Aging populations and increasing health-care costs will lead to an explosion in costs from long-term care (LTC) for permanently disabled elderly citizens. Governments are considering and implementing different kinds of policy responses, among them government-provided minimal care combined with...

What is the response of aggregate consumption to a deficit-financed tax cut? It is well-known that intergenerational transfers are key to answer this question. I address this issue by studying a heterogeneous-agents overlapping-generations economy with imperfect altruism. The model generates...