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Social Security and the Capital Stock Suppose that the government introduces a new social security program, which will make payments to people who are covered
Social Security and the Capital Stock Suppose that the government introduces a new social security program, which will make payments to people who are covered by the program when they retire. a) What long-run effects do yo predict on the capital stock, K? b) how does your answer to question (a) depend on whether the Social Security program is fully funded, or pay-as-you-go? (In a funded scheme, workers pay into a trust fund, which is then used to pay benefits. A pay-as-you-go system taxes current workers to pay benefits for current retirees.
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