Public Saving and Policy Coordination in Ageing Economies
AbstractIn the coming decades, the share of people in working age will fall significantly in most developed countries. According to optimal taxation theory, public debts should be reduced before the baby-boom generation retires. I find that if debts are instead maintained at the current levels, welfare may be reduced substantially in countries with a large public sector and/or a large demographic change. Furthermore, since the population ageing will be less dramatic in the United States than in Europe, capital will move from Europe to the United States. These capital movements will facilitate the US demographic transition but aggravate the transition in most European countries.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3567.
Date of creation: Oct 2002
Date of revision:
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Other versions of this item:
- Martin FlodÈn, 2003. "Public Saving and Policy Coordination in Aging Economies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(3), pages 379-400, 09.
- Martin Floden, 2002. "Matlab code for Public saving and policy coordination in aging economies," QM&RBC Codes 56, Quantitative Macroeconomics & Real Business Cycles.
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-03-14 (All new papers)
- NEP-DGE-2003-03-14 (Dynamic General Equilibrium)
- NEP-IFN-2003-03-14 (International Finance)
- NEP-MAC-2003-03-17 (Macroeconomics)
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