On Overlapping Generations Models With Productive Capital

This book was born out of a five-years research at Sonderforschungsbe­ reich 303 by the Deutsche Forschungsgemeinschaft (DFG) at Rheinische Friedrich-Wilhelms-Universitiit Bonn and was approved as my doctoral thesis by the Rechts-und Staatswissenschaftliche Fakultiit in December 1994. This text examines several unsolved problems in OLG models with productive capital. It uses Diamond analysis for a model with variable population growth and characterizes dynamically efficient allocations. The design of PAYE pension schemes and governemnt debt to achieve a Pareto-improvement of inefficient growth paths are invesitgated. Departing from pure efficiency aspects, the text turns to questions of intergenerational fairness optimal population growth. Finally, introducing a polito-economic model of transfers between generations, conflicting preferences between an infinite sequence of governments are solved for a Markov-perfect equilibrium, providing insights into mechanisms of growth and the nature of capital income tax.