Time-inconsistent preferences and social security: Revisited in continuous time

Imrohoroglu et al. (2003) prove that it is impossible in a three period partial equilibrium model for social security to improve the welfare of a naive quasi-hyperbolic agent if the program has a negative net present value. This paper first generalizes their impossibility theorem to a continuous time setting and then proves analytically that no discount function exists that can rationalize a social security program with a negative net present value.

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Year of publication:	2011
Authors:	Caliendo, Frank N.
Published in:	Journal of Economic Dynamics and Control. - Elsevier, ISSN 0165-1889. - Vol. 35.2011, 5, p. 668-675
Publisher:	Elsevier
Subject:	Time inconsistency Social security

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008864774