Now showing items 1-6 of 6
Idiosyncratic Risk, Aggregate Risk, and the Welfare Effects of Social Security
We ask whether a pay-as-you-go financed social security system is welfare improving in an economy with idiosyncratic productivity and aggregate business cycle risk. We show analytically that the whole welfare benefit from ...
A Life-Cycle Model with Ambiguous Survival Beliefs
Based on a cognitive notion of neo-additive capacities reflecting likelihood insensitivity with respect to survival chances, we construct a Choquet Bayesian learning model over the life-cycle that generates a motivational ...
Social Security in an Analytically Tractable Overlapping Generations Model with Aggregate and Idiosyncratic Risk
When markets are incomplete, social security can partially insure against idiosyncratic and aggregate risks. We incorporate both risks into an analytically tractable model with two overlapping generations. We derive the ...
Endogenous Grids in Higher Dimensions: Delaunay Interpolation and Hybrid Methods
This paper investigates extensions of the method of endogenous gridpoints (ENDGM) introduced by Carroll (2006) to higher dimensions with more than one continuous endogenous state variable. We compare three different ...
Aging and Pension Reform: Extending the Retirement Age and Human Capital Formation
Projected demographic changes in industrialized and developing countries vary in extent and timing but will reduce the share of the population in working age everywhere. Conventional wisdom suggests that this will increase ...
The Impact of Biases in Survival Beliefs on Savings Behavior
"On average young people ""undersave"" whereas old people ""oversave"" with respect to the rational expectations model of life-cycle consumption and savings. According to numerous studies on subjective survival beliefs, ...