Summary This paper employs a three-period-overlapping-generations model to discuss intergenerational (in-)efficiency of a PAYG system when labor supply is endogenous. Four main results will be derived. First, a pension system is (constrained) efficient if the existing system itself and reforms...

Summary In this paper a neoclassical growth model is used to analyze public debt in a growing economy with two levels of government. The main focus is on the existence and the stability of long run equilibria in a growing federal state. It is shown that the equilibrium in a federation with two...