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Social optimum in an OLG model with paternalistic altruism

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  • Marion Davin

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Karine Gente

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Carine Nourry

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

There is no consensus yet on the correct way to write the social utility function in the presence of paternalistic altruism. This note shows that the specification of the central planner objective is crucial for optimal capital accumulation and growth. When paternalistic altruism enters the social welfare function, we depart from the standard Modified Golden Rule. Capital intensity is no more determined by the equality between optimal returns on human and physical capital, and the optimal growth rate is higher when we consider altruism enters in the social welfare function. We calibrate the model for several countries and emphasize large differences on optimal growth rate, according to the specification of the social welfare function.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marion Davin & Karine Gente & Carine Nourry, 2012. "Social optimum in an OLG model with paternalistic altruism," Post-Print hal-01946300, HAL.
    • Handle: RePEc:hal:journl:hal-01946300
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    References listed on IDEAS

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    1. Helmuth Cremer & Pierre Pestieau, 2006. "Intergenerational Transfer of Human Capital and Optimal Education Policy," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 8(4), pages 529-545, October.
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    Cited by:

    1. Marion Davin & Karine Gente & Carine Nourry, 2013. "Should a Country Invest more in Human or Physical Capital? A Two-Sector Endogenous Growth Approach," AMSE Working Papers 1330, Aix-Marseille School of Economics, France, revised May 2013.
    2. Davin, Marion & Gente, Karine & Nourry, Carine, 2015. "Should a country invest more in human or physical capital?," Mathematical Social Sciences, Elsevier, vol. 76(C), pages 44-52.
    3. Oliwia Komada, 2015. "Children as a public good in PAYG pension system," Ekonomia journal, Faculty of Economic Sciences, University of Warsaw, vol. 43.

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    JEL classification:

    • B4 - Schools of Economic Thought and Methodology - - Economic Methodology
    • A1 - General Economics and Teaching - - General Economics

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