NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Intergenerational Risk Sharing

Roger H. Gordon, Hal R. Varian

NBER Working Paper No. 1730
Issued in October 1985
NBER Program(s):   PE

In this paper, we argue that in designing government debt and tax-transfer policies, it is important to consider their implications for the allocation of risk between generations. There is no reason to presume that the market or the family can allocate risk efficiently to future generations, implying that stochastic government policies have the potential to create first-order welfare improvements. The model provides a non-Keynsian justification for debt-finance of wars and recessions, as well as an added rationale for Social Security type tax-transfer schemes which aid unlucky generations, e.g., the Depression generation,at the expense of luckier generations.

download in pdf format
   (240 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w1730

Published: Gordon and Varian, "Intergenerational Risk Sharing," from Journal of Public Economics, Vol.37, no. 2, pp. 185-202, November 1988. citation courtesy of

Users who downloaded this paper also downloaded* these:
Bodie, Marcus, and Merton Defined Benefit versus Defined Contribution Pension Plans: What are the Real Trade-offs?
Ball and Mankiw w8270 Intergenerational Risk Sharing in the Spirit of Arrow, Debreu, and Rawls, with Applications to Social Security Design
Ventura and Broner w12482 Globalization and Risk Sharing
Sinn w7592 Why a Funded Pension System is Useful and Why It is Not Useful
Merton On the Role of Social Security as a Means for Efficient Risk Sharing in an Economy Where Human Capital Is Not Tradable
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

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

Contact Us