Fiscal policy effects in a heterogeneous-agent OLG economy with an aging population

Nishiyama, Shinichi (2015) Fiscal policy effects in a heterogeneous-agent OLG economy with an aging population. Journal of Economic Dynamics and Control, 61. pp. 114-132. ISSN 0165-1889

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Abstract

This paper incorporates the aging population projected by the U.S. Social Security Administration to a heterogeneous-agent OLG model with idiosyncratic wage shocks and analyzes its effects on individual households, the government budget, and the overall economy. The fiscal gap caused by the demographic change is 2.92% of GDP under the SSA's intermediate projection. The effect of the aging population is large by itself and depends significantly on how the government finances the cost of the demographic change. There is a strong trade-off between efficiency and equity, and this paper quantitatively assesses the pros and cons of stylized fiscal reform plans.

Item Type:
Journal Article
Journal or Publication Title:
Journal of Economic Dynamics and Control
Additional Information:
This is the author’s version of a work that was accepted for publication in Journal of Economic Dynamics and Control. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Dynamics and Control, 61, 2015 DOI:10.1016/j.jedc.2015.09.007
Uncontrolled Keywords:
/dk/atira/pure/subjectarea/asjc/2600/2604
Subjects:
ID Code:
75666
Deposited By:
Deposited On:
28 Sep 2015 11:05
Refereed?:
Yes
Published?:
Published
Last Modified:
24 Oct 2020 03:35