Investment, consumption, or public good? Unpaid work and intra-family transfers in the macro-economy

This paper outlines some preliminary steps toward a more satisfactory integration of family and market dynamics. We begin with a broad overview of conceptual inconsistencies in conventional neoclassical models. Next, we outline several distinctive characteristics of the family economy that deserve consideration. We use this outline to develop a critical assessment of three very different types of models: accounting frameworks (including social accounting matrices), neoclassical growth models that assume joint utility (which typically generate socially optimal outcomes), and neoclassical growth models that problematize family decision making between the generations, often dubbed overlapping generation models. We argue that overlapping generation models provide at least some conceptual leverage for more satisfactory models, and, in our conclusion, we outline some ways in which they could be extended.