Because of the dynamic inconsistency problem in optimal policies of pay-as-you-go (PAYG) systems, parametric reforms tend to be unfair in terms of generational justice and could be inefficient in terms of optimal level of consumption. As long as there are adverse shocks, the planner has to...

This paper examines the distributional characteristics of parametric reforms carried out when a planner faces an unexpected adverse shock to the pay-as-you-go system. When transfers are used to balance the system, we show that, even if the planner chooses a Ponzi scheme in the face of permanent...

Because of the several shortcomings of aggregate time-series investigations, cross-section studies outnumber the time-series analyses on the relationship between saving and Social Security. This study is the first of its kind for an emerging country that examines the subject at two major points:...

This paper is the first attempt in the literature to investigate the effects of public social security on aggregate consumption in a time-series setting for a developing country, Turkey that has one of the most generous social security systems in the OECD region. In order to quantify the social...

As it evolves around the world, Social Security financed on pay-as-you-go (PAYG) basis increasingly becomes a Ponzi scheme due to aging populations. The main objective of Social Security is to insure seniors against an uncertain life span. However, as the probability of being a net loser rises...