Generational policy is a fundamental aspect of a nation's fiscal affairs. The policy involves redistributing resources across generations and allocating to particular generations the burden of paying the government's bills. This chapter of the second edition of The Handbook of Public Economics...

Almost two decades have passed since the development of the prototype of the Auerbach-Kotlikoff dynamic life-cycle simulation model. The model has been used to examine a host of policies, including tax reform, tax cuts, investment incentives, tax progressivity, expansion of social security,...

This paper studies the macroeconomic and efficiency effects of privatizing social security. It does so by simulating alternative privatization schemes using the Auerbach-Kotlikoff Dynamic Life-Cycle Model. The simulations indicate three things. First, privatizing social security can generate...

This paper uses the Auerbach-Kotlikoff Dynamic Life-Cycle Model (AK Model) to examine the macroeconomic and efficiency effects of privatizing social security, and a simple privatization proposal, the Personal Security System, to discuss other issues associated with privatization. According to...

This paper examines U.S. family exchange and support, its levels and trends. The paper points out the importance of demographics and geographic mobility in affecting the amount and form of family exchange. It then considers family economic exchange in the form of shared living. financial...

Notwithstanding its widespread use as a measure of fiscal policy, the government deficit is not a well-defined concept from the perspective of neoclassical macro economics. From the neoclassical perspective the deficit is an arbitrary accounting construct whose value depends on how the...

Understanding how productivity varies with age is important for a variety of reasons. A decline in productivity with age implies that aging societies must increasingly depend on the labor supply of the young and middle age. It also means that policies designed to keep the elderly in the work...

In recent years the role of intergenerational transfers in the process of wealth accumulation has been the subject of substantial empirical and theoretical analysis. The key question stimulating this research is what is the main explanation for savings? Is it primarily accumulation for...

This paper questions the widely accepted view that deficits have real effects in the life cycle model. Standard analyses of deficits within life cycle models treat the government as a dictatorial entity that can effect any intergenerational redistribution it desires. In contrast, this paper...

The precautionary motive for saving is an important issue that is receiving increasing attention. Part of the motivation for this interest stems from the post war coincidence of two trends, one a decline in the U.S. rate of saving and the other an increase in insurance of various types,...