On Overlapping Generations Models with Productive Capital

Book Description
This book examines several unsolved problems in OLG models with productive capital. It extends the well-known Diamond analysis to a model with variable population growth and characterizes dynamically efficient allocations. Then the design of pay-as-you-go pension schemes and government debt to achieve a Pareto-improvement of inefficient growth paths are investigated. Departing from pure efficiency aspects, the book turns to questions of intergenerational fairness and optimal population growth. Finally, introducing a polito-economic model of transfers between generations, conflicting preferences between an infinite sequence of governments are solved for a Markov-perfect equilibrium, providing some important insights into mechanisms of growth and the nature of capital income taxation.


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