Growth versus Security Choice and the Generational Difference in Preferences

The primary purpose of the paper is to capture in a growth model the conflict of interests between the generation of the young and entrepreneurial on the one hand and the generation of the old and pensioners on the other. The model is applied to assess the size of the gap between optimal economic policies for these two groups. The key role of the time preference rate is shown. The theoretical results obtained are then used to interpret the differences in actual economic policies between Central Europe and China