A tFragedy of Annuitization? Longevity Insurance in General Equilibrium

2011 ◽  
Author(s):  
Ben J. Heijdra ◽  
Jochen O. Mierau ◽  
Laurie S.M. Reijnders
Keyword(s):  
General Equilibrium ◽  
Longevity Insurance

A TRAGEDY OF ANNUITIZATION? LONGEVITY INSURANCE IN GENERAL EQUILIBRIUM

2013 ◽  
Vol 18 (7) ◽  
pp. 1607-1634 ◽  
Author(s):  
Ben J. Heijdra ◽  
Jochen O. Mierau ◽  
S. M. Reijnders
Keyword(s):  
General Equilibrium ◽  
Life Insurance ◽  
Overlapping Generations ◽  
The Elderly ◽  
Positive Probability ◽  
Closed Economy ◽  
Overlapping Generations Model ◽  
Long Run ◽  
Different Types ◽  
Longevity Insurance

We study the microeconomic and macroeconomic effects of longevity insurance. Using a tractable discrete-time overlapping-generations model of a closed economy we first study different types of government redistribution of accidental bequests in general equilibrium. Individuals face longevity risk, as there is a positive probability of passing away before the retirement period. We find nonpathological cases where it is better for long-run welfare to waste accidental bequests than to give them to the elderly. Next we study the introduction of a perfectly competitive life insurance market offering actuarially fair annuities. There exists a tragedy of annuitization: although full annuitization of assets is privately optimal, it is not socially beneficial, because of adverse general equilibrium repercussions.

What Did The Study of The Soviet Economy Contribute to Mainstream Economics?

2010 ◽  
pp. 39-55
Author(s):  
M. Ellman
Keyword(s):  
Economic Growth ◽  
Property Rights ◽  
General Equilibrium ◽  
Informal Sector ◽  
Institutional Economics ◽  
Soviet Economy ◽  
General Equilibrium Theory ◽  
Mainstream Economics ◽  
Universal Applicability ◽  
Soviet Experience

This article is an overview of the contribution made by economic Sovietology to mainstream economics. The long debate about the universal applicability of mainstream economics is reconsidered in the light of the Soviet experience. Information is provided on the contribution of the study of the Soviet economy to fields as diverse as the measurement of economic growth, institutional economics, economic administration, the economics of property rights, the economics of the informal sector, the economics of famines, the Austrian critique of general equilibrium theory, and incentives.

Some Developments in Economic Theory Since 1940: An Eyewitness Account

2010 ◽  
pp. 4-23 ◽  
Author(s):  
K. Arrow
Keyword(s):  
Economic Theory ◽  
General Equilibrium ◽  
Equilibrium Theory ◽  
General Equilibrium Theory ◽  
Economics Of Information ◽  
Modern Economic ◽  
Eyewitness Account ◽  
Theory Uncertainty ◽  
Professional Formation

The article considers the evolution of some branches of modern economic theory from the perspective of the authors biography as a scientist and his professional formation. It describes problems of econometrics, general equilibrium theory, uncertainty, economics of information, and growth. It is shown how different authors representing various fields came to similar conclusions simultaneously and independently, what were the problems, in response to which economists of the second half of last century developed their theories, and what were the contexts of such development.

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