Projects per year
Abstract / Description of output
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. Interpreting intergenerational insurance in terms of public debt, the fiscal reaction function is nonlinear and the risk premium on debt is lower than the risk premium with complete insurance.
Original language | English |
---|---|
Pages (from-to) | 1-45 |
Number of pages | 45 |
Journal | Journal of Political Economy |
Volume | 132 |
Issue number | 10 |
Early online date | 5 Sept 2024 |
DOIs | |
Publication status | Published - Oct 2024 |
Keywords / Materials (for Non-textual outputs)
- intergenerational insurance
- limited commitment
- risk sharing
- stochastic overlapping generations
- sustainable debt
Fingerprint
Dive into the research topics of 'Intergenerational insurance'. Together they form a unique fingerprint.Projects
- 1 Finished
-
MacCaLM: Labour and Credit Market Foundations of the Macroeconomy
Moore, J., Belot, M., Elsby, M., Guell, M., Kircher, P., Rodriguez Mora, S., Snell, A., Thomas, J., Visschers, L., Worrall, T. & Zymek, R.
1/06/15 → 31/05/22
Project: Research
Datasets
-
Replication Data For Intergenerational Insurance
Worrall, T. (Creator), Russo, A. (Creator) & Lancia, F. (Creator), Harvard Dataverse, 20 Feb 2024
DOI: 10.7910/DVN/XDBGVY, https://doi.org/10.7910/DVN/XDBGVY
Dataset