Under concerns for relative consumption a PAYG system becomes more attractive because it insures pensioners against the risk of being outperformed, but it becomes potentially less effective in hedging the risks associated with financial markets. The net effect is ambiguous.

The desirability of pay-as-you-go pensions when relative consumption matters and returns are stochastic

E. Bilancini;
2012-01-01

Abstract

Under concerns for relative consumption a PAYG system becomes more attractive because it insures pensioners against the risk of being outperformed, but it becomes potentially less effective in hedging the risks associated with financial markets. The net effect is ambiguous.
2012
Pay-as-you-go pensions; Fully funded pensions; Relative consumption; Risk aversion; Relativity
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/20.500.11771/3903
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