This paper concentrates on the primary theme of FOR THE MYOPIA MODEL, ASSUME A PAY-AS-YOU-GO PENSION SYSTEM. THE CONSUMERS OVERESTIMATE THE… in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.
For the myopia model, assume a pay-as-you-go pension system. The consumers overestimate the generosity of the pension scheme and believe that the pension, ß, and the social security tax, τ, are related by ß = (1 + φ)τ, where φ > 0. There is no population growth, so the true value of the pension is ß = τ. What effect does an increase in f have on savings? Does welfare increase or decrease in φ? Should we have the social security program when consumers have this from of myopia?