Fiscal prefunding in response to demographic uncertainty

Uncertainty in demographic developments lowers expected future welfare levels. Increasing current tax rates and decreasing expected future tax rates may compensate part of the welfare loss that is due to demographic uncertainty. In doing so, the government effectively pursues a precautionary fiscal policy analogous to the precautionary life-cycle saving behaviour that households may exhibit in the presence of income uncertainty.

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Year of publication:	2007-07
Authors:	Armstrong, Alex ; Draper, Nick ; Nibbelink, André ; Westerhout, Ed
Institutions:	Centraal Planbureau (CPB), Government of the Netherlands

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Extent:	application/pdf
Series:	CPB Discussion Paper.
Type of publication:	Book / Working Paper
Language:	English
Classification:	H2 - Taxation, Subsidies, and Revenue ; D50 - General Equilibrium and Disequilibrium. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005168707