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Generational Accounting - Quo Vadis?

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  • Bernd Raffelhüschen

Abstract

This paper focuses on the problems involved in developing cross-country comparisons of the intergenerational stance of fiscal policy. Of course, these comparisons are nowadays based on the method of generational accounting and in particular most of them rely on comparing the total size of intertemporal public liabilities (IPLs). I first utilize the machinery of generational accounting in order to calculate the composition of the countries` IPLs, that is the sum of explicit and implicit liabilities embedded in the respective fiscal policies for several European countries and the United States. The findings suggest that the ranking in a cross-country comparison is very sensitive to a) the legal settings concerning social transfer adjustment over time, b) the degree to which unreliable or time-inconsistent reforms are taken into account, c) the respective countries` business cycle status in the base-year. The second aim of this paper is to outline recent and future applications of generational accounting.

Suggested Citation

  • Bernd Raffelhüschen, 2002. "Generational Accounting - Quo Vadis?," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 28, pages 75-89.
    • Handle: RePEc:noj:journl:v:28:y:2002:p:75-89
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    1. Auerbach, Alan J & Gokhale, Jagadeesh & Kotlikoff, Laurence J, 1992. " Generational Accounting: A New Approach to Understanding the Effects of Fiscal Policy on Saving," Scandinavian Journal of Economics, Wiley Blackwell, vol. 94(2), pages 303-318.
    2. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
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    More about this item

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H6 - Public Economics - - National Budget, Deficit, and Debt
    • J1 - Labor and Demographic Economics - - Demographic Economics

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