Abstract
This paper studies the design of an optimal pension scheme in an OLG and open economy model. The pension scheme provides a flat rate benefit and is based on the PAYG principle. It thus combines inter- and intra-generational redistribution. In this setting a number of symmetric economies are connected by an open and perfect capital market. When this number is very large, we have the small open economy case; when it is reduced to one, we have the case of autarky or perfect coordination. As the number of countries increases, there is more intragenerational redistribution, but less capital accumulation.
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JEL Code H55 · H87
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Pestieau, P., Piaser, G. & Sato, M. PAYG pension systems with capital mobility. Int Tax Public Finan 13, 587–599 (2006). https://doi.org/10.1007/s10797-006-6079-3
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DOI: https://doi.org/10.1007/s10797-006-6079-3