Economic Growth and the Politics of Intergenerational Redistribution

Tetsuo Ono

No 14-17, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper presents an overlapping-generation model featuring probabilistic vot- ing over two policy issues, namely, pension and public goods. To capture the forward-looking behavior of voters, we characterize a Markov-perfect political equi- librium in which the two policy variables are conditioned on a payoff-relevant state variable, that is, capital. It is shown that (i) as the population ages, the pension- to-GDP ratio and the growth rate of capital increase, but the public goods-to-GDP ratio decreases and (ii) the pension-to-GDP and public goods-to-GDP ratios are too high and the growth rate too low from the standpoint of social welfare.

Keywords: Economic Growth; Population Aging; Probabilistic Voting; Public Pension; Public Goods Provision (search for similar items in EconPapers)
JEL-codes: D70 E24 H55 (search for similar items in EconPapers)
Pages: 37 pages
Date: 2014-04
New Economics Papers: this item is included in nep-age, nep-cdm, nep-dge, nep-fdg, nep-gro, nep-mac and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Working Paper: Economic Growth and the Politics of Intergenerational Redistribution (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:1417

Access Statistics for this paper

More papers in Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by The Economic Society of Osaka University ().