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aggregate risk. We argue that interactions between the two risks are important for this question. One is a direct interaction in … the form of a countercyclical variance of idiosyncratic income risk. The other indirectly emerges over a household's life …-cycle because retirement savings contain the history of idiosyncratic and aggregate shocks. We show that this leads to risk …
Persistent link: https://www.econbiz.de/10010359333
aggregate risk. We argue that interactions between the two risks are important for this question. One is a direct interaction in … the form of a countercyclical variance of idiosyncratic income risk. The other indirectly emerges over a household's life …-cycle because retirement savings contain the history of idiosyncratic and aggregate shocks. We show that this leads to risk …
Persistent link: https://www.econbiz.de/10010374428
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We model the optimal reaction of a public PAYG pension system to demographic shocks. We compare the ex-ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules that mimic the pension systems observed in the real world. The...
Persistent link: https://www.econbiz.de/10003771791