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Previous research suggests that, in partial equilibrium,
individuals whose decision-making exhibits a present-bias--such as
hyperbolic discounters who tend to over-consume--will be in favor
of having a floor imposed on their savings. In this paper, I show
it is quite difficult for the introduction of a savings floor to be
Pareto-improving in general equilibrium. Indeed, a necessary
condition for the floor to be Pareto-improving is that it is high
enough to be binding for all individuals. Even in that case,
because the equilibrium interest rate is affected by the level of
the savings floor, some individuals may prefer to commit to a
future time path of consumption by facing a high interest rate (and
no floor) rather than a high floor.
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