Yamada Tomoaki
Department Undergraduate School , School of Commerce Position Professor |
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Language | English |
Publication Date | 2010/02 |
Type | Academic Journal |
Peer Review | Peer reviewed |
Title | On the Intergenerational Sharing of Cohort-Specific Shocks on Permanent Income |
Contribution Type | Co-authored (other than first author) |
Journal | Macroeconomic Dynamics |
Volume, Issue, Page | 14(1),pp.93-118 |
Author and coauthor | Kenji Miyazaki, Makoto Saito |
Details | This paper investigates the intergenerational sharing of shocks on the permanent income of new entry cohorts when prior-to-entry markets are missing. When Lucas trees are traded among generations, procyclical cohort-specific shocks are shared partially via the movement of asset prices; cohorts with lower endowments may benefit more from asset pricing dynamics than cohorts with higher endowments. Given a reasonable set of parameters concerning the Japanese labor market, the evaluated welfare loss ranges from 1% to 3% in terms of the certainty equivalence consumption level. The first-best outcome may be achieved by either a combination of subsidies and taxes or the introduction of prior-to-entry markets. |
DOI | 10.1017/S1365100509090014 |