Pensions: What Solidarity between Generations?
By Gérard-François Dumont (University of Paris 4 Sorbonne)
To understand the fact that solidarity between generations is essential for pensions, Gérard-François Dumont presents a parable inspired by the story of Robinson Crusoe. It shows that it is always the case that assets reduce their purchasing power to release payments to pensioners, whether they are in a distribution or capitalization system. According to the author, “capitalization is a system of financial distribution; Distribution is a system of human capitalization”.
Full Content: SSRN
