Should Generational Accounts Replace Public Budgets and Deficits?
AbstractThe author assesses the concept of 'generational accounts' and the specific accounts constructed by Alan Auerbach, Jagadeesh Gokhale, and Laurence Kotlikoff (1991). Although these accounts support the assertion of present-orientation in fiscal policy, they rest on numerous assumptions based on judgments that are open to question. These involve the treatment of the public budget constraint, the benefits from public exhaustive expenditures, economic and population projections, the discount rate, and fiscal incidence. Alternative and equally reasonable assumptions could yield radically different conclusions. The author concludes that the Auerbach, Gokhale, and Kotlikoff accounts should not replace the annual public budget, as they argue.
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Bibliographic InfoArticle provided by American Economic Association in its journal Journal of Economic Perspectives.
Volume (Year): 8 (1994)
Issue (Month): 1 (Winter)
Find related papers by JEL classification:
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Evans, Paul, 1987. "Interest Rates and Expected Future Budget Deficits in the United States," Journal of Political Economy, University of Chicago Press, vol. 95(1), pages 34-58, February.
- Hoelscher, Gregory, 1986. "New Evidence on Deficits and Interest Rates," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 18(1), pages 1-17, February.
- Poterba, James M. & Summers, Lawrence H., 1987.
"Finite lifetimes and the effects of budget deficits on national saving,"
Journal of Monetary Economics,
Elsevier, vol. 20(2), pages 369-391, September.
- James M. Poterba & Lawrence H. Summers, 1986. "Finite Lifetimes and the Effects of Budget Deficits on National Savings," Working papers 434, Massachusetts Institute of Technology (MIT), Department of Economics.
- Eisner, Robert, 1989. "Budget Deficits: Rhetoric and Reality," Journal of Economic Perspectives, American Economic Association, vol. 3(2), pages 73-93, Spring.
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