The paper addresses two related issues: the optimal intergenerational sharing of laborproductivity risks, through a Pay-As-You-Go (PAYG) social security, and the mix ofPAYG and savings for retirement provision in a small open economy. It shows that partial contingency of the social security on...

A pay-as-you-go (paygo) pension program may provide intergenerational pooling of risks to individuals' labor and capital income over the life cycle. By means of a model that provides illuminating closed form solutions, we demonstrate that the magnitude of the optimal paygo program and the nature...

The theoretical literature presumes generational risk is large enough to merit study and that such risk can be meaningfully shared via appropriate government policy. This paper questions these propositions. It develops an 80-period OLG model to directly measure generational risk and the extent...

The theoretical literature presumes generational risk is large enough to merit study and that such risk can be meaningfully shared via appropriate government policies. This paper assesses these propositions. It develops a computational technique to overcome the curse of dimensionality and...

I develop an adaptive learning model to study the welfare effects of Social Security policy uncertainty in an aging economy. Agents combine full knowledge of the political process (which Social Security reforms are possible and when they could occur) with limited knowledge about the structure of...

The paper addresses two related issues: the optimal intergenerational sharing of labor productivity risks, through a Pay-As-You-Go (PAYG) social security, and the mix of PAYG and savings for retirement provision in a small open economy. It shows that partial contingency of the social security on...