The paper aims to assess tax-favored retirement accounts in a general-equilibrium overlapping-generations economy with idiosyncratic income risk and borrowing constraints. Our simulations indicate that tax-favored retirement accounts as implemented in many OECD countries will have a significant...

The present paper simulates the privatization of social security in an economy populated by overlapping generations of individuals that have time-consistent or time-inconsistent preferences, face mortality and individual income risk as well as borrowing constraints. We compute the transition...

The present paper clarifies the intergenerational welfare effects of life annuities. While present young cohorts experience significant welfare gains, future generations are hurt by lower bequest. For sufficiently high interest rates long-run welfare will decrease although aggregate efficiency...

Abstract This economic policy forum is assigned to the question “Does the European Union need a new financial order?” Hans Fehr considers the recent development of the budget of the EU and discusses a number of reform options for the future. He shows that during the 90ies there has been...