This paper re-examines the effects of population aging and pension reforms in an OLG model with labor market frictions. The most important feature brought about by labor market frictions is the connection between the interest rate and the unemployment rate. Exogenous shocks (such as aging)...

We build on the DSGE literature to propose an overlapping generation model for Luxembourg. By way of illustration, the model is then used to study the consequences of the ageing of the population and the potential effects of alternative macroeconomic policies.

This paper shows that, beyond the institutional stability of Social Security, changes in the private sector as well as the emergence of a new financial paradigm have transformed both the U.S. pension system and the political debate about its future. Although no major reform of Social Security...