INTERGENERATIONAL TRANSFERS AND ECONOMIC-GROWTH WITH ALTERNATIVE BEQUEST MOTIVES

This paper investigates the effect of alternative bequest motives on e conomic growth when intentional bequests are crucial. We consider thre e motives: the altruistic bequest motive, the bequest-as-consumption m otive, and the bequest-as-exchange motive. It is shown that the long-r un effect on economic growth is qualitatively the same in all three al ternative intentional bequest motives. Namely, when the private discou nt rate is large, the growth rate is low. A public intergenerational t ransfer like a pay-as-you-go social security scheme will not necessari ly affect the long-run growth rate in afl three motives. However, the transitional and welfare effects of public intergenerational transfer will be different among the three cases of bequest motives. (C) 1994 A cademic Press, Inc.