JOURNAL OF POLITICAL ECONOMY The results in this section have demonstrated that changes in govern ment debt would not induce any alteration in consumption plans even in a model where(1)the present generations have finite lives,(2) the present generations may, in some sense, give lesser weight to the consumption or lity of future generations than they give to own consumption, and (3)the present generation may give no direct weight at all to the con- mption or utility of generations beyond their immediate descendants (who are also finite-lived) A sufficient condition for changes in government debt to have no impact on consumption plans and, hence, no effect on aggregate demand and interest rates is that the solution for the current generations'inheritances be interior, and that the solutions for future generations' inheritances(as perceived by current generations) also be interior. More generally, the result will hold as long as current generations are connected to all future generations by a chain of operative intergenerational transfers, either in the direction from old to young or in the direction from young to old The derivation of conditions under which the solution for inter- generational transfer would be interior appears to be a difficult problem ind would seem to require some specialization of the form of the utility functions in order to make any headway. However, it seems clear that bequests are more likely to be positive the smaller the growth rate of we assuming that w is now viewed as variable across generations), the higher the interest rate, the higher the relative weight of Ui+i in the Ui function, and the larger the value of B. 3 The reverse conditions favor a It from young to old C. Social Security Payments and Other Imposed Intergenerational Transfers The above results on government debt also apply to social security pay. ments. Suppose that a scheme is instituted which immediately begins payments to the current old generation (generation 1)of amount S, financed by a lump-sum tax levy of amount s on the current young 13 In a more general context B should be viewed as outstanding public debt less the There is an alternative argument, which Gary Becker refers to as the"enforcement theory of giving, which suggests that bequest motives would typically be operati Suppose that, instead of receiving utility from the perceived utility of his child, a parent hild during their overlapping tenure. Suppose, further, that the child has some in- ormation on the size ofhis parents'estate and that-acting as a good optimal controller he regulates the amount of attention as a function of the estate size. In this situation the previous conclusions about the marginal effect of Bed in this fashion, e estate is zer mount of attention, and if the child provides no attention consumption hold in this model. The nature of the interactions between parents al s The view of social security as analogous to government debt has also been taken by Miller and Upton(1974, pp. 182-84)