Life-Cycle Horizon Learning, Social Security Reform, and Policy Uncertainty

2018 ◽  
Author(s):  
Erin Cottle Hunt
Keyword(s):  
Life Cycle ◽  
Social Security ◽  
Policy Uncertainty ◽  
Social Security Reform

Welfare Implications of Uncertain Social Security Reform

2020 ◽  
Vol 48 (4) ◽  
pp. 425-466
Author(s):  
Jaeger Nelson
Keyword(s):  
Social Security ◽  
Overlapping Generations ◽  
Welfare Effects ◽  
Policy Uncertainty ◽  
Social Security Reform ◽  
Overlapping Generations Model ◽  
Aggregate Risk ◽  
Highly Sensitive ◽  
Welfare Implications ◽  
Future Policy

Policy uncertainty is a type of aggregate risk that has important economic and welfare implications. In this article, I develop a simple general equilibrium overlapping generations model in which households are uncertain as to the type and timing of an inevitable Social Security reform. I document how households’ expectations over the path of future policy influences their behavior. I find that the economic and welfare effects of policy uncertainty are highly sensitive to households’ beliefs over the path of future policy.

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