Capital Accumulation Under Uncertain Lifetimes PDF Download
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Author: Eatzaz Ahmad
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 54
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Book Description
Author: Eatzaz Ahmad
Publisher:
ISBN:
Category : Capital investments
Languages : en
Pages : 54
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Book Description
Author: Luisa Fuster
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
This paper studies the effects of uncertain lifetime on capital accumulation and growth and also the sensitivity of those effects to the existence of a perfect annuities market. The model is an overlapping generations model with uncertain lifetimes. The technology is convex and such that the marginal product of capital is bounded away from zero. A contribution of this paper is to show that the existence of accidental bequests may lead the economy to an equilibrium that exhibits asymptotic growth, which is impossible in an economy with a perfect annuities market or with certain lifetimes. This paper also shows that if individuals face a positive probability of surviving in every period, they may be willing to save at any age. This effect of uncertain lifetime on savings may also lead the economy to an equilibrium exhibiting asymptotic growth even if there exists a perfect annuities market.
Author: Andrew B. Abel
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
This paper examines the implications of adverse selection in the private annuity market for the pricing of private annuities and the consequent effects on constrption and bequest behavior. With privately known heterogeneous mortality probabilities, adverse selection causes the rate of return on private annuities to be less than the actuarially fair rate based on population average mortality. However, a fully funded social security system with compulsory participation can offer an implied rate of return equal to the actuarially fair rate based on population average mortality. Thus, since social security offers a higher rate of return than private annuities, consumers cannot completely offset the effects of social security by transacting in the private annuity market. Using an overlapping generations model with uncertain lifetimes, we demonstrate that the introduction of actuarially fair social security reduces the steady state rate of return on annuities and raises the steady state levels of average bequests and average consumption of the young. The steady state national capital stock rises or falls according to the strength of the bequest motive
Author: M. Luisa Fuster Pérez
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Author: Martin Eichenbaum
Publisher:
ISBN:
Category :
Languages : en
Pages : 35
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Book Description
This paper suggests that adverse selection problems in competitive annuity markets can generate quantity constrained equilibria in which some agents whose length of lifetime is uncertain find it advantageous to accumulate capital privately. This occurs despite the higher rates of return on annuities. The welfare properties of these allocations are analyzed. It is shown that the level of capital accumulation is excessive in a Paretian sense. Policies which eliminate this inefficiency are discussed.
Author: Tapendra Narayan Sinha
Publisher:
ISBN:
Category :
Languages : en
Pages : 158
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Author:
Publisher:
ISBN:
Category : Annuities
Languages : en
Pages : 29
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Book Description
This paper suggests that adverse selection problems in competitive annuity markets can generate quantity constrained equilibria in which some agents whose length of lifetime is uncertain find it advantageous to accumulate capital privately. This occurs despite the higher rates of return on annuities. The welfare properties of these allocations are analyzed. It is shown that the level of capital accumulation is excessive in a Paretian sense. Policies which eliminate this inefficiency are discussed
Author: Luisa Fuster
Publisher:
ISBN:
Category : Annuities
Languages : en
Pages : 23
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Book Description
Author: Eugen von Böhm-Bawerk
Publisher: Ludwig von Mises Institute
ISBN: 1610163648
Category : Capital
Languages : en
Pages : 468
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Book Description
Author: Frank H. Knight
Publisher: Cosimo, Inc.
ISBN: 1602060053
Category : Business & Economics
Languages : en
Pages : 401
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Book Description
A timeless classic of economic theory that remains fascinating and pertinent today, this is Frank Knight's famous explanation of why perfect competition cannot eliminate profits, the important differences between "risk" and "uncertainty," and the vital role of the entrepreneur in profitmaking. Based on Knight's PhD dissertation, this 1921 work, balancing theory with fact to come to stunning insights, is a distinct pleasure to read. FRANK H. KNIGHT (1885-1972) is considered by some the greatest American scholar of economics of the 20th century. An economics professor at the University of Chicago from 1927 until 1955, he was one of the founders of the Chicago school of economics, which influenced Milton Friedman and George Stigler.
