Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/102243
Authors: 
Heijdra, Ben J.
Mierau, Jochen O.
Trimborn, Timo
Year of Publication: 
2014
Series/Report no.: 
CESifo Working Paper 4827
Abstract: 
We study the short-, medium-, and long-run implications of stimulating annuity markets in a dynamic general-equilibrium overlapping-generations model. We find that beneficial partial-equilibrium effects of stimulating annuity markets are counteracted by negative general-equilibrium repercussions. Balancing the positive partial-equilibrium and negative general-equilibrium forces we show that there exists some intermediate level of annuitization such that long-run welfare is maximized. Studying the transition to the optimal degree of annuitization shows that currently middle-aged individuals stand to gain most from the stimulation of annuity markets.
Subjects: 
individual welfare
annuity markets
computable general equilibrium
overlapping generations
JEL: 
C68
D91
J14
H55
Document Type: 
Working Paper

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