Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/212024 
Authors: 
Year of Publication: 
2005
Series/Report no.: 
Bank of Finland Research Discussion Papers No. 26/2005
Publisher: 
Bank of Finland, Helsinki
Abstract: 
We study the effects of aging population on the sustainability of fiscal policy in overlapping generations models with government debt and a pay-as-you-go pension system.The smaller the population growth rate, the lower the maximum sustainable level of deficits. When the utility function is of a specific form, an increase in the payroll tax rate and the replacement rate decreases the level of maximum sustainable deficits; except in the case when pension depends on the wage level prevailing during the working period.The ratio of the deficits in two economies with different population growth rates is characterized with numerical examples.
Subjects: 
aging
pensions
overlapping generations
fiscal policy
JEL: 
E21
E32
Persistent Identifier of the first edition: 
ISBN: 
952-462-251-3
Document Type: 
Working Paper

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