Pension systems are of crucial importance for life-cycle savings. Since the early 2000s, a transition to a multi-pillar architecture, adding a funded occupational scheme to existing public plans, has been underway in almost every OECD nation. While many aspects of this transition – its...

In this paper, we consider a government that executes a permanent open market sale. The government is forced to eventually monetize the debt, choosing between changing either the money growth rate (the inflation-tax rate) or the reserve requirement ratio (the inflation-tax base). We first derive...

This paper clarifies and extends previous work on the equivalence between monetary regimes and fiscal regimes involving social security systems. We show that monetary regimes involving currency and unbacked bonds, with or without reserve requirements, are equivalent to one or both of two...

This paper takes a discrete-time adaptation of the continuous-time matching economy of Pissarides (1990, 2001) discussed in Ljungqvist and Sargent (2000) and computes the solution to the dynamic planning problem. The solution is shown to be completely characterized by a first-order, non-linear...

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...

The tug-o-war for supremacy between inflation targeting and monetary targeting is a classic, yet timely topic, in monetary economics. In this paper, we revisit this issue within the context of a pure-exchange, overlapping generations model in which spatial separation and random relocation create...