Schneider, Maik T.; Traeger, Christian; Winkler, Ralph (March 2010). Trading Off Generations: Infinitely-Lived Agent Versus OLG (Discussion Papers 10-07). Bern: Department of Economics
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The prevailing literature discusses intergenerational trade-offs predominantly in infinitely-lived agent models despite the finite lifetime of individuals. We discuss these trade-offs in a continuous time OLG framework and relate the results to the infinitely-lived agent setting. We identify three shortcomings of the latter: First, underlying normative assumptions about
social preferences cannot be deduced unambiguously. Second, the distribution among generations living at the same time cannot be captured. Third, the optimal solution may not be implementable in overlapping generations market economies. Regarding the recent debate on climate change, we conclude that it is indispensable to explicitly consider the generations’ life cycles.
Item Type: |
Working Paper |
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Division/Institute: |
03 Faculty of Business, Economics and Social Sciences > Department of Economics |
UniBE Contributor: |
Winkler, Ralph |
Subjects: |
300 Social sciences, sociology & anthropology > 330 Economics |
Series: |
Discussion Papers |
Publisher: |
Department of Economics |
Language: |
English |
Submitter: |
Lars Tschannen |
Date Deposited: |
14 Oct 2020 15:39 |
Last Modified: |
05 Dec 2022 15:39 |
JEL Classification: |
D63, H23, Q54 |
BORIS DOI: |
10.7892/boris.145728 |
URI: |
https://boris.unibe.ch/id/eprint/145728 |
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