A Note on Public-Debt Sustainability in an Economy with Declining Fertility

Atsumasa Kondo

FinanzArchiv: Public Finance Analysis, 2012, vol. 68, issue 2, 153-164

Abstract: This note studies the relationship between population change and a government's long-term fiscal health. It uses an equilibrium model with dynamic optimization to investigate a situation in which a government repays its fiscal liabilities using tax revenues. The focus is on an upper bound on fiscal liability that is compatible with a no-Ponzi-game condition. The investigation deals, in particular, with how the upper bound depends on population size, population growth rate, and primary fiscal balance per person.

Keywords: public-debt sustainability; population growth rate; no-Ponzi-game condition (search for similar items in EconPapers)
JEL-codes: E62 H6 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (3)

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DOI: 10.1628/001522108X639963

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