The authors study social security legislated endogenously by altruistic, overlapping generations. Starting from a steady-state equilibrium without social security, both generations living in a period can gain from legislation that mandates transfers from young to old in that and all subsequent...

We examine equilibrium voting strategies for elections with interested politicians facing uncertainty about voter pReferences. If politicians' utilities are defined over the set of strategies that voters select (instead of being dependent only on the probability of winning an election),...

The authors study natural selection of preferences using a golden-age model with endogenous population. In equilibrium, all agents have preferences with maximum biological fitness, given resource constraints, and total population is the maximum the environment can sustain. Naturally selected...

This paper presents an investment theory for the firm and the indu stry under rational expectations that encompasses: (1) classical capital theory; (2) a solid microeconomic basis for Keynes's investment theory; and (3) traditi onal neoclassical investment theory for the firm. These three types...

This paper extends traditional comparative statics analysis by providing a theory for the adjustment between stationary states for a competitive industry that faces upward sloping supply curves for durable and nondurable inputs given rational expectations. It is shown that capital adjustment is...

In most economies, investment is subsidized while capital is taxed. This is difficult to explain in a traditional perfect-foresight, representative-agent setting in which a single government sets all current and future taxes on capital. The authors consider a sequential-game setting in which tax...