Citation

Discussion Paper Details

Please find the details for DP4966 in an easy to copy and paste format below:

Full Details

Title: On Sustainable Pay-As-You-Go Systems

Author(s): Gabrielle Demange

Publication Date: March 2005

Keyword(s): intra-generational redistribution, overlapping generations, pay-as-you-go, political economy, risk and social security system

Programme Area(s): Financial Economics

Abstract: An unfunded Social Security system faces a major risk, sometimes referred to as ?political risk?. In order to account properly for this risk, the paper considers a political process in which the support to the system is asked from each newborn generation. The analysis is conducted in an overlapping generations economy that is subject to macroeconomic shocks. As a consequence, the political support varies with the evolution of the economy. The impact of various factors ?intra-generational redistribution, risk aversion, financial markets, governmental debt- on the political sustainability of a pay-as-you-go system is discussed.

For full details and related downloads, please visit: https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4966

Bibliographic Reference

Demange, G. 2005. 'On Sustainable Pay-As-You-Go Systems'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=4966