In this paper we focus on the theoretical issue of the efficiency or neutrality of public debt in growth models with capital accumulation. We show, considering several OLG models, that this is the decision of the households in terms of bequests that matters for the validity of the Ricardian...

We consider a life-cycle model with bequest motives, and assume that the individual does not know his/her survival probability and has maxmin utility preferences; we show that it is optimal not to annuitize but to purchase pure life insurance policies instead.