Fertility-related pensions and cyclical instability

Luciano Fanti and Luca Gori ()

MPRA Paper from University Library of Munich, Germany

Abstract: We show that the introduction of unfunded public pensions in a Cobb-Douglas economy with overlapping generations and endogenous fertility may cause complex economic cycles when individuals are short-sighted. In particular, the risk of cyclical instability increases with both the individual degree of thriftiness and the relative weight of individual fertility in the pension system. Our results provide a possible explanation of the occurrence of persistent cycles in an overlapping generations context and represent a policy warning about the dramatic destabilising effects of a fertility-related pension reform.

Keywords: Endogenous fertility; Fertility-related pensions; Myopic foresight; OLG model (search for similar items in EconPapers)
JEL-codes: C62 H55 J14 J18 J26 (search for similar items in EconPapers)
Date: 2010-01-23
New Economics Papers: this item is included in nep-dge
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Fertility-related pensions and cyclical instability (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20221

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