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An economic analysis of the interplay between intra- and intergenerational altruism


The proposed research concerns the problem of intertwined preferences and more specifically addresses the following question: what are the consequences of the interplay between intergenerational altruism, i.e. altruistic concern for offspring, and intragenerational altruism, i.e. altruistic concern for contemporaries, within an intertemporal equilibrium framework such as an overlapping generations model? To what kind of economic situations does this theoretical approach apply? The situation I have in mind is that of two economies whose growth process is mainly driven by dynastic altruism but which are also altruistic toward each other. For instance, it may well be the case that citizens of each member state of an economic union such as the European Community, have concern for the well-being of their offspring (which may be interpreted as a concern for the future of their nation) but also for the welfare of citizens of other member states so that international redistribution is driven by altruism. The rich are willing to help the poor at least to a certain extent. But private transfers may lead to inefficiencies due to strategic interactions. Thus, there is a case for a federal redistributive policy.

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University of Cambridge
Sidgwick Avenue
CB3 9DE Cambridge
United Kingdom

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