Fiscal prefunding in response to demographic uncertainty
AbstractUncertainty in demographic developments lowers expected future welfare levels. Increasing current tax rates and decreasing expected future tax rates may compensate part of the welfare loss that is due to demographic uncertainty. In doing so, the government effectively pursues a precautionary fiscal policy analogous to the precautionary life-cycle saving behaviour that households may exhibit in the presence of income uncertainty.
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Discussion Paper with number 85.
Date of creation: Jul 2007
Date of revision:
Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-27 (All new papers)
- NEP-PBE-2007-08-27 (Public Economics)
- NEP-PUB-2007-08-27 (Public Finance)
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