Generational Accounts in the Czech Republic
The government intertemporal budget constraint states that all public liabilities have to be financed by either current or future generations. The generational accounting approach incorporates the expected demographic development and the parameters of the current fiscal policy into the intertemporal government budget constraint. By contrast with the public debt and deficit, the indicators based on generational accounting are forward looking and provide us with additional information about the current fiscal policy. To assess the sustainability of public budgets we constructed the first set of generational accounts for the Czech Republic. We found that a representative living agent obtains more benefits than he/she pays in taxes in 2004, i.e. the generational account of this representati ve agent is negative. In addition, the total amount of the government liabilities resulting from the current fiscal policy pursued to 2150 reaches about 300% of GDP in 2004. Finally, the costs of postponed adjustment of government revenues and expenditures seem to be considerable. We conclude that the present fiscal policy is not sustainable, i.e. public budgets in the Czech Republic should be stabilized by changing the current system of taxes and benefits to reflect potential demographic development.
|Date of creation:||May 2006|
|Date of revision:|
|Contact details of provider:|| Postal: Na Prikope 28, 115 03 Prague 1|
Phone: 00420 2 2442 1111
Fax: 00420 2 2421 8522
Web page: http://www.cnb.cz/en/research/research_intro/
More information through EDIRC
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.
- Nigel Pain, 2002.
"Fiscal Incentives, European Integration and the Location of Foreign Direct Investment,"
NIESR Discussion Papers
195, National Institute of Economic and Social Research.
- Hubert, Florence & Pain, Nigel, 2002. "Fiscal Incentives, European Integration and the Location of Foreign Direct Investment," Manchester School, University of Manchester, vol. 70(3), pages 336-63, June.
- Kotlikoff, L.J. & Raffelhuschen, B., 1999.
"Generational Accounting around the Globe,"
Norway; Department of Economics, University of Bergen
195, Department of Economics, University of Bergen.
- Bonin, Holger & Patxot, Concepció, 2004. "Generational Accounting as a Tool to Assess Fiscal Sustainability: An Overview of the Methodology," IZA Discussion Papers 990, Institute for the Study of Labor (IZA).
- Vladimir Bezdek & Kamil Dybczak & Ales Krejdl, 2003. "Czech Fiscal Policy: Introductory Analysis," Working Papers 2003/07, Czech National Bank, Research Department.
- Laurence J. Kotlikoff, 2001.
NBER Working Papers
8163, National Bureau of Economic Research, Inc.
- Laurence J. Kotlikoff & Willi Leibfritz, 1998.
"An International Comparison of Generational Accounts,"
NBER Working Papers
6447, National Bureau of Economic Research, Inc.
- Laurence J. Kotlikoff & Willi Leibfritz & Willi Leibfritz, 1999. "An International Comparison of Generational Accounts," NBER Chapters, in: Generational Accounting around the World, pages 73-102 National Bureau of Economic Research, Inc.
- Auerbach, Alan J. & Chun, Young Jun, 2006.
"Generational accounting in Korea,"
Journal of the Japanese and International Economies,
Elsevier, vol. 20(2), pages 234-268, June.
When requesting a correction, please mention this item's handle: RePEc:cnb:wpaper:2006/2. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jan Babecky)
If references are entirely missing, you can add them using this form.