The elasticity of intergenerational substitution, parental altruism, and fertility choiceEconomics Working Papers (2002–2016)
Document TypeWorking Paper
Working Paper NumberWP #14016, August 2014
AbstractDynastic models common in macroeconomics use a single parameter to control the willingness of individuals to substitute consumption both intertemporally, or across periods, and intergenerationally, or across parents and their children. This paper defines the concept of Elasticity of Intergenerational Substitution (EGS), and extends a standard dynastic model in order to disentangle the EGS from the EIS, or Elasticity of Intertemporal Substitution. A calibrated version of the model lends strong support to the notion that the EGS is significantly large than 1, and probably around 2.5. In contrast, estimates of the EIS suggests that it is lower than 1. What disciplines the identification is the need to match empirically plausible fertility rates for the U.S.
File FunctionTitle page lists as WP #14015, in all databases as WP #14016
Citation InformationJuan Carlos Cordoba and Marla Ripoll. "The elasticity of intergenerational substitution, parental altruism, and fertility choice" (2014)
Available at: http://works.bepress.com/juancarlos-cordoba/2/