Indicators for Measuring Fiscal Sustainability: A Comparison of the OECD Method and Generational Accounting

Ulrich Benz and Stefan Fetzer

FinanzArchiv: Public Finance Analysis, 2006, vol. 62, issue 3, 367-391

Abstract: Based on an empirical application for Germany, we compare two methods of measuring fiscal sustainability: the generational-accounting approach and the OECD method. In a first step, we show that the two methods can be transformed into one another. Hence, the indicators of generational accounting can be used for the OECD method and vice versa, thus enlarging the set of sustainability indicators for both methods. In a second step, we discuss these indicators with respect to their theoretical deficiencies, tangibility, and sensitivity. Finally, we come to the conclusion that a combination of indicators stemming from both approaches can give a more general and understandable description of fiscal sustainability and satisfy a strictly defined condition of sustainability at the same time.

Keywords: fiscal sustainability; generational accounting; OECD method; sustainability indicators (search for similar items in EconPapers)
JEL-codes: E62 H62 (search for similar items in EconPapers)
Date: 2006
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Citations: View citations in EconPapers (26)

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DOI: 10.1628/001522106X153428

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