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Indicators for Measuring Fiscal Sustainability: A Comparative Application of the OECD-Method and Generational Accounting

  • Benz, Ulrich
  • Fetzer, Stefan
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    On the basis of an empirical application for Germany, we compare two methods for measuring fiscal sustainability, the Generational Accounting approach and the OECD-Method. We show that both methods can be transferred into each other. Therefore the indicators belonging to one method can be used for the other one and consequently the set of sustainability indicators is enlarged for both methods. Furthermore we evaluate the indicators with the criteria theoretical deficiencies, tangibility and sensitivity. We draw the conclusion that a combination of indicators stemming from both approaches can give a generally understandable and theoretical correct defined description of fiscal sustainability at the same time.

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    File URL: http://econstor.eu/bitstream/10419/22992/1/118_04.pdf
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    Paper provided by Institut für Finanzwissenschaft, Albert-Ludwigs-Universität Freiburg in its series Discussion Papers with number 118.

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    Date of creation: 2004
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    Handle: RePEc:zbw:alufin:118
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    1. Blanchard, Olivier J., 1984. "Current and anticipated deficits, interest rates and economic activity," European Economic Review, Elsevier, vol. 25(1), pages 7-27, June.
    2. Jochen Michaelis & Michael Pflüger, 2000. "The impact of tax reforms on unemployment in a SMOPEC," Journal of Economics, Springer, vol. 72(2), pages 175-201, June.
    3. 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.
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