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SOCIAL SECURITY AND AGGREGATE CAPITAL ACCUMULATION REVISITED: DYNAMIC SIMULTANEOUS ESTIMATES IN A WEALTH‐GENERATION MODEL
Author(s) -
BEACH CHARLES M.,
BOADWAY ROBIN W.,
GIBBONS JACK O.
Publication year - 1984
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1984.tb00667.x
Subject(s) - economics , capital accumulation , capital (architecture) , context (archaeology) , econometrics , aggregate (composite) , private capital , microeconomics , monetary economics , production (economics) , geology , profit (economics) , paleontology , materials science , archaeology , composite material , history
This paper re‐examines Feldstein's(1974, 1982)results of the effect of social security on private capital accumulation in the context of a simultaneous‐equation model of capital accumulation. The model incorporates dynamic feedback effects in capital accumulation and is estimated by FIML to incorporate theoretical restrictions that are tested against the data. It is then simulated as a full dynamic model to analyze the long‐run effect of SSW on private capital accumulation. The simulated effects are in the same direction as found by Feldstein, but are considerably weaker.