Uncertain Demographics and Fiscal Sustainability

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

• ISBN13: 9781107405059
• ISBN10: 110740505X
• Format: Paperback
• Copyright: 2012-07-19
• Publisher: Cambridge Univ Pr

Summary

This book was first published in 2008. 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

List of tables

List of contributors

Preface

Introduction

Uncertain Demographics

Changing views of future demographic trends

Empirically-based specification of forecast uncertainty

Comment: the UPE forecasts: strengths, innovations, developments

Measuring Sustainability in a Stochastic Environment

Fiscal implications of demographic uncertainty: comparisons across the European Union

Demographic uncertainty and pension projections

Demographic uncertainty and health care expenditure

Comment: assessing the uncertainty in long-term fiscal projections

Enhancing Sustainability

Evaluating pension reforms in the German context

Longevity adjustment of pension benefits

Ageing, demographic uncertainty and optimal fiscal policy

Comment: computable equilibrium models in policy analysis: future directions

Extensions

Macroeconomic consequences of demographic uncertainty in world regions

Informational assumptions, aggregate mortality risk and life cycle saving

Longevity adjustment of retirement age and intergenerational risk sharing

A general equilibrium analysis of annuity rates in the presence of aggregate mortality risk

Comment: the economics of demographic uncertainty

Index

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