Public pensions and the role of real versus financial capital

Berthold Wigger ()

Journal of Pension Economics and Finance, 2005, vol. 4, issue 1, 7-16

Abstract: The paper introduces an unfunded public pension program into an overlapping generations framework recently proposed by Magill and Quinzii (2003). The crucial distinction of the Magill and Quinzii framework is that the financial value of a firm may be lower than the replacement value of its capital. The present paper shows that in this framework unfunded public pensions negatively affect the financial value of firms but have no effect on real capital accumulation and welfare.

Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:cup:jpenef:v:4:y:2005:i:01:p:7-16_00

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