Time-inconsistent preferences and social security: Revisited in continuous time

Frank Caliendo

Journal of Economic Dynamics and Control, 2011, vol. 35, issue 5, 668-675

Abstract: Imrohoroglu et al. (2003) prove that it is impossible in a three period partial equilibrium model for social security to improve the welfare of a naive quasi-hyperbolic agent if the program has a negative net present value. This paper first generalizes their impossibility theorem to a continuous time setting and then proves analytically that no discount function exists that can rationalize a social security program with a negative net present value.

Keywords: Time; inconsistency; Social; security (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:35:y:2011:i:5:p:668-675

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