This paper examines the risk aspects of a fully phased-in investment-based defined contribution Social Security plan … system. A higher saving rate provides a cushion' that reduces the risk of unacceptably low benefits. For example, saving 6 … annuity exceeds 92 percent of the benchmark benefit. We also study a modified plan in which retirees face no risk of …

benefits of risk reduction, leaving systems with more frequent adjustments that spread risks broadly among generations as those …

implications for the allocation of risk between generations. There is no reason to presume that the market or the family can … allocate risk efficiently to future generations, implying that stochastic government policies have the potential to create …

(in 2005 dollars). Adjusting for risk, the true intergenerational transfer is substantially larger. Insuring both …

optimally shares risks across generations exposes future generations to a share of the risk in physical capital returns. Such a … system reduces precautionary saving and increases the risk-bearing capacity of the economy. Under plausible conditions it … increases the riskless interest rate, lowers the price of physical capital, and reduces the risk premium on physical capital …

This paper examines the optimal allocation of risk in an overlapping-generations economy. It compares the allocation of … risk the economy reaches naturally to the allocation that would be reached if generations behind a Rawlsian 'veil of … ignorance' could share risk with one another through complete Arrow-Debreu contingent-claims markets. The paper then examines …

government's role in promoting risk sharing. Benefits for each retired person may be tied to that person's lifetime income …