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Generational policy is a fundamental aspect of a nation's fiscal affairs. The policy involves redistributing resources across generations and allocating to particular generations the burden of paying the government's bills. This chapter of the second edition of The Handbook of Public Economics...
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simulation how long it takes for the economy to reach game over-the point where current policy can no longer be maintained. Our … simulations, based on an OLG model calibrated to the U.S. economy, produce an average duration to game over of roughly one century … premium rise as the economy gets closer to hitting its fiscal limit, suggesting that the fiscal gap and the equity premium may …
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Every country faces what economists call an intertemporal (across time) budget constraint, which requires that its government's future expenditures, including the servicing of its outstanding official debt, be covered by its government's future receipts when measured in present value. The...
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