Quantifying Impact of Aging Population on Fiscal Space
AbstractThis paper quantitatively investigates how population aging trend affects fiscal space measured as unused revenue generating capacity by utilizing a standard neoclassical growth model. A calibration exercise for G-7 countries shows that France, Germany and Italy suffer greater revenue impact from a given reduction in hours worked due to their larger government expenditure. Corrective measures such as pension reform and flexible expenditure policy would be required in order to mitigate the impact of aging on fiscal space.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 12/164.
Date of creation: 01 Jun 2012
Date of revision:
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This paper has been announced in the following NEP Reports:
- NEP-AGE-2012-08-23 (Economics of Ageing)
- NEP-ALL-2012-08-23 (All new papers)
- NEP-DEM-2012-08-23 (Demographic Economics)
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