IDEAS home Printed from https://ideas.repec.org/b/ces/ifofob/64.html

Sustainability of Public Finances in Germany: Simulations for the Medium and Long Run

Author

Listed:
  • Martin Werding
  • Christoph Schinke

Abstract

This report was prepared by Martin Werding, Ruhr-Universität Bochum, in cooperation with the Ifo Institute and on behalf of the Federal Ministry of Finance. It provides updated results regarding long-term trends in public expenditure to show the potential dimension of future budgetary risks. The simulations relate to public expenditure in those areas which must be expected to be particularly responsive to population ageing. The legal framework is that effective on January 1, 2013. According to the S2 indicator, the sustainability gap amounts to about 0.6 percent of GDP in the optimistic scenario and to about 3.1 percent of GDP in the pessimistic scenario. Many other indicators and results for alternative scenarios are computed.

Suggested Citation

  • Martin Werding & Christoph Schinke, 2014. "Sustainability of Public Finances in Germany: Simulations for the Medium and Long Run," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 64.
    • Handle: RePEc:ces:ifofob:64
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/ifo_Forschungsberichte_64.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Fuchs, Johann & Weber, Brigitte, 2005. "Neuschätzung der Stillen Reserve und des Erwerbspersonenpotenzials für Ostdeutschland (einschl. Berlin-Ost)," IAB-Forschungsbericht 200518, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    3. Fuchs, Johann & Weber, Brigitte, 2005. "Neuschätzung der Stillen Reserve und des Erwerbspersonenpotenzials für Westdeutschland (inkl. Berlin-West)," IAB-Forschungsbericht 200515, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Martin Werding & Herbert Hofmann, 2008. "Projections Regarding the Long-term Sustainability of Public Finances," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 30.
    5. Werding, Martin, 2011. "Demographie und öffentliche Haushalte: Simulationen zur langfristigen Tragfähigkeit der gesamtstaatlichen Finanzpolitik in Deutschland," Working Papers 03/2011, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    6. Willi Leibfritz & Deborah Roseveare & Douglas Fore & Eckhard Wurzel, 1995. "Ageing Populations, Pension Systems and Government Budgets: How Do They Affect Saving?," OECD Economics Department Working Papers 156, OECD Publishing.
    7. T. W. Swan, 1956. "ECONOMIC GROWTH and CAPITAL ACCUMULATION," The Economic Record, The Economic Society of Australia, vol. 32(2), pages 334-361, November.
    8. Projektgruppe Gemeinschaftsdiagnose, 2013. "Gemeinschaftsdiagnose Herbst 2013," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 80(43), pages 3-77.
    9. Deborah Roseveare & Willi Leibfritz & Douglas Fore & Eckhard Wurzel, 1996. "Ageing Populations, Pension Systems and Government Budgets: Simulations for 20 OECD Countries," OECD Economics Department Working Papers 168, OECD Publishing.
    10. Martin Werding & Anita Dehne, 2005. "Modellrechnungen zur langfristigen Tragfähigkeit der öffentlichen Finanzen," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 17.
    11. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2005. "Productivity, Volume 3: Information Technology and the American Growth Resurgence," MIT Press Books, The MIT Press, edition 1, volume 3, number 0262101114, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Werding, Martin, 2014. "Demographischer Wandel und öffentliche Finanzen: Langfrist-Projektionen 2014-2060 unter besonderer Berücksichtigung des Rentenreform-Pakets der Bundesregierung," Working Papers 01/2014, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    2. Raddatz, Guido, 2015. "Mehr Arbeit wagen," Argumente zur Marktwirtschaft und Politik 129, Stiftung Marktwirtschaft / The Market Economy Foundation, Berlin.
    3. Werding, Martin, 2016. "Modellrechnungen für den vierten Tragfähigkeitsbericht des BMF [Simulations for the 4th Sustainability Report]," FiFo Reports - FiFo-Berichte 20, University of Cologne, FiFo Institute for Public Economics.
    4. Martin Werding & Klaus Gründler & Benjamin Läpple & Robert Lehmann & Martin Mosler & Niklas Potrafke, 2020. "Tragfähigkeit der öffentlichen Finanzen: Spielt sie noch eine Rolle?," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(09), pages 53-58, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Martin Werding & Timo Hener, 2011. "Langfristige Tragfähigkeit der öffentlichen Finanzen: Modellrechnungen bis 2060 ; Studie im Auftrag des Bundesministeriums der Finanzen," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 53.
    2. Werding, Martin, 2014. "Demographischer Wandel und öffentliche Finanzen: Langfrist-Projektionen 2014-2060 unter besonderer Berücksichtigung des Rentenreform-Pakets der Bundesregierung," Working Papers 01/2014, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    3. Werding, Martin, 2011. "Demographie und öffentliche Haushalte: Simulationen zur langfristigen Tragfähigkeit der gesamtstaatlichen Finanzpolitik in Deutschland," Working Papers 03/2011, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung.
    4. Rod Tyers & Iain Bain & Jahnvi Vedi, 2007. "The Global Economic Implications of Freer Skilled Migration," DEGIT Conference Papers c012_028, DEGIT, Dynamics, Economic Growth, and International Trade.
    5. Werding, Martin, 2016. "Modellrechnungen für den vierten Tragfähigkeitsbericht des BMF [Simulations for the 4th Sustainability Report]," FiFo Reports - FiFo-Berichte 20, University of Cologne, FiFo Institute for Public Economics.
    6. Rod Tyers & Iain Bain & Jahnvi Vedi, 2006. "The global implications of freer skilled migration," PGDA Working Papers 1006, Program on the Global Demography of Aging.
    7. Young Eun Kim & Norman V. Loayza, 2019. "Productivity Growth: Patterns and Determinants across the World," Revista Economía, Fondo Editorial - Pontificia Universidad Católica del Perú, vol. 42(84), pages 36-93.
    8. João Juchem Neto & Julio Claeyssen, 2015. "Capital-induced labor migration in a spatial Solow model," Journal of Economics, Springer, vol. 115(1), pages 25-47, May.
    9. Zhongwei Xing, 2018. "The impacts of Information and Communications Technology (ICT) and E-commerce on bilateral trade flows," International Economics and Economic Policy, Springer, vol. 15(3), pages 565-586, July.
    10. Simplice Asongu & Nicholas M. Odhiambo, 2024. "The role of foreign aid in the nexus between capital flight and unemployment in sub-Saharan Africa," International Journal of Social Economics, Emerald Group Publishing Limited, vol. 52(1), pages 1-15, April.
    11. Kawalec Paweł, 2020. "The dynamics of theories of economic growth: An impact of Unified Growth Theory," Economics and Business Review, Sciendo, vol. 6(2), pages 19-44, June.
    12. Ayres, Robert U. & Warr, Benjamin, 2005. "Accounting for growth: the role of physical work," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 181-209, June.
    13. Ignazio Visco, 2001. "Paying for pensions: how important is economic growth?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 54(216), pages 73-102.
    14. Mishra, Vinod & Smyth, Russell, 2014. "Convergence in energy consumption per capita among ASEAN countries," Energy Policy, Elsevier, vol. 73(C), pages 180-185.
    15. Asongu Simplice, 2014. "Fresh Patterns of Liberalization, Bank Return and Return Uncertainty in Africa," Working Papers of the African Governance and Development Institute. 14/004, African Governance and Development Institute..
    16. Martha Jiménez García, 2019. "The Impact of Information and Communication Technologies on Economic Growth in Mexico," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 9(2), pages 11-22, February.
    17. Carmen Lenuta Trica & Cristian Silviu Banacu & Mihail Busu, 2019. "Environmental Factors and Sustainability of the Circular Economy Model at the European Union Level," Sustainability, MDPI, vol. 11(4), pages 1-16, February.
    18. Saba, Charles Shaaba & David, Oladipo Olalekan, 2020. "Convergence patterns in global ICT: Fresh insights from a club clustering algorithm," Telecommunications Policy, Elsevier, vol. 44(10).
    19. Orlando Gomes, 2005. "Knowledge creation and technology difusion: a framework to understand economic growth," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 20(2), pages 41-61, December.
    20. Dohtani, Akitaka, 2010. "A growth-cycle model of Solow-Swan type, I," Journal of Economic Behavior & Organization, Elsevier, vol. 76(2), pages 428-444, November.

    More about this item

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ifofob:64. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.