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Comparison Of Various Fiscal Policies In The Face Of Different Demographic Stages

Author

Listed:
  • NAOYUKI YOSHINO

    (Faculty of Economics Professor Emeritus of Economics, Keio University 2-15-45 Mita, Minato-ku, Tokyo 108-8345 Japan)

  • KEIGO KAMEDA

    (School of Policy Studies, Kwansei Gakuin University, 1-155 Uegahara Ichiban-cho, Nishinomiya, Hyogo 662-8501, Japan)

  • HIROAKI MIYAMOTO

    (Institute of Economic Research, Hitotsubashi University 2-1 Naka, Kunitachi, Tokyo 186-8603, Japan)

  • ZHENKUN LU

    (School of Policy Studies, Kwansei Gakuin University, 1-155 Uegahara Ichiban-cho, Nishinomiya, Hyogo 662-8501, Japan)

Abstract

This study examines the impact of aging on the effectiveness of various fiscal expenditures, including government consumption, one-time government transfers to households, public investment and R&D spending, using a dynamic stochastic general equilibrium model. Our findings reveal that (1) Aging enhances the effects of the transfer on augmenting GDP. (2) Regardless of aging, R&D expenditure consistently stands out over all time spans, with younger society benefiting more. (3) Public investment ranks second among for different fiscal policies in the long run, while shows bigger impact in younger society. (4) One-time transfer has only a temporary effect and is the least effective in boosting GDP in both young and old societies. (5) Multipliers for public investment and R&D expenditure increase with the accumulation of public capital and TFP. Their multiplier of young society is larger than old society because impact on consumption is much more effective.

Suggested Citation

  • Naoyuki Yoshino & Keigo Kameda & Hiroaki Miyamoto & Zhenkun Lu, 2024. "Comparison Of Various Fiscal Policies In The Face Of Different Demographic Stages," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 69(04), pages 1473-1497, June.
    • Handle: RePEc:wsi:serxxx:v:69:y:2024:i:04:n:s0217590824450097
    DOI: 10.1142/S0217590824450097
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    More about this item

    Keywords

    Fiscal policy effectiveness; aging population; Japan; DSGE model;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • J1 - Labor and Demographic Economics - - Demographic Economics

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