Welfare Implications of Uncertain Social Security Reform
Keyword(s):
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.
2018 ◽
Vol 23
(8)
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pp. 3140-3162
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2015 ◽
Vol 22
(4)
◽
pp. 579-603
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2016 ◽
Vol 15
(1)
◽
pp. 159-181
Keyword(s):