This paper analyses the long-term growth and welfare impact of the transition to the market economy in the countries of Eastern Europe. We define welfare as the average real net wage after payments of social security contributions to fund a paygo-type pension system, and of taxes to service the...

This paper shows tha shifting the portfolio allocation of the social security trust fund towards more equity investment, ceteris paribus, reduces the aggregate capital stock as well as the average consumption level of all individuals except the poor retirees who receive an increase but at the...