Alonso-Carrera, Jaime; Caballé, Jordi; Raurich, Xavier - In: Journal of Public Economics 92 (2008) 7, pp. 1751-1764
We study how the introduction of consumption externalities affects the optimality of the dynamic equilibrium in an economy displaying dynastic altruism. When the bequest motive is inoperative consumption externalities affect the intertemporal margin between young and old consumption and thus...