EconPapers    
Economics at your fingertips  
 

Some Intergenerational Arithmetic to Control Public Debt in the EU

Ward Romp, Roel Beetsma, Matthias Busse and Martin Larch

No 11669, CESifo Working Paper Series from CESifo

Abstract: Long-term projections are the bedrock of any analysis looking at the sustainability of public finances. This paper computes the changes in economic growth in individual European Union (EU) countries needed for government debt-to-GDP ratios to stay on their baseline trajectories (taken from the European Commission’s Debt Sustainability Monitor 2023) under low-fertility, high-fertility, low-migration and high-migration scenarios. These scenarios are provided in the Commission’s Ageing Report (2024). We find that deviations of migration from the baseline entail the largest effect on the required rate of economic growth. The effects of the low-fertility scenario kick in only in the very long run and even exceed those of low migration. Our findings inform policymakers on the urgency to apply measures to raise productivity growth. The urgency is heightened by the fact that in some countries demographic projections tend to be optimistic. Whether the necessary measures are taken is eventually a matter of political will more than anything else.

Keywords: demography; migration; fertility; debt; GDP (search for similar items in EconPapers)
JEL-codes: H50 H60 J11 J13 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-eec
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cesifo.org/DocDL/cesifo1_wp11669.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11669

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

 
Page updated 2025-03-22
Handle: RePEc:ces:ceswps:_11669