Journal ArticleDOI
Social welfare, parental altruism, and inequality
Pietro Reichlin,Pietro Reichlin +1 more
TLDR
In this paper, a planner selects Pareto optimal allocations based on some target level of consumption inequality, the solution implies an aggregation of individuals' utilities that is strongly asymmetric and biased toward the less altruistic dynasties.Abstract:
When individuals have heterogeneous and persistent degrees of one‐sided parental altruism, inequality may grow large and standard social welfare criteria are problematic. If the planner selects Pareto optimal allocations based on some target level of consumption inequality, the solution implies an aggregation of individuals' utilities that is strongly asymmetric and biased toward the less altruistic dynasties. If instead, the planner uses a symmetric utilitarian criterion, the solution is likely to generate a large degree of long‐run inequality (even relative to laissez‐faire competitive equilibria), it can only be decentralized with negative estate taxes or lower bounds on bequests, and it is time‐inconsistent.read more
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Is an unfunded social security system good or bad for growth? A theoretical analysis of social security systems financed by VAT
TL;DR: In this paper, the authors investigated how public pensions financed by VAT, as discussed in Japan, affect economic growth, and whether payroll tax or VAT is the more growth-friendly tax structure for the finance of public pensions.
References
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About Capital in the Twenty-First Century
TL;DR: In this article, the authors present three key facts about income and wealth inequality in the long run emerging from my book, Capital in the Twenty-First Century, and seek to sharpen and refocus the discussion about those trends.
Journal ArticleDOI
Are Government Bonds Net Wealth
TL;DR: In this article, the authors consider the effects of different types of intergenerational transfer schemes on the stock of public debt in the context of an overlapping-generations model and show that finite lives will not be relevant to the capitalization of future tax liabilities so long as current generations are connected to future generations by a chain of operative inter-generational transfers.
Book ChapterDOI
Myopia and Inconsistency in Dynamic Utility Maximization
TL;DR: In this article, the authors present a problem which has not heretofore been analysed and provide a theory to explain, under different circumstances, three related phenomena: (1) spendthriftiness; (2) the deliberate regimenting of one's future economic behaviour, even at a cost; and (3) thrift.
Journal ArticleDOI
Income and Wealth Heterogeneity in the Macroeconomy
Per Krusell,Anthony A. Smith +1 more
TL;DR: In this paper, a calibrated version of the stochastic growth model with partially uninsurable idiosyncratic risk and movements in aggregate productivity is used to analyze how movements in the distribution of income and wealth affect the macroeconomy.
Journal ArticleDOI
An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility
Gary S. Becker,Nigel Tomes +1 more
TL;DR: The theory of inequality and intergenerational mobility presented in this paper assumes that each family maximizes a utility function spanning several generations, which depends on the consumption of parents and on the quantity and quality of their children.