NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Private Pensions and Inflation

Martin Feldstein

NBER Working Paper No. 568 (Also Reprint No. r0169)
Issued in October 1980
NBER Program(s):   PE

Much of the recent discussion about the relation between pensions and inflation has emphasized the adverse impact that the un-expected rise in inflation has had on pension recipients and on the performance of pension funds. In contrast, the present paper focuses on the way that pensions are likely to evolve in response to the expectation of continued inflation in the future and to the uncertainty about the rate of inflation. The unfortunate effects that occurred when inflation caught pensioners and pension fund managers by surprise should not be confused with an inability to adjust to future conditions, even uncertain future conditions. As I shall explain, the persistence of a high rate of inflation is likely to increase the share of total saving that goes into private pensions. Since the tax treatment of pension contributions allows individuals to save in this way for retirement on the same terms that they would under a consumption tax,' the existence of the private pension system may be one of a few things that prevents the national saving rate from going even lower in the current inflationary environment.

download in pdf format
   (172 K)

email paper

This paper is available as PDF (172 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0568

Published: Feldstein, Martin. "Private Pensions and Inflation." The American Economic Review, Vol. 71, No. 2, (May 1981), pp. 424-428.

Users who downloaded this paper also downloaded these:
Bulow The Effect of Inflation on the Private Pension System
Bodie, Marcus, and Merton Defined Benefit versus Defined Contribution Pension Plans: What are the Real Trade-offs?
Feldstein Inflation, Capital Taxation, and Monetary Policy
Freeman w1226 Unions, Pensions, and Union Pension Funds
Card and Ransom w13275 Pension Plan Characteristics and Framing Effects in Employee Savings Behavior
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us