Bequests and the Intergenerational Degree of Altruism

We consider an OLG model with production and altruistic agents initially developed by Barro (1974). Through a simple example, we show that, contrary to the intuition of Abel (1987) and Weil (1987), an increase in the degree of altruism can result in a decrease in the stationary level of bequests even if the Diamond model has a unique and stable steady state. To rule out this counterintuitive case, an assumption on the curvature of the production function is necessary.OLG models, Bequest motive, Degree of altruism

Labor productivity and dynamic efficiency

This note exhibits sufficient conditions concerning the skills of old workers ruling out overaccumulation stationnary equilibria in an OLG model with productive capital. Using a Cobb-Douglas economy, we show that such conditions seem to be largely fullfilled in the industrialized countries.learning-by-doing

Is GDP a Relevant Social Welfare Indicator? A Savers-Spenders Theory Approach

The use of GDP as the main index of progress and welfare of a country has been the subject of a long debate amongst economists. Using and extending the saversspenders theory recently popularized by Mankiw (2000, AER), we analyze the theoretical relationships between GDP and the welfare of a society. This analysis is undertaken using several different overlapping generations models which all take into account the great heterogeneity of consumer behavior observed in the data (different labor supply choices, different degrees of altruism and/or different degrees of impatience to consume). The results indicate that GDP (per capita) is often a relevant index and is always a decent social welfare indicator

The Power of Love

We show that the presence of at least one individual who loves its children,whatever the intensity of this love, allows to avoid a possible global contraction of the economy

The Power of Love

We show that the presence of at least one individual who loves its children,whatever the intensity of this love, allows to avoid a possible global contraction of the economy

Intergenerational altruism and neoclassical growth models

This paper surveys intergenerational altruism in neoclassical growth models. It first examines Barro's approach to intergenerational altruism, whereby successive generations are linked by recursive altruistic preferences. Individuals have an altruistic concern only for their children, who in turn also have altruistic feelings for their own children. The conditions under which the Ricardian equivalence (debt neutrality) theorem applies are specified. The effectiveness of fiscal policy is further analysed in the context of an economy populated by heterogeneous families differing with respect to their degree of intergenerational altruism. Other forms of altruism, referred to as ad hoc altruism, are also examined, along with their implications for fiscal policy. JEL Classification: E13, D64, E62, C60altruism, fiscal policy, Neoclassical general aggregative models