Almost two decades have passed since the development of the prototype of the Auerbach-Kotlikoff dynamic life-cycle simulation model. The model has been used to examine a host of policies, including tax reform, tax cuts, investment incentives, tax progressivity, expansion of social security, government spending, monetary policy, endogenous growth, the size of the informal sector, human capital accumulation, and educational policy. It has also been used to study demographic change, the timing of policy impacts, the efficiency gains from fiscal reforms, and the effects of fiscal policies on both the intra- and intergenerational distributions of economic welfare. Auerbach and Kotlikoff and their co-authors have done much of this research. The rest has been done by other economists in academia, government, and multilateral lending institutions, many of whom have developed their own versions of the model. This paper describes the origins of the A-K Model, its current structure, the lessons learned using it, and some of the questions that remain to be addressed. It also considers two issues -- tax reform and social security privatization -- in illustrating the model's current capacities.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
6684.
Length: Date of creation: Aug 1998 Date of revision: Handle: RePEc:nbr:nberwo:6684
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Find related papers by JEL classification: H0 - Public Economics - - General E0 - Macroeconomics and Monetary Economics - - General
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References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Auerbach, Alan J & Kotlikoff, Laurence J & Skinner, Jonathan, 1983.
"The Efficiency Gains from Dynamic Tax Reform,"
International Economic Review,
Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 24(1), pages 81-100, February.
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Martin Feldstein & Jeffrey B. Liebman, 2001.
"Social Security,"
NBER Working Papers
8451, National Bureau of Economic Research, Inc.
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Feldstein, Martin & Liebman, Jeffrey B., 2002.
"Social security,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 32, pages 2245-2324
Elsevier.
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