We explore the benefits of intergenerational risk-sharing through both private funded pensions and via the public debt. We use a multi-period overlapping generations model with a PAYG pension pillar, a funded pension pillar and a government. Shocks are smoothed via the public debt and variations...

The paper proposes an operational definition of safe public debt levels and discusses various concrete approaches to calculate them. A public debt level is considered safe if it is associated with a low probability of reaching levels likely to generate significant economic costs within a given...

The paper gives conditions for dynamic inefficiency of laissez-faire allocations in an overlapping-generations model with safe and risky assets. If the rate of population growth is certain, the conditions given depend only on how the rate of return on safe assets compares to the growth rate. If...