Template-Type: ReDIF-Paper 1.0
Author-Name: Shinichi Nishiyama
Author-Name-First: Shinichi
Author-Name-Last: Nishiyama
Title: Fiscal Policy Effects in a Heterogeneous-Agent OLG Economy with an Aging Population
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 2.94% of GDP under the 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.
Creation-Date: 2015
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/LancasterWP2015_018.pdf
File-Format: application/pdf
Number: 89793613
Classification-JEL: D91, E62, H31
Keywords: dynamic general equilibrium, heterogeneous agents, overlapping generations, aging population, fiscal policy
Handle: RePEc:lan:wpaper:89793613