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Economies 2018, 6(2), 21; https://doi.org/10.3390/economies6020021

Money and Pay-As-You-Go Pension

School of Economics, Kwansei Gakuin University, Nishinomiya 6628501, Hyogo, Japan
Received: 16 October 2017 / Revised: 19 March 2018 / Accepted: 22 March 2018 / Published: 29 March 2018
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Abstract

This paper presents examination of how a pension policy affects income growth and the inflation rate in a utility model. Even if the contribution rate of pension increases because of an aging society, an aging society increases income growth and the inflation rate. Moreover, this paper presents examination of the optimal growth rate of the money supply. Because of the pension policy, the optimal growth rate of money stock changes. This result is intuitive because a pay-as-you-go pension changes capital accumulation. Therefore, the income growth rate should be changed to raise the welfare of all generations. View Full-Text
Keywords: income growth; pay-as-you-go pension; monetary policy; fewer children income growth; pay-as-you-go pension; monetary policy; fewer children
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Yasuoka, M. Money and Pay-As-You-Go Pension. Economies 2018, 6, 21.

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