What Is the Natural Weight of the Current Old? - Theoretical Economics Letters

TEL > Vol.3 No.5, October 2013

What Is the Natural Weight of the Current Old? ()

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Download as PDF (Size: 167KB) PP. 257-261

DOI: 10.4236/tel.2013.35043 3,612 Downloads 5,419 Views

Author(s)

Damien Gaumont, Daniel Leonard

Affiliation(s)

.
Pantheon-Assas, Sorbonne Universities, ERMES EAC 7181 CNRS, CRED, Institute for Labor Studies.

ABSTRACT

We consider a simple overlapping generations model with an externality à la Arrow-Romer [1,2] and a government with fiscal powers. If it wishes to maximize a criterion depending on the lifelong utility of agents, is there a natural weight for the utility of the current old? We show in a simple example that this weight depends on the specific features of the model, in particular the length of the horizon, and cannot be chosen arbitrarily. Our result has a neat economic interpretation [2].

KEYWORDS

Overlapping Generations Model; Learning-by-Doing; Social Welfare

Share and Cite:

D. Gaumont and D. Leonard, "What Is the Natural Weight of the Current Old?," Theoretical Economics Letters, Vol. 3 No. 5, 2013, pp. 257-261. doi: 10.4236/tel.2013.35043.

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