How to Pay for the Crisis or Macroeconomic implications of pension reform
AbstractThe national debt stock of the UK is rising sharply as a result of the economic crisis, and equilibrium output is falling, with the capital stock contracting. Both problems could be alleviated by the rapid introduction (but slow implementation) of a policy to extend working lives. The paper analyses a delayed extension of working lives in the UK. A distinction is drawn between the impacts of these changes on output (GDP) and income (GNP) in open economies with capital mobility. Increasing working lives will in equilibrium raise consumption and tax revenues and reduce pension spending. These gains by the government can be used to improve services, cut taxes or pay off debts.
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Bibliographic InfoPaper provided by National Institute of Economic and Social Research in its series NIESR Discussion Papers with number 333.
Date of creation: May 2009
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This paper has been announced in the following NEP Reports:
- NEP-AGE-2010-04-04 (Economics of Ageing)
- NEP-ALL-2010-04-04 (All new papers)
- NEP-MAC-2010-04-04 (Macroeconomics)
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