TY  - JOUR
AU  - Ball,Laurence
AU  - Mankiw,N. Gregory
TI  - Intergenerational Risk Sharing in the Spirit of Arrow, Debreu, and Rawls, with Applications to Social Security Design
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8270
PY  - 2001
Y2  - May 2001
UR  - http://www.nber.org/papers/w8270
L1  - http://www.nber.org/papers/w8270.pdf
N1  - Author contact info:
Laurence M. Ball
Department of Economics
Johns Hopkins University
Baltimore, MD 21218
Tel: 410/516-7605
Fax: 410/516-7600
E-Mail: lball@jhu.edu

N. Gregory Mankiw
Department of Economics
Littauer 223
Harvard University
Cambridge, MA  02138
Tel: 617/495-4301
Fax: 617/495-7730
E-Mail: ngmankiw@fas.harvard.edu
AB  - This paper examines the optimal allocation of risk in an overlapping-generations economy.  It compares the allocation of risk the economy reaches naturally to the allocation that would be reached if generations behind a Rawlsian 'veil of ignorance' could share risk with one another through complete Arrow-Debreu contingent-claims markets.  The paper then examines how the government might implement optimal intergenerational risk sharing with a social security system.  One conclusion is that the system must either hold equity claims to capital or negatively index benefits to equity returns.
ER  -