Achieving fiscal balance in Japan

Selahattin Imrohoroğlu, Sagiri Kitao, Tomoaki Yamada

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

Japan is aging and has the highest government debt-to-output ratio among advanced economies. In this article, we build a micro data-based, large-scale overlapping generations model for Japan in which individuals differ in age, gender, employment type, income, and asset holdings, and incorporate the Japanese pension rules. Using existing pension law, current fiscal policy, and medium variants of demographic projections, we produce future paths for government expenditures and tax revenues, with implications for government debt and the public pension fund. Additional pension reform, a higher consumption tax, and higher female labor force participation help achieve fiscal stability.

Original languageEnglish
Pages (from-to)117-154
Number of pages38
JournalInternational Economic Review
Volume57
Issue number1
DOIs
Publication statusPublished - 2016 Feb 1

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Government debt
Fiscal
Japan
Pensions
Public pensions
Government expenditure
Consumption tax
Fiscal policy
Female labor force participation
Assets
Tax revenues
Overlapping generations model
Income
Pension funds
Demographics
Pension reform
Micro data

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Imrohoroğlu, S., Kitao, S., & Yamada, T. (2016). Achieving fiscal balance in Japan. International Economic Review, 57(1), 117-154. https://doi.org/10.1111/iere.12150

Achieving fiscal balance in Japan. / Imrohoroğlu, Selahattin; Kitao, Sagiri; Yamada, Tomoaki.

In: International Economic Review, Vol. 57, No. 1, 01.02.2016, p. 117-154.

Research output: Contribution to journalArticle

Imrohoroğlu, S, Kitao, S & Yamada, T 2016, 'Achieving fiscal balance in Japan', International Economic Review, vol. 57, no. 1, pp. 117-154. https://doi.org/10.1111/iere.12150
Imrohoroğlu S, Kitao S, Yamada T. Achieving fiscal balance in Japan. International Economic Review. 2016 Feb 1;57(1):117-154. https://doi.org/10.1111/iere.12150
Imrohoroğlu, Selahattin ; Kitao, Sagiri ; Yamada, Tomoaki. / Achieving fiscal balance in Japan. In: International Economic Review. 2016 ; Vol. 57, No. 1. pp. 117-154.
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