It has repeatedly been proposed to reduce conventional pay-as-you-go-systems to a base level, leaving advanced retirement provision for private funded systems. However, pay-asyou-go systems are, in a sense, one way roads, with no available Pareto efficient way out. The paper discusses a combined...

The stock market collapse led to political tensions between generations due to the fuzzy definition of the property rights over the pension funds’ wealth. The problem is best resolved by the introduction of generational accounts. Modern consumption and portfolio theory shows that the younger...