We examine the optimal policy response to an exogenously given demographic shock. Such a shock affects negatively the financing of retirement pensions, and we use optimal fiscal policy in order to determine the optimal strategy of the social security administration. Our approach provides...

We examine the optimal policy response to an exogenously given demographic shock. Such a shock affects negatively the financing of retirement pensions, and we use optimal fiscal policy in order to determine the optimal strategy of the social security administration. Our approach provides...

Free college proposals have become increasingly popular in many countries, yet cross-country evidence indicates that higher college subsidies raise enrollment but not graduation rates. To capture the evidence and evaluate proposals, this paper develops and estimates a dynamic model of college...