We construct an overlapping generations model to study the effect of capital controls on human capital investments and the incidence of redistributive taxation in a growing economy. We argue that the conventional wisdom linking higher capital controls to lower growth is reproduced only when an...

Zusammenfassung Die Entwicklung der Bevölkerung geriet in Deutschland infolge der gegenwärtigen Finanzkrise der öffentlichen Haushalte und der Systeme sozialer Sicherung in den Focus des öffentlichen Interesses. Die in den meisten hochentwickelten Ländern sich abzeichnende Alterung und...

Purpose Sub-Saharan African (SSA) region has been battling illegal outflow of capital over the years, with little success recorded so far. Without adequate attention, unemployment, infrastructure deficiencies and inefficient capital might be worse in the future. The purpose of this study is to...

Purpose This study aims to estimate the magnitude of capital flight from Pakistan. Furthermore, it analyzes the impact of capital flight on the economic growth of Pakistan in the short and long run. Design/methodology/approach This study uses the World Bank’s residual method to estimate the...

Abstract The present paper explores the fiscal policy implications of intergenerational habit formation in a Blanchard overlapping generations small open economy model. Three main conclusions emerge. (1) When individuals are finitely lived and have habits which they pass on to their descendants,...

Across countries, government expenditures tend to favor the elderly. This paper provides a political economy explanation for this phenomenon. I consider the classic problem of dividing a fixed payoff in an overlapping generations setting. Any share of the payoff can be given to any generation....

In an ongoing organization, such as a large law partnership firm, employees are motivated not only by current rewards but also by the prospect of promotion, and the opportunity to make the rules in the future. This leads to a recursive contract design problem in an overlapping generations...

Summary We compare projection methods with the standard value function grid algorithm in order to solve overlapping generations models. We apply the methods to a particular 60-period OLG model with elastic labor supply in order to study the effects of unfunded public pensions on aggregate...

Abstract Monetary policy is superneutral in an overlapping generations model. Previous authors have argued that superneutrality does not hold in such a setting. However, the standard results rely on the counter-factual premise of helicopter money and are overturned if money creation through open...

This paper considers a one-sector overlapping-generations model with production. We observe that under standard assumptions on preferences and technology, the perfect-foresight equilibrium violates positivity constraints for large sets of initial conditions. The consideration of the positivity...