Comments on Cesaratto's 'Transition to fully funded pension schemes: a non-orthodox criticism'

Michl, Thomas R.
November 2006
Cambridge Journal of Economics;Nov2006, Vol. 30 Issue 6, p981
Academic Journal
Cesaratto's critique of the neoclassical approach to pension reform is valuable, but he has overextended his argument in applying it to proposals to use pre-funding as a mechanism for achieving greater public ownership and for redistributing wealth progressively. The fiscal surpluses needed to pre-fund the public pension system could increase investment, provided that they are offset by an appropriately stimulating monetary policy. The post-Keynesian investment literature descending from Kalecki's principle of increasing risk motivates on non-neoclassical grounds the interest sensitivity of investment required to make this policy mix effective.


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