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Generational Accounts in the Czech Republic (in English)

Author

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  • Kamil Dybczak

    (Czech National Bank, Prague)

Abstract

The generational accounting approach used in this paper incorporates projected demographic development and the parameters of current Czech fiscal policy into an intertemporal government budget constraint. Compared with public-debt and deficit data, the economic indicators based on generational accounting are forward looking and yield additional information about fiscal policy. To assess the sustainability of Czech public budgets, the authors constructed the first set of generational accounts for the Czech Republic. They found that, for 2004, a representative agent obtained more benefits than paid taxes; that is, the generational account of the representative agent was negative. In addition, the total amount of government liabilities resulting from the current fiscal policy, projected to 2150, was estimated at about 300 percent of the national GDP in 2004. The authors conclude that Czech fiscal policy is not sustainable; current taxes and benefits should be modified in line with demographic projections in an effort to stabilize public budgets.

Suggested Citation

  • 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.
  • Handle: RePEc:fau:fauart:v:56:y:2006:i:7-8:p:298-317
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    References listed on IDEAS

    as
    1. Bonin, Holger & Patxot, Concepció, 2004. "Generational Accounting as a Tool to Assess Fiscal Sustainability: An Overview of the Methodology," IZA Discussion Papers 990, Institute of Labor Economics (IZA).
    2. 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.
    3. Kotlikoff, Laurence J., 2002. "Generational policy," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 27, pages 1873-1932, Elsevier.
    4. Alan J. Auerbach & Laurence J. Kotlikoff & Willi Leibfritz, 1999. "Generational Accounting around the World," NBER Books, National Bureau of Economic Research, Inc, number auer99-1, January.
    5. Vladimir Bezdek & Kamil Dybczak & Ales Krejdl, 2003. "Czech Fiscal Policy: Introductory Analysis," Working Papers 2003/07, Czech National Bank.
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    1. Ambriško, Róbert & Babecký, Jan & Ryšánek, Jakub & Valenta, Vilém, 2015. "Assessing the impact of fiscal measures on the Czech economy," Economic Modelling, Elsevier, vol. 44(C), pages 350-357.

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    More about this item

    Keywords

    fiscal sustainability; generational accounting;

    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; Modern Monetary Theory

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