A closed-form solution to a model of two-sided, partial altruism

Fernandes, Ana (2012). A closed-form solution to a model of two-sided, partial altruism. Macroeconomic dynamics, 16(2), pp. 230-239. Cambridge University Press 10.1017/S1365100510000064

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This paper presents a closed-form characterization of the allocation of resources in an overlapping generations model of two-sided, partial altruism. Three assumptions are made: (i) parents and children play Markov strategies, (ii) utility takes the CRRA form, and (iii) the income of children is stochastic but proportional to the saving of parents. In families where children are rich relative to their parents, saving rates—measured as a function of the family's total resources—are higher than when children are poor relative to their parents. Income redistribution from the old to the young, therefore, leads to an increase in aggregate saving.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics

UniBE Contributor:

Fernandes, Ana

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

1365-1005

Publisher:

Cambridge University Press

Language:

English

Submitter:

Marceline Brodmann

Date Deposited:

22 Jul 2020 16:21

Last Modified:

27 Jul 2020 01:01

Publisher DOI:

10.1017/S1365100510000064

BORIS DOI:

10.7892/boris.115453

URI:

https://boris.unibe.ch/id/eprint/115453

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