This issue features two research articles, three issues & policy articles and a book review section. The first article in the issue is by Berthold Wigger (University of Erlangen-Nuremberg). Wigger's article, “Public Pensions and the Role of Real versus Financial Capital”, revisits the Diamond (1965) model in light of the imperfect markets framework of Magill and Quinzii (2003). Whereas in Diamond (1965), the introduction of a social security system can make a transition generation better off, Wigger derives an equilibrium in imperfect markets in which the outcome is different. The essential difference is that in Diamond's model capital can be changed into consumption goods whereas in the Magill and Quinzii (2003) framework the investment in capital goods such as their housing is irreversible. Though the old benefit from the introduction of social security, the value of their capital goods declines. Hence, the abnormal gains observed by transition generations in social security may be offset elsewhere. This is a potentially relevant result for the US social security debate in which a key focus is how to allocate the legacy burden of social security.