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Sinn, Hans-Werner (1999): The Crisis of Germany’s Pension Insurance System and How It Can Be Resolved. Discussion Paper / Centre for Economic Policy Research (CEPR), 2175
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The paper discusses the options for a reform of the German pension system using a model developed at CES for the German Council of economic advisors to the Federal Ministry of Economics and Research. It is argued that the German pay-as-you-go-system is efficient in a present value sense but will nevertheless need the support of a funded system to avoid a financial crisis. The paper recommends obligatory private savings at a variable rate where the time path of the savings rate is chosen so as to stabilize the sum of this rate and the pay-as-you-go contribution rate, given the time path of pensions as defined in the present system. ; Germany; Pay-As-You-Go System; Pension Insurance; Savings