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Pensions in a shrinking economy: A comment on Kuné

Authors
  • Cesaratto, Sergio1
  • 1 Università di Siena, Dipartimento di Economia Politica e Statistica (DEPS), Piazza San Francesco 7, Siena, 53100, Italy , Siena (Italy)
Type
Published Article
Journal
Pensions: An International Journal
Publisher
Palgrave Macmillan UK
Publication Date
Feb 28, 2012
Volume
17
Issue
1
Pages
20–24
Identifiers
DOI: 10.1057/pm.2011.28
Source
Springer Nature
Keywords
License
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Abstract

In a contribution to this journal, Prof. Jan Kuné discusses whether a fully funded (FF) pension scheme can cope with a demographic shock better than a pay-as-you-go (PAYG) system. He makes ample use of my own contributions on this issue but ignores my criticism of the neoclassical interpretation of FF pension schemes, and especially of the claim that an FF scheme is superior to PAYG in this and other respects. The purpose of this note is to stimulate some response, from Prof. Kuné or others, to my critique of the neoclassical interpretation. The policy implications of this discussion for pension reforms are evident.

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