COMPARISON OF VARIOUS FISCAL POLICIES IN THE FACE OF DIFFERENT DEMOGRAPHIC STAGES

Naoyuki Yoshino (), Keigo Kameda, Hiroaki Miyamoto and Zhenkun Lu

The Singapore Economic Review (SER), 2024, vol. 69, issue 04, 1473-1497

Abstract: This study examines the impact of aging on the effectiveness of various fiscal expenditures, including government consumption, one-time government transfers to households, public investment and R&D spending, using a dynamic stochastic general equilibrium model. Our findings reveal that (1) Aging enhances the effects of the transfer on augmenting GDP. (2) Regardless of aging, R&D expenditure consistently stands out over all time spans, with younger society benefiting more. (3) Public investment ranks second among for different fiscal policies in the long run, while shows bigger impact in younger society. (4) One-time transfer has only a temporary effect and is the least effective in boosting GDP in both young and old societies. (5) Multipliers for public investment and R&D expenditure increase with the accumulation of public capital and TFP. Their multiplier of young society is larger than old society because impact on consumption is much more effective.

Keywords: Fiscal policy effectiveness; aging population; Japan; DSGE model (search for similar items in EconPapers)
JEL-codes: E62 H30 J1 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1142/S0217590824450097

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