The consequences of interfamily bequests and endogenous population size for optimal and competitive population sizes and bequests are explored when individuals' utility is a function of own consumption, the number of children, and the welfare of their children. When a bequest benefits each member of a second-generation family, we show that competition leads to underprovision for future generations. Under a separability assumption, the number of children is also shown to be too large.

[The implications for efficient allocation of parents' inability to force transfers among siblings are explored. When there are differences in abilities of children within families, such transfers may be necessary to achieve a first-best solution. In the absence of such transfers, a tax on earned income and a subsidy to inheritance are useful second-best tools, whereas subsidies to investments in human capital or physical capital are not desirable.]

In this paper we analyze the determinants of international movements of physical capital in a model with uncertainty and international trade in goods and securities. In our model, the world allocation of capital is governed, to some extent, by the asset preferences of risk-averse consumer-investors. In a one-good variant in the spirit of the MacDougall model, we find that relative factor abundance, relative labor force size, and relative production riskiness have separate but interrelated influences on the direction of equilibrium capital movements. These same factors remain important in a two-good version with Heckscher-Ohlin production structure. In this case, the direction of physical capital flow is determinate (unlike in a world of certainty) and may hinge on the identity of the factor that is used intensively in the industry with random technology.

The consequences of interfamily bequests and endogenous population size for optimal and competitive population sizes and bequests are explored when individuals' utility is a function of own consumption, the number of children, and the welfare of their children. When a bequest benefits each member of a second-generation family, we show that competition leads to underprovision for future generations. Under a separability assumption, the number of children is also shown to be too large.