Altruism and the Poverty Risk in Old-Age

Blanchard's (1985) model is modified to build an OLG model with an increasing probability of death, endogenous growth and a bequest motive. The motivation is to obtain a more rich, realistic and flexible framework to reproduce - using numerical methods - some stylised facts of the age-profiles of education, consumption, and wealth variables. Moreover, this model can be used like Auerbach and Kotlikoff's (1987) to simulate the impact of economic shocks in the transition between steady states.