Optimal response to a transitory demographic shock in social security financing
By: by Juan Carlos Conesa and Carlos Garriga
Contributors: Garriga, Carlos; Federal Reserve Bank of St. Louis
Series: Working paper -- 2007-041A; Working paper (Federal Reserve Bank of St. Louis : Online) -- 2007-041A.
Publisher: Federal Reserve Bank of St. Louis
Published: 2007
Place of publication: St. Louis, Mo.]
Language: eng
Format: [electronic resource] /
Description: "We examine the optimal policy response to a transitory demographic shock that affects negatively the financing of retirement pensions.  In contrast to existing literature, we endogenously determine optimal policies rather than exploring implications of exogenous parametric policies.  Our approach identifies optimal strategies of the social security administration to guarantee the financial sustainability of existing retirement pensions in a Pareto improving way.  Hence, no cohort will pay the cost of the demographic shock.  We find that the optimal strategy is based in the following ingredients: elimination of compulsory retirement, a change in the structure of labor income taxation and a temporary increase in the level of government debt"--Federal Reserve Bank of St. Louis web site.
Notes: Title from PDF file as viewed on 9/17/2007.

Includes bibliographical references.

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