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Intergenerational Intermediation and Altruistic Preferences

dc.contributor.authorEden, Benjamin
dc.description.abstractThe paper analyzes the intermediation role of government under the assumption that it has an advantage over the private sector in collecting uncollateralized loan payments. It isshown that a government loan program may improve the welfare of all generations (including the current old generation) if agents care about future generations in the time inconsistent manner originally proposed by Phelps and Pollak (1968). Numerical examples suggest that the welfare gains from intervention may be quite large and depends on the degree of altruism as defined by Phelps and Pollak. The welfare gains are large when agents are relatively “egoistic†because in this case the time inconsistency problem is more severe and there is more room for intervention.
dc.publisherVanderbilt Universityen
dc.subjectInconsistent Altruistic Behavior
dc.subjectInvestment in Children
dc.subjectGovernment Loan Program
dc.subjectJEL Classification Number: E21
dc.subjectJEL Classification Number: E42
dc.subjectJEL Classification Number: E52
dc.titleIntergenerational Intermediation and Altruistic Preferences
dc.typeWorking Paperen

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