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Analyzing Tax Policy Changes Using a Stochastic OLG Model with Heterogeneous Households: Technical Paper 2003-12

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  • Shinichi Nishiyama

Abstract

This paper describes a stochastic overlapping generations (OLG) model with heterogeneous agents, which is one of five models used at the Congressional Budget Office for recent fiscal policy analyses. In this model economy, households are heterogeneous with respect to their age, wealth holding, working ability, and working history, and households face individual shocks to their ability to earn income every year. The paper also explains the choice of parameters, the characteristics of the baseline economy, and the features of the model through policy experiments under several

Suggested Citation

  • Shinichi Nishiyama, 2003. "Analyzing Tax Policy Changes Using a Stochastic OLG Model with Heterogeneous Households: Technical Paper 2003-12," Working Papers 15112, Congressional Budget Office.
    • Handle: RePEc:cbo:wpaper:15112
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    File URL: https://www.cbo.gov/sites/default/files/108th-congress-2003-2004/workingpaper/2003-12_0.pdf
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    References listed on IDEAS

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    1. Shinichi Nishiyama, 2002. "Bequests, Inter Vivos Transfers, and Wealth Distribution," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 5(4), pages 892-931, October.
    2. Shinichi Nishiyama & Kent Smetters, 2003. "Consumption Taxes and Economic Efficiency in a Stochastic OLG Economy," NBER Working Papers 9492, National Bureau of Economic Research, Inc.
    3. S. Rao Aiyagari, 1994. "Uninsured Idiosyncratic Risk and Aggregate Saving," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 109(3), pages 659-684.
    4. Juan C. Conesa & Dirk Krueger, 1999. "Social Security Reform with Heterogeneous Agents," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(4), pages 757-795, October.
    5. Huggett, Mark, 1996. "Wealth distribution in life-cycle economies," Journal of Monetary Economics, Elsevier, vol. 38(3), pages 469-494, December.
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    Cited by:

    1. Kwon, Kyooho, 2019. "Equity across Generations and Uncertainty within a Generation: A Welfare Analysis of the National Pension System," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 41(2), pages 1-39.
    2. Martino Tasso, 2020. "Do details matter? An analysis of Italian personal income tax," Temi di discussione (Economic working papers) 1301, Bank of Italy, Economic Research and International Relations Area.
    3. Shinichi Nishiyama, 2013. "Fiscal Policy Effects in a Heterogeneous-Agent Overlapping-Generations Economy With an Aging Population: Working Paper 2013-07," Working Papers 44941, Congressional Budget Office.
    4. Bucciol, Alessandro & Cavalli, Laura & Fedotenkov, Igor & Pertile, Paolo & Polin, Veronica & Sartor, Nicola & Sommacal, Alessandro, 2017. "A large scale OLG model for the analysis of the redistributive effects of policy reforms," European Journal of Political Economy, Elsevier, vol. 48(C), pages 104-127.
    5. Felix Reichling & Shinichi Nishiyama, 2015. "The Costs to Different Generations of Policies That Close the Fiscal Gap: Working Paper 2015-10," Working Papers 51097, Congressional Budget Office.
    6. Maria I. Marika Santoro, 2009. "The CBO Infinite-Horizon Model with Idiosyncratic Uncertainty and Borrowing Constraints: Working Paper 2009-03," Working Papers 41375, Congressional Budget Office.

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