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Will Abenomics Save Future Generations?

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  • SHIMASAWA Manabu
  • OGURO Kazumasa

Abstract

We estimated the lifetime net burden ratio by explicitly considering the burden of inflation tax in order to quantitatively assess the impact of inflation or deflation on the intergenerational imbalances. As a result, the following points were elucidated: 1) The previous studies which do not take inflation tax revenue into consideration underestimate the burden of the currently living generations during an inflationary period and that of the future generations in a deflationary period; 2) Abenomics aiming to trigger a shift from deflation to inflation is desirable from the aspect of filling the intergenerational imbalances; and 3) Although the economic growth promotion measures will reduce the lifetime net burden ratio of all generations, such measures alone will not help to eliminate the intergenerational imbalances in Japan; a concurrent implementation of public finance and social security system reform is necessary.

Suggested Citation

  • SHIMASAWA Manabu & OGURO Kazumasa, 2016. "Will Abenomics Save Future Generations?," Discussion papers 16100, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:16100
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