Aging: Some Pleasant Fiscal Arithmetic

David Hauner ()

International Advances in Economic Research, 2007, vol. 13, issue 3, 347-364

Abstract: Projections of age-related public expenditure growth have raised widespread concerns about fiscal sustainability. This paper examines how total expenditure would develop under four policy rules on public expenditure growth. Some simple arithmetic of expenditure, GDP, and population is reviewed and applied in simulations for 19 OECD countries over 2000–50. A general and a specific conclusion arise from the results. Generally, long-term expenditure projections could benefit from revisiting common assumptions on non-age-related expenditure growth. Specifically, realistic gradual adjustment in non-age-related expenditures could go a long way towards maintaining fiscal sustainability under age-related spending pressures. Copyright International Atlantic Economic Society 2007

Keywords: Aging; Fiscal sustainability; OECD countries; Public expenditure; H50; J11 (search for similar items in EconPapers)
Date: 2007
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DOI: 10.1007/s11294-007-9093-z

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