Many countries around the world are experiencing a significant shift in demographic patterns towards an older population. The age composition of the labor force has also changed dramatically, often accompanied by sharp reductions in the labor force participation rates of older workers. These...

This paper represents a first attempt at a tractable analysis of how monetary policy influences the income distribution in an economy. It presents a monetary growth model in which inflation affects credit market efficiency, and via this link, influences capital accumulation, and the income...

Much of Africa has been ravaged by the AIDS epidemic. There, heterosexual contact is the primary mode of transmission for the HIV virus. Even when access to condoms is good and their price low, a large fraction of young Africans continue to engage in unprotected sex. In this paper, we propose a...

Sargent and Wallace (1981) study the feasibility of a bond-financed increase in government spending. In their "unpleasant monetarist arithmetic," Sargent and Wallace show how using bonds to finance a permanent deficit today may necessitate faster money growth in the future, yielding higher...

Does it matter in a revenue-neutral setting if the government changes the inflation tax base or the inflation tax rate? We answer this question within the context of an overlapping generations model in which government bonds, capital, and cash reserves coexist. We consider experiments that...

This paper reconsiders the link between tight money policies and inflation in the spirit of Sargent and Wallace's (1981) influential paper "Some Unpleasant Monetarist Arithmetic''. A standard neoclassical model with production, capital, bonds, and return-dominated currency is used to study the...

It has been argued that "paternalistically motivated forced savings constitutes an important, and to some the most important, rationale for social security retirement systems." This paper revisits the role played by myopia in generating a theoretical rationale for pay-as-you-go social security...

Does monetizing a deficit result in a higher or a lower rate of inflation than does bond financing the same deficit? Sargent and Wallace (1981) produced conditions under which bond finance leads to a higher rate of inflation than deficit monetization ("unpleasant monetarist arithmetic'')....

Abstract. A classic result in dynamic public economics, dating back to Aaron (1966) and Samuelson (1975), states that there is no welfare rationale for PAYG pensions in a dynamically-efficient neoclassical economy with exogenous labor supply. This paper argues that this result, under the...