What Is the Natural Weight of the Current Old?

Damien Gaumont, Daniel Leonard

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

DOI: 10.4236/tel.[phone]                

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

Conflicts of Interest

The authors declare no conflicts of interest.

References

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