TY  - JOUR
AU  - Gordon,Roger H.
AU  - Varian,Hal R.
TI  - Intergenerational Risk Sharing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 1730
PY  - 1985
Y2  - October 1985
UR  - http://www.nber.org/papers/w1730
L1  - http://www.nber.org/papers/w1730.pdf
N1  - Author contact info:
Roger H. Gordon
Department of Economics 0508
University of California, San Diego
9500 Gilman Drive, Dept. 0508
La Jolla, CA 92093
Tel: 858/534-4828
Fax: 858/534-7040
E-Mail: rogordon@ucsd.edu

Hal Varian
576 Del Amigo Rd
Danville, CA 94526
Tel: 925 262 3641
E-Mail: hal@sims.berkeley.edu
AB  - 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.
ER  -