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Public Saving and Policy Coordination in Aging Economies

Public Saving and Policy Coordination in Aging Economies In the coming decades, the share of people of working age will fall significantly in most developed countries. According to optimal taxation theory, public debts should be reduced before the baby‐boom generation retires. I find that if debts are instead maintained at current levels, welfare may be reduced substantially in countries with a large public sector and/or a large demographic change. Since population aging will be less dramatic in the United States than in Europe and Japan, capital will move from Europe and Japan to the United States. These capital movements will facilitate the US demographic transition but aggravate the transition in most European countries. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Scandinavian Journal of Economics Wiley

Public Saving and Policy Coordination in Aging Economies

Flodén, Martin
The Scandinavian Journal of Economics , Volume 105 (3) – Sep 1, 2003
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References (29)

Publisher
Wiley
Copyright
Copyright © 2003 Wiley Subscription Services, Inc., A Wiley Company
ISSN
0347-0520
eISSN
1467-9442
DOI
10.1111/1467-9442.t01-2-00004
Publisher site
See Article on Publisher Site

Abstract

In the coming decades, the share of people of working age will fall significantly in most developed countries. According to optimal taxation theory, public debts should be reduced before the baby‐boom generation retires. I find that if debts are instead maintained at current levels, welfare may be reduced substantially in countries with a large public sector and/or a large demographic change. Since population aging will be less dramatic in the United States than in Europe and Japan, capital will move from Europe and Japan to the United States. These capital movements will facilitate the US demographic transition but aggravate the transition in most European countries.

Journal

The Scandinavian Journal of Economics – Wiley

Published: Sep 1, 2003

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