Generational Accounting as a Tool to Assess Fiscal Sustainability: An Overview of the Methodology
AbstractThe paper surveys the methodology of generational accounting, a tool for gauging intertemporal imbalance in government finances facing demographic transition. Starting from the fiscal balance rule providing the theoretical background, we review the methods of generational accountants for generating empirical projections of the items building up to the intertemporal government budget. We debate indication of generational redistribution by lifetime expected net tax payments and several indicators for fiscal sustainability found in the literature. Finally, the performance of generational accounts, which ignore behavioral and policy dynamics, is compared with that of generational welfare indicators based on overlapping generations general equilibrium models.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 990.
Length: 45 pages
Date of creation: Jan 2004
Date of revision:
Publication status: published in: E. Berenguer (ed.), Generational Accounting in Spain, Madrid: IFS, 2005, 27-66
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Find related papers by JEL classification:
- H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
- E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-02-08 (All new papers)
- NEP-PBE-2004-02-08 (Public Economics)
- NEP-PUB-2004-02-15 (Public Finance)
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.:
- 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.
- Kotlikoff, Laurence J, 1988.
"Intergenerational Transfers and Savings,"
Journal of Economic Perspectives,
American Economic Association, vol. 2(2), pages 41-58, Spring.
- Kamil Dybczak, 2006. "Generational Accounts in the Czech Republic," Working Papers 2006/2, Czech National Bank, Research Department.
- Damla Haciibrahimoglu & Pinar Derin-Gure, 2013. "Generational Accounting in Turkey," ERC Working Papers 1301, ERC - Economic Research Center, Middle East Technical University, revised Jan 2013.
- Kamil Dybczak, 2006. "Generational Accounts in the Czech Republic (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 56(7-8), pages 298-317, July.
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