The paper assesses the government expenditure effects from changing demographics in the Asian “Tiger” economies through 2050. With some exceptions, their limited social insurance commitments initially suggest that aging populations may not adversely affect fiscal balances. Yet for all the...

Several recent papers have examined the response of national saving to changes in fiscal policy. This paper uses knowledge about the intergenerational fiscal position of a country to determine whether this information helps to explain cross country differences in the nature of the response....

Empirical evidence shows that fiscal multipliers depend on the state of the cycle, the nature of fiscal policy and the level of debt. In other words, evidence points to non-linearities in the effects of fiscal policy. This paper provides a framework to examine the role of the level of government...

This paper explores the hypothesis that the propensity to consume out of income is not constant but varies, perhaps in a nonlinear fashion, with fiscal variables. It examines whether there is any empirical evidence to support the hypothesis that households move from non-Ricardian to Ricardian...

To monitor fiscal sustainability, this paper proposes a recursive algorithm derived from the law of motion of the debt-to-GDP ratio, subject to a government reaction function that links convergence to the targeted debt ratio with primary fiscal surpluses. Based on quarterly estimates of this...

This paper assesses the usefulness of summary measures of fiscal sustainability for the purpose of multilateral surveillance. An overview of the main conceptual issues is first presented. Next, an assessment is made of the strengths and weaknesses of the summary measures in the context of their...

Building on the evolving literature on the topic, this paper reviews the relationship between demographics and long-run capital flows in both theory and in the data. For this purpose, we develop a two region overlapping generations model where countries differ in their population growth and...

This paper studies the effect of demographic change on national saving, global interest rates, and international capital flows, focusing on the role of the public pension system. We develop a small open economy overlapping generations model to illustrate the channels through which demographic...

This paper outlines some of the arguments for and against the funding of public pensions, with a view to establishing whether there is an economic basis for judging funding to be superior to pay-as-you-go (PAYG). It is argued that funding does not have a clear advantage, and the case for a shift...

Canadian public pension plans are run on a "pay-as-you-go" basis. As the baby boom ages, contribution rates for the two main plans are projected to rise significantly, from their current level of around 5 percent of eligible earnings to over 13 percent by 2030. An alternative is to set...