Many countries around the world have large public pension programs with signif-icant cross-cohort redistribution. This paper provides a rationale for such programsin a lifecycle framework with search and matching frictions in the labor market. Inthe model, public pension programs alter the age...

Many countries around the world have large public pension programs. Traditionally, these programshave been used to induce retirement by the elderly in order to free up jobs for the young andto redistribute income across generations. This paper provides an efficiency rationale for the...

Many countries around the world are experiencing a significant shift in demographic patterns towards an older population. The age composition of the labor force has also changed dramatically, often accompanied by sharp reductions in the labor force participation rates of older workers. These...

In recent years, many countries have experienced a significant shift in demographic patterns towards the elderly. This phenomenon poses numerous challenges for the design of public pension programs and labor market policies. To better understand how public policy should be designed in response...

A popular view about social security, dating back to its early days of inception, is that it is a means for young, unemployed workers to "purchase" jobs from older, employed workers. The question we ask is: Can social security, by encouraging retirement and hence creating job vacancies for the...

There is a large body of evidence supporting the notion that a) those who grow up to be patient(forward-looking) do better in life compared to those who do not, and b) parents can inculcatethe virtue of delayed gratification in their children by taking the right sort of actions. We studya...

This paper revisits the role played by myopia in generating a theoreticalrationale for pay-as-you-go social security in dynamically efficient economies.Contrary to received wisdom, if the real interest rate is exogenously fixed, enough myopiamay justify public pensions but never alongside...

The tug-o-war for supremacy between inflation targeting and monetary tar-geting is a classic yet timely topic in monetary economics. In this paper, werevisit this question within the context of a pure-exchange overlapping genera-tions model of money where spatial separation and random relocation...

We study a variant of the conventional keeping-up-with-the-Joneses setup in whichheterogeneous-ability agents care both about consumption and leisure and receive anutility premium if their consumption exceeds that of the Joneses’. Unlike the conventionalsetup in which all agents are assumed to...

In an overlapping generations model, momentary equilibria are defined as points that lieon the intergenerational offer curve, i.e., they satisfy agents’ optimality conditions and marketclearing at any date. However, some dynamic sequences commencing from such points may notbe considered valid...