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Indicators for Measuring Fiscal Sustainability: A Comparative Application of the OECD-Method and Generational Accounting

Ulrich Benz and Stefan Fetzer

No 118, Discussion Papers from Albert-Ludwigs-Universität Freiburg, Institut für Finanzwissenschaft

Abstract: On the basis of an empirical application for Germany, we compare two methods for measuring fiscal sustainability, the Generational Accounting approach and the OECD-Method. We show that both methods can be transferred into each other. Therefore the indicators belonging to one method can be used for the other one and consequently the set of sustainability indicators is enlarged for both methods. Furthermore we evaluate the indicators with the criteria theoretical deficiencies, tangibility and sensitivity. We draw the conclusion that a combination of indicators stemming from both approaches can give a generally understandable and theoretical correct defined description of fiscal sustainability at the same time.

JEL-codes: H62 E62 (search for similar items in EconPapers)
Date: 2004
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