008. |
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