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Future-biased government

Author

Listed:
  • Francisco M. Gonzalez

    (Department of Economics, University of Waterloo)

  • Itziar Lazkano

    (University of Wisconsin-Milwaukee)

  • Sjak A. Smulders

    (Tilburg University)

Abstract
We argue that governments are future biased when they aggregate the preferences of overlapping generations. Future bias, which involves preference reversals favoring future over current consumption, explains why governments legislate old-age transfers at the expense of capital accumulation and growth, even if generations are altruistic.

Suggested Citation

  • Francisco M. Gonzalez & Itziar Lazkano & Sjak A. Smulders, 2015. "Future-biased government," Working Papers 1502, University of Waterloo, Department of Economics, revised Oct 2015.
    • Handle: RePEc:wat:wpaper:1502
    as

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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions

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