PAYG pensions and economic cycles: exogenous versus endogenous fertility
Luciano Fanti () and
Luca Gori ()
Discussion Papers from Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy
We analyse the dynamics of an overlapping generations economy with unfunded pay-as-you-go public pensions and myopic expectations by comparing exogenous and endogenous fertility contexts. It is shown that large PAYG pensions may cause endogenous fluctuations in both cases. However, ceteris paribus, when the number of children is an economic decision variable the economy is much more prone to cyclical instability and deterministic chaos emerges.
Keywords: Myopic foresight; PAYG pension; Stability; OLG model (search for similar items in EconPapers)
JEL-codes: C62 H55 J14 J18 J26 (search for similar items in EconPapers)
Note: ISSN 2039-1854
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Persistent link: https://EconPapers.repec.org/RePEc:pie:dsedps:2008/75
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