Confusion Compounds: The Curious Case of Generational Accounting
Recent generational accounting
figures illuminate a highly disturbing future prospect for the EU youth.
The example will draw on the pioneering generational accounting
of Laurence Kotlikoff (1992).
Specifically, it would institute what is known in economics as fiscal gap and generational accounting
, which include future financial obligations that are currently off the books.
The advantage of generational accounting
methodology is the relative ease in computing the tax burden since no specific assumptions about individual preferences, technology, and market structure are required.
Most of these exercises in generational accounting
have been framed by an explicit concern with long-term fiscal sustainability (Ablett 1996; Ablett 1998; Larch & Noguei-Gokhale 2009; Ballassone et.
Demography and social health insurance; an international comparison using generational accounting
This value, for example, is also used as a default value in the generational accounting
method for discounting future flows to the base year.
The goals of generational accounting
are to understand whether fiscal policy is sustainable, and if it's not, how much more today's and tomorrow's children will have to pay to achieve sustainability," Kotlikoff said in his presentation.
31) I concluded that Generational Accounting
was a fatally flawed approach to trying to predict the long-term fiscal path of the U.
To predict the national savings rate for Korea over the next several decades, he uses a life-cycle model that incorporates the generational accounting
approach needed to assess the distribution of fiscal burden across generations.
A technique, known as Generational Accounting
, has used 1991 and 1995 base line data to measure intergenerational balance (Ablett 1996; 1999).