Under dynamic efficiency, a pay-as-you-go (PAYG) pension scheme helps the current generation of retirees but hurts future generations because they are forced to save via a return-dominated scheme. Abandoning it is deemed welfare-improving but typically not for all generations. But what if agents are present-biased (hence, undersave for retirement) and the “paternalistically motivated forced savings” component of a PAYG scheme motivated its existence in the first place? This paper shows it is possible to transition from such a PAYG scheme on to a higher return, mandated fully-funded scheme; yet, no generation is hurt in the process. The results inform the debate on policy design of pension systems as more and more policy makers push for the transition to take place but are forced to recognize that current retirees may get hurt along the way.

This paper studies the evolution of wealth inequality in an economy with endogenous borrowing constraints. In the model economy, young agents need to borrow to finance human capital investments but cannot commit to repaying their loans. Creditors can punish defaulters by banishing them permanently from the credit market. At equilibrium, loan default is prevented by imposing a borrowing limit tied to the borrower's inheritance. The heterogeneity in inheritances translates into heterogeneity in borrowing limits: endogenously, some borrowers face a zero borrowing limit, and some are partly constrained, whereas others are unconstrained. Depending on the initial distribution of inheritances, it is possible that all lineages are attracted either to the zero-borrowing-limit steady state or to the unconstrained-borrowing steady state—long-run equality. It is also possible that some lineages end up in one steady state and the rest in the other—complete polarization.

Red and near-infrared photons of longer wave lengths are poorly absorbed in thin film silicon cells and advanced light trapping methods are necessary. The physical mechanisms underlying the light trapping using periodic back reflectors are strong light diffraction, coupled with plasmonic light concentration. These are contrasted with the scattering mechanisms in randomly textured back reflectors. We describe a class of conformal solar cells with nanocone back reflectors with absorption at the Lambertian 4n2 limit, averaged over the “entire” wave length range for hydrogenated nanocrystalline silicon (nc-Si:H) thin-film solar cells. The absorption is theoretically found for 1-μm nc-Si:H cells, and is further enhanced for off-normal incidence. Predicted currents exceed 31 mA/cm2. Nc-Si:H solar cells with the same device architecture were conformally grown on periodic substrates and compared with randomly textured substrates. The periodic back reflector solar cells with nanopillars demonstrated higher quantum efficiency and photocurrents that were 1 mA/cm2 higher than those for the randomly textured back reflectors.

A classic result in dynamic public economics states that there is no welfare rationale for pay-as-you-go (PAYG) pensions in a dynamically efficient overlapping-generations economy with exogenous labor supply. Parenthetically, a welfare justification for PAYG pensions exists if the economy is dynamically inefficient. Under the sufficient condition that the old be no less risk-averse than the young, both these results extend to an economy with endogenous labor supply.

Long wavelength photons in the red and near infrared region of the spectrum are poorly absorbed in thin film silicon cells, due to their long absorption lengths. Advanced light trapping methods are necessary to harvest these photons. The basic physical mechanisms underlying the enhanced light trapping in thin film solar cells using periodic back reflectors include strong diffraction coupled with light concentration. These will be contrasted with the scattering mechanisms involved in randomly textured back reflectors, which are commonly used for light trapping. A special class of conformal solar cells with plasmonic nano-pillar back reflectors will be described, that generates absorption beyond the classical 4n2 limit (the Lambertian limit) averaged over the entire wavelength range for nc-Si:H. The absorption beyond the classical limit exists for common 1 micron thick nc-Si:H cells, and is further enhanced for non-normal light. Predicted currents exceed 31 mA/cm2 for nc-Si:H. The nano-pillars are tapered into conical protrusions that enhance plasmonic effects. Such conformal nc-Si:H solar cells with the same device architecture were grown on periodic nano-hole, periodic nano-pillar substrates and compared with randomly textured substrates, formed by annealing Ag/ZnO or etched Ag/ZnO. The periodic back reflector solar cells with nano-pillars demonstrated higher quantum efficiency and higher photo-currents that were 1 mA/cm2higher than those for the randomly textured back reflectors. Losses within the experimental solar architectures are discussed.

In this paper, we study a decentralized monetary economy with a specified set of markets, rules of trade, an equilibrium concept, and a restricted set of policies and derive a set of equilibrium (monetary) allocations generated by these policies. Next we set up a simpler constrained planning problem in which we restrict the planner to choose from a set that contains the set of equilibrium allocations in the decentralized economy. If there is a government policy that allows the decentralized economy to achieve the constrained planner's allocation, then it is the optimal policy choice. To illustrate the power of such analyses, we solve such planning problems in three monetary environments with limited communication. The upshot is that solving constrained planning problems is potentially an extremely “efficient” (easy and quick) way of deriving optimal policies for the corresponding decentralized economies.

This paper clarifies and extends previous work on the equivalence between monetary regimes and fiscal regimes involving social security systems. We show that monetary regimes of the type we study are equivalent to two alternative types of social security regimes. This result has an important implication. Notably, governments can finance a real expenditure by increasing the inflation rate, or finance the expenditure by increasing the tax rate on social security benefits. Such equivalence should help us better understand the role that monetary policy plays in these economies.This research was begun while Russell was visiting Iowa State University. We gratefully acknowledge helpful conversations with Scott Freeman and Peter Rangazas, and comments from participants at the Midwest Macroeconomics Meetings in Atlanta. The views expressed herein do not necessarily represent the views of the Board of Governors of the Federal Reserve System or the Federal Reserve Bank of Kansas City.