Universität zu Köln

Ludwig, Alexander and Reiter, Michael (2010). Sharing Demographic Risk-Who Is Afraid of the Baby Bust? Am. Econ. J.-Econ. Policy, 2 (4). S. 83 - 119. NASHVILLE: AMER ECONOMIC ASSOC. ISSN 1945-774X

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Abstract

We model the reaction of a PAYG pension system to demographic shocks. We compare the ex ante first best and second best solution of a Ramsey planner with full commitment to the outcome under simple third best rules. The model is calibrated to the German economy. We find that the German systetm comes relatively close to the second-best solution, and that the recent baby-boom/baby-bust cycle leads to welfare losses of about 5 percent of lifetime consumption far some cohorts. We argue that it is crucial for all our results to correctly model the labor market distortions arising from the pension system.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Ludwig, Alexander UNSPECIFIED UNSPECIFIED UNSPECIFIED Reiter, Michael UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-492826
DOI:	10.1257/pol.2.4.83
Journal or Publication Title:	Am. Econ. J.-Econ. Policy
Volume:	2
Number:	4
Page Range:	S. 83 - 119
Date:	2010
Publisher:	AMER ECONOMIC ASSOC
Place of Publication:	NASHVILLE
ISSN:	1945-774X
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language OPTIMAL TAXATION; SOCIAL-SECURITY; MODEL; POPULATION; EFFICIENCY; LIFETIME; WELFARE; REFORM Multiple languages Economics Multiple languages
URI:	http://kups.ub.uni-koeln.de/id/eprint/49282