Effects of the taxation on inheritance in a microfounded model of growth and post-Keynesian distribution with overlapping generations and life cycle

Sugahara, Renato Nozaki; Aragón, Edilean Kleber da Silva Bejarano; Cunha, Marina Silva da; Perdigão, Claudia

doi:10.1016/j.econ.2016.09.002

Cited by 1 publication

(1 citation statement)

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“…Therefore, the model and their extensions [like Teixeira, Sugahara and Baranzini (2002); Baranzini, Bejuino and Teixeira (2003); Wei and Araujo (2009); Sugahara, Aragón, da Cunha, Perdigão (2016); and Góes and Teixeira (2022)] does not deal with the social security system, which interferes in the dynamic of the model, since the consumption of the retired persons is composed by the social security. In this vein, we decided to introduce the PAYG system in a balanced government budget, where the public revenue is used as income transfer from capitalists and younger workers to the retired workers' consumption.…”

Section: Introductionmentioning

confidence: 99%

A Life-Cycle Intergenerational Model Considering Social Security

Estulano Vieira,

De Araujo Oliveira,

Nozaki Sugahara

2023

BKR

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The central objective of this paper is to deliver an intergenerational Life Cycle model considering the retirement process based on the pay-as-you-go system (PAYG). Our model is inspired by Baranzinis’ approach, where the optimal consumption analysis is made in a two-class type and restricted by the capital variation of each one. Our main results observe the equilibrium solution of the consumption and capital stock to both classes and conclude that the PAYG system does interfere with the results, as well as the time preference to leave or not inheritance. The methodology approached here is the Pontryagins’ Maximum Principle. We also applied a numerical simulation to ensure the robustness of our approach.

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Section: Introductionmentioning

confidence: 99%