IDEAS home Printed from https://ideas.repec.org/a/spr/portec/v20y2021i2d10.1007_s10258-020-00180-6.html
   My bibliography  Save this article

Generational Accounting in Portugal

Author

Listed:
  • Jorge Pinheiro

    (University of Glasgow)

Abstract

The social and economic developments in European countries have put pressure on their national budgets and threaten the sustainability of public policies. The traditional fiscal indicators, specifically, the deficit and the debt, which are still used today as guiding tools, have proved to be insufficient, due to their arbitrary nature and short-term focus. In this paper, we resort to an alternative fiscal indicator, known as ‘generational accounting’, which is able to incorporate the future changes in the demographic structure of the population, and their corresponding impact on public accounts. It is also able to evaluate how current fiscal policy affects, not only, current generations, but also future generations. We apply this methodology to assess the long-term fiscal situation of Portugal, and compare the results with those obtained in 1999. In this context, we also explore additional scenarios, as well as additional indicators, in order to provide some robustness to our findings. Our results show that, if the current fiscal policy is not significantly changed, future generations will face a much heavier fiscal burden than current generations.

Suggested Citation

  • Jorge Pinheiro, 2021. "Generational Accounting in Portugal," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 20(2), pages 181-221, May.
    • Handle: RePEc:spr:portec:v:20:y:2021:i:2:d:10.1007_s10258-020-00180-6
    DOI: 10.1007/s10258-020-00180-6
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10258-020-00180-6
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10258-020-00180-6?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    2. Balassone, F. & Cunha, J. & Langenus, G. & Manzke, B. & Pavot, J. & Prammer, D. & Tommasino, P., 2008. "Fiscal sustainability and policy implications for the euro area," Working papers 225, Banque de France.
    3. Willem H. Buiter, 1997. "Generational Accounts, Aggregate Saving and Intergenerational Distribution," Economica, London School of Economics and Political Science, vol. 64(256), pages 605-626, November.
    4. Bonin, Holger & Patxot, Concepció, 2004. "Generational Accounting as a Tool to Assess Fiscal Sustainability: An Overview of the Methodology," IZA Discussion Papers 990, Institute of Labor Economics (IZA).
    5. Robert Haveman, 1994. "Should Generational Accounts Replace Public Budgets and Deficits?," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 95-111, Winter.
    6. Altonji, Joseph G & Hayashi, Fumio & Kotlikoff, Laurence J, 1992. "Is the Extended Family Altruistically Linked? Direct Tests Using Micro Data," American Economic Review, American Economic Association, vol. 82(5), pages 1177-1198, December.
    7. Cardarelli, Roberto & Sefton, James & Kotlikoff, Laurence J, 2000. "Generational Accounting in the UK," Economic Journal, Royal Economic Society, vol. 110(467), pages 547-574, November.
    8. Diamond, Peter, 1996. "Generational Accounts and Generational Balance: An Assessment," National Tax Journal, National Tax Association;National Tax Journal, vol. 49(4), pages 597-607, December.
    9. repec:bla:scandj:v:94:y:1992:i:2:p:303-18 is not listed on IDEAS
    10. Alan J. Auerbach & Jagadeesh Gokhale & Laurence J. Kotlikoff, 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 73-94, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kotlikoff, Laurence J., 2002. "Generational policy," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 4, chapter 27, pages 1873-1932, Elsevier.
    2. Robert P. Hagemann & Christoph John, 1997. "Fiscal Reform In Sweden: What Generational Accounting Tells Us," Contemporary Economic Policy, Western Economic Association International, vol. 15(3), pages 1-12, July.
    3. André Masson, 2002. "Méthodes et usages des comptes générationnels : un regard décalé," Économie et Prévision, Programme National Persée, vol. 154(3), pages 1-24.
    4. Janusz Jablonowski & Christoph Mueller & Bernd Raffelhüschen, 2011. "A fiscal outlook for Poland using Generational Accounts," NBP Working Papers 85, Narodowy Bank Polski.
    5. Jabłonowski, Janusz & Müller, Christoph & Raffelhüschen, Bernd, 2010. "A fiscal outlook for Poland using generational accounts," FZG Discussion Papers 47, University of Freiburg, Research Center for Generational Contracts (FZG).
    6. Otto Gandenberger, 2000. "Is the Fiscal Deficit Misconceived? Proponents of Generational Accounting Overstate their Case," CESifo Working Paper Series 282, CESifo.
    7. Omar Aziz & Norman Gemmell & Athene Laws, 2016. "Income and Fiscal Incidence by Age and Gender: Some Evidence from New Zealand," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 534-558, September.
    8. Hsieh, Kevin Yu-Ching & Tung, An-Chi, 2016. "Taiwan’s National Pension Program: A remedy for rapid population aging?," The Journal of the Economics of Ageing, Elsevier, vol. 8(C), pages 52-66.
    9. Kamil Dybczak, 2006. "Generational Accounts in the Czech Republic," Working Papers 2006/2, Czech National Bank.
    10. Bernd Raffelhuschen & Laurence J. Kotlikoff, 1999. "Generational Accounting around the Globe," American Economic Review, American Economic Association, vol. 89(2), pages 161-166, May.
    11. Boll, Stephan, 1996. "Intergenerative Verteilungseffekte öffentlicher Haushalte: Theoretische Konzepte und empirischer Befund für die Bundesrepublik Deutschland," Discussion Paper Series 1: Economic Studies 1996,06, Deutsche Bundesbank.
    12. Fehr, Hans, 1999. "Welfare Effects of Dynamic Tax Reforms," Beiträge zur Finanzwissenschaft, Mohr Siebeck, Tübingen, edition 1, volume 5, number urn:isbn:9783161470165, September.
    13. Keuschnigg, Christian & Keuschnigg, Mirela & Koman, Reinhard, 2000. "Public Debt and Generational Balance in Austria Lueth, Erik; Raffelhueschen, Bernd," Economics Series 80, Institute for Advanced Studies.
    14. Shimasawa, Manabu & Oguro, Kazumasa & Masujima, Minoru, 2014. "Population Aging, Policy Reforms, and Lifetime Net Tax Rate in Japan: A Generational Accounting Approach," CIS Discussion paper series 625, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    15. John Ablett & Zaid Tseggai‐Bocurezion, 2000. "Lifetime Net Average Tax Rates in Australia Since Federation—A Generational Accounting Study," The Economic Record, The Economic Society of Australia, vol. 76(233), pages 139-151, June.
    16. Christian Keuschnigg & Mirela Keuschnigg & Reinhard Koman & Erik Lüth & Bernd Raffelüschen, 2000. "Public Debt and Generational Balance in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(3), pages 225-252, September.
    17. Boll, Stephan, 1996. "Intergenerational redistribution through the public sector: Methodology of generational accounting and its empirical application to Germany," Discussion Paper Series 1: Economic Studies 1996,06e, Deutsche Bundesbank.
    18. Feldstein, Martin, 1996. "The Missing Piece in Policy Analysis: Social Security Reform," American Economic Review, American Economic Association, vol. 86(2), pages 1-14, May.
    19. SHIMASAWA Manabu & OGURO Kazumasa, 2016. "Will Abenomics Save Future Generations?," Discussion papers 16100, Research Institute of Economy, Trade and Industry (RIETI).
    20. Volker Börstinghaus & Georg Hirte, 2002. "Generational Accounting versus Computable General Equilibrium," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(3), pages 227-243, July.

    More about this item

    Keywords

    Generational accounting; Fiscal sustainability; Intergenerational distribution; Overlapping generations; Net tax payments; Public accounts;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:portec:v:20:y:2021:i:2:d:10.1007_s10258-020-00180-6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.