Uncertain Demographics and Fiscal Sustainability

by Edited by Juha M. Alho , Svend E. Hougaard Jensen , Jukka Lassila

• ISBN13: 9780521877404
• ISBN10: 0521877407
• Edition: 1st
• Format: Hardcover
• Copyright: 2008-04-21
• Publisher: Cambridge University Press

Summary

There is widespread acceptance that much of the developed world faces a potential pensions and welfare crisis as a result of declining birth rates and an ageing population. However, there is considerable uncertainty about the specifics of demographic forecasting and this has significant implications for public finances. Uncertain Demographics and Fiscal Sustainability addresses the economic consequences of uncertainty and, with particular reference to European economies, explores the impact of demographic risks on public finances, including pension systems, health care and old-age care expenditures. Covering a spectrum of theoretical and empirical approaches, different types of computational models are used to demonstrate not only the magnitudes of the uncertainties involved but also how these can be addressed through policy initiatives. The book is divided into four parts covering demographic, measurement, policy and methodological issues. Each part is followed by a discussion essay that draws out key elements and identifies common themes.

Table of Contents

List of figures	p. vii
List of tables	p. xi
List of contributors	p. xiv
Preface	p. xvi
Introduction	p. 1
Uncertain demographics
Changing views of future demographic trends	p. 11
Empirically based specification of forecast uncertainty	p. 34
Comment: The UPE forecasts: strengths, innovations, developments	p. 55
Measuring sustainability in a stochastic environment
Fiscal implications of demographic uncertainty: comparisons across the European Union	p. 65
Demographic uncertainty and pension projections	p. 82
Demographic uncertainty and health care expenditure	p. 94
Comment: Assessing the uncertainty in long-term fiscal projections	p. 109
Enhancing sustainability
Evaluating pension reforms in the German context	p. 117
Longevity adjustment of pension benefits	p. 137
Ageing, demographic uncertainty and optimal fiscal policy	p. 161
Comment: Computable equilibrium models in policy analysis: future directions	p. 184
Extensions
Macro-economic consequences of demographic uncertainty in world regions	p. 195
Informational assumptions, aggregate mortality risk and life-cycle saving	p. 219
Uncertain demographics, longevity adjustment of the retirement age and intergenerational risk-sharing	p. 239
A general equilibrium analysis of annuity rates in the presence of aggregate mortality risk	p. 258
Comment: The economics of demographic uncertainty	p. 270
Index	p. 275
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