Pareto‐improving pension reform through technological implementation | Zendy

Roberts Mark A. | Zendy

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Pareto‐improving pension reform through technological implementation

Author(s) -

Roberts Mark A.

Publication year - 2013

Publication title -

scottish journal of political economy

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 0.4

H-Index - 46

eISSN - 1467-9485

pISSN - 0036-9292

DOI - 10.1111/sjpe.12013

Subject(s) - economics , pareto principle , pension , productivity , profit (economics) , overlapping generations model , total factor productivity , factor shares , microeconomics , technological change , macroeconomics , operations management , production (economics) , finance

We present a standard OLG model where a pension reform promotes the adoption of a new technology by lowering the interest rates that discount the future profit gains. This then leads to a rise in total factor productivity, which, for some parameter values, renders the reform Pareto‐improving. The analysis adds to the existing literature, concluding that a supply‐side response is necessary for any such improvement, and presents a rise in total factor productivity as another possible mechanism.

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