%D 2015
%L eprints2951
%X In a standard two-period overlapping generations model, two symmetric countries are involved, each with a PAYG pension system. This paper investigates the effects of myopic saving behavior on the optimal pension policy and the capital accumulation under both non-cooperative and cooperative schemes. Both the cases when pension authority maximizes the welfare function with only the current welfare of the living generations (myopic authority) and when it maximizes the lifetime welfare of the living generations are considered (farsighted authority). International cooperation among national pension authorities boosts capital accumulation when the international authorities are myopic. Moreover, the welfare gain from cooperation decreases with the size of the myopic agents in the economy. When the pension authorities are farsighted, international cooperation not necessarily depresses capital accumulation. However, if there are enough myopic agents in the economy, international cooperation also boosts capital accumulation.
%A Xue Wen
%K Social Security, OLG model, Myopia, International Coordination
%T Myopic Behavior and International Social Security Coordination
%I IMT Institute for Advanced Studies Lucca