Consider the above-described olg economy

Reference no: EM131136012

Prove Proposition 9.8.

Proposition 9.8

Consider the above-described OLG economy and suppose that the decentralized competitive equilibrium is dynamically inefficient. Then there exists a feasible sequence of unfunded social security payments

that leads to a competitive equilibrium starting from any date t that Pareto dominates the competitive equilibrium without social security.

Reference no: EM131136012

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