Elderly Care and Multiple Monies

Hajime Tomura

No 1909, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: This paper presents an overlapping generations model in which old generations require specific services from young generations due to idiosyncratic shocks. An example of such services is elderly care. The model shows that a two-money system in which fiat money for such services is separated from that for the other types of goods and services can replicate the resource allocation in a one-money system with a fair insurance. For this result, it is necessary to prohibit old generations from exchanging different types of fiat monies in the two-money system. The model implies that the introduction of fiat money for elderly care reduces the real value of government bonds outstanding in the country.

Pages: 15 pages
Date: 2019-06
New Economics Papers: this item is included in nep-age, nep-dge and nep-ias
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Persistent link: https://EconPapers.repec.org/RePEc:wap:wpaper:1909

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