In the real world, two types of education investment may exist. One of these contributes to labor skills, and the other does not, corresponding to human capital and signal invest- ment, respectively. The question is how individuals determine the ratio of these alternative investments. In...

This paper develops an overlapping-generations model with nominal wage rigidities and examines the welfare effects of debt policy during recessions. Issues of public debt stimulate aggregate consumption demand and create employment. Future generations then face both increased wage incomes and...

Using an overlapping generations model, this note shows that an improvement in the efficiency of human capital production decreases the net income of the young household while increasing that of the old. Without compensating redistribution, it deteriorates lifetime utilities of all generations...

We consider a two-period overlapping generations model where agents face the uncertainty of intergenerational transfers from their children. To avoid this kind of risk, agents have an incentive to share the risk within the same generation. However, there exists an information asymmetry about the...

In this paper, we use a two-period overlapping generations model to examine the behavior of an economy that incorporates intergenerational transfers of time. In the first part, we describe the dynamics and steady state of the economy in which there is no government. We show that the rate of life...

This paper constructs an endogenous growth model with overlapping generations, whose engine of economic growth is productive public capital. The government faces a trade-off in public policy between public investment and social security provision because of its budget constraint. Larger public...