Pareto-Improving Intergenerational Transfers

29 Pages Posted: 22 Mar 2001

See all articles by Berthold U. Wigger

Berthold U. Wigger

University of Mannheim - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: April 2000

Abstract

In the presence of endogenous growth intergenerational transfer from the young to the old reduce per capita income growth and harm future generations. On the other hand, competitive equilibria are inefficient if externalities sustain long-run growth. This paper shows that if individuals retire in the last period of their life, the inefficiency of the market economy can be removed by an investment subsidy without making the current or future generations worse off only if coupled with intergenerational transfers from the young to the old.

Keywords: Intergenerational transfers, externalities, endogenous growth

JEL Classification: D61, H23, O41

Suggested Citation

Wigger, Berthold U., Pareto-Improving Intergenerational Transfers (April 2000). Available at SSRN: https://ssrn.com/abstract=263811 or http://dx.doi.org/10.2139/ssrn.263811

Berthold U. Wigger (Contact Author)

University of Mannheim - Department of Economics ( email )

D-68131 Mannheim
Germany
+49 621 181 1797 (Phone)
+49 621 181 1794 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

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