Intergenerational Altruism, Ricardian Equivalence and the Relevance of Distributional Policy

Richard N. Vaughan

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Abstract: In recent years there has been a growing controversy concerning the e¤ective role of distributional policy in economies in which agents hold altruistic preferences. We show that in order to establish cross sectional Distributional Neutrality households re- quire information on consanguinity links prior to making their decisions on consumption and bequests. If such information is not available due to the veil of time, then the Distributional Neutrality property disappears. However Ricardian Equivalence under stated conditions, remains and is therefore a property independent of DN.

Keywords: Macroeconomic Theory; Distributional Policy (search for similar items in EconPapers)
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