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    The Effects of Annuities, Bequests, and Aging in an Overlapping Generatiions Model of Endogenous Growth


    Pecchenino, Rowena A. (1997) The Effects of Annuities, Bequests, and Aging in an Overlapping Generatiions Model of Endogenous Growth. Economic Journal, 107. pp. 26-47. ISSN 0013-0133

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    Abstract

    We examine the effects of introducing actuarially fair annuity markets into an overlapping generations model of endogenous growth. The complete annuitisation of agents' wealth is not, in general, dynamically optimal; the degree of annuitisation that is dynamically optimal depends nonmonotonically on the expected length of retirement and on the pay-as-you-go social security tax rate. The government has an incentive to restrict the availability of actuarially fair annuities contracts, and can often move the economy from a pay-as-you-go to a fully-funded social security system via voluntary contributions to a government sponsored, actuarially fair pension today accompanied by reductions in social security taxes tomorrow.

    Item Type: Article
    Keywords: Annuities; Bequests; Overlapping Generations; Endogenous Growth;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 8516
    Depositing User: Prof. Rowena Pecchenino
    Date Deposited: 26 Jul 2017 09:52
    Journal or Publication Title: Economic Journal
    Publisher: Wiley
    Refereed: Yes
    URI:

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