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The 'principle of scarcity', pension policy and growth

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  • Massimo Pivetti

Abstract

The picture one is bound to form of the whole question of pensions depends on whether one views it through the lens of the 'principle of scarcity' or through that of the 'principle of the underutilisation of productive resources in a market economy.' A generous PAYG system of the defined-benefit type is here defended as the best retirement system one can conceive of in light of the principle of underutilised resources. The nature of the main obstacles that the implementation of such a system is likely to encounter in the present set of historical conditions is outlined in the final part of the paper.

Suggested Citation

  • Massimo Pivetti, 2006. "The 'principle of scarcity', pension policy and growth," Review of Political Economy, Taylor & Francis Journals, vol. 18(3), pages 379-390.
    • Handle: RePEc:taf:revpoe:v:18:y:2006:i:3:p:379-390
    DOI: 10.1080/09538250600797875
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    References listed on IDEAS

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    1. Sergio Cesaratto, 2005. "Pension Reform and Economic Theory," Books, Edward Elgar Publishing, number 2081.
    2. Martin Feldstein, 2005. "Rethinking Social Insurance," American Economic Review, American Economic Association, vol. 95(1), pages 1-24, March.
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    4. Massimo Pivetti, 1998. "Monetary versus Political Unification in Europe. On Maastricht as an exercise in 'vulgar' political economy," Review of Political Economy, Taylor & Francis Journals, vol. 10(1), pages 5-26.
    5. Feldstein, Martin S, 1974. "Social Security, Induced Retirement, and Aggregate Capital Accumulation," Journal of Political Economy, University of Chicago Press, vol. 82(5), pages 905-926, Sept./Oct.
    6. Peter A. Diamond & Peter R. Orszag, 2005. "Saving Social Security," Journal of Economic Perspectives, American Economic Association, vol. 19(2), pages 11-32, Spring.
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