Image from Google Jackets

Intergenerational Insurance

By: Contributor(s): Material type: Continuing resourceContinuing resourcePublication details: Journal of Political Economy; 2024Description: 3500-3544ISSN:
  • 0022-3808
Subject(s): Online resources: Summary: How should successive generations insure each other when the young can default on previously promised transfers to the old? This paper studies intergenerational insurance that maximizes the expected discounted utility of all generations subject to participation constraints for each generation. If complete insurance is unattainable, the optimal intergenerational insurance is history dependent even when the environment is stationary. The risk from a generational shock is spread into the future with periodic “resetting.” If we interpret intergenerational insurance in terms of debt, the fiscal reaction function is nonlinear and the risk premium on debt is lower than the risk premium with complete insurance.
Tags from this library: No tags from this library for this title. Log in to add tags.
Star ratings
    Average rating: 0.0 (0 votes)
Holdings
Item type Current library Vol info Status Barcode
Article Index Article Index Dr VKRV Rao Library Vol. 132, No. 10 Not for loan AI867

How should successive generations insure each other when the young can default on previously promised transfers to the old? This paper studies intergenerational insurance that maximizes the expected discounted utility of all generations subject to participation constraints for each generation. If complete insurance is unattainable, the optimal intergenerational insurance is history dependent even when the environment is stationary. The risk from a generational shock is spread into the future with periodic “resetting.” If we interpret intergenerational insurance in terms of debt, the fiscal reaction function is nonlinear and the risk premium on debt is lower than the risk premium with complete insurance.

There are no comments on this title.

to post a comment.
Share