Cross-Dynastic Intergenerational Altruism

Frikk Nesje

No 9626, CESifo Working Paper Series from CESifo

Abstract: I study whether saving behavior reveals socially relevant intertemporal preferences. To this end, I decompose the present generation’s preference for the next into its dynastic and cross-dynastic components in a model of saving. If people are concerned about the next generation as such, then they might assign welfare weights on other dynasties. With such cross-dynastic intergenerational altruism, saving for one’s descendants benefits present members of other dynasties. These preference externalities imply that socially relevant intertemporal preferences cannot be inferred from saving behavior. Numerically, I show that even \small" preferences for the next generation as such can lower the efficient discount rate by 20% to 40%, as compared to Nordhaus’ calibration.

Keywords: intergenerational altruism; social discounting; time-inconsistency; declining discount rates; generalized consumption Euler equations; interdependent utility; isolation paradox (search for similar items in EconPapers)
JEL-codes: D64 D71 H43 Q01 Q54 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-upt
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Cross-dynastic intergenerational altruism (2024)
Working Paper: Cross-Dynastic Intergenerational Altruism (2021)
Working Paper: Cross-dynastic Intergenerational Altruism (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9626

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