The desirability of pay-as-you-go pensions when relative consumption matters and returns are stochastic

Under concerns for relative consumption a PAYG system becomes more attractive because it insures pensioners against the risk of being outperformed, but it becomes potentially less effective in hedging the risks associated with financial markets. The net effect is ambiguous.

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Year of publication:	2012
Authors:	Bilancini, Ennio ; D’Antoni, Massimo
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 117.2012, 2, p. 418-422
Publisher:	Elsevier
Subject:	Pay-as-you-go pensions \| Fully funded pensions \| Relative consumption \| Risk aversion \| Relativity

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Type of publication:	Article
Classification:	H55 - Social Security and Public Pensions
Source:	RePEc - Research Papers in Economics

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