Policy uncertainty and cost of delaying reform: The case of aging Japan

Sagiri Kitao

研究成果: Article

11 引用 (Scopus)

抜粋

Reform is inevitable in an aging economy with a generous pay-as-you-go social security system. Often, however, the timing and structure of reform are unknown. We explicitly model policy uncertainty in a general equilibrium life-cycle model and let agents update expectations and react as uncertainty is resolved over time. Using the case of Japan, a country facing severe demographic and fiscal challenges, we quantify welfare tradeoff across generations by delaying reform or reducing its scope. Individuals respond to a delay by dis-saving and working less, while facing higher taxes to cover additional expenditures during the transition. Fiscal uncertainty itself has a more significant adverse effect on older individuals, who face greater income risks and a lower return on their retirement savings.

元の言語English
ページ(範囲)81-100
ページ数20
ジャーナルReview of Economic Dynamics
27
DOI
出版物ステータスPublished - 2018 1 1

ASJC Scopus subject areas

  • Economics and Econometrics

フィンガープリント Policy uncertainty and cost of delaying reform: The case of aging Japan' の研究トピックを掘り下げます。これらはともに一意のフィンガープリントを構成します。

  • これを引用