NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Generational Accounts - A Meaningful Alternative to Deficit Accounting

Alan J. Auerbach, Jagadeesh Gokhale, Laurence J. Kotlikoff

NBER Working Paper No. 3589 (Also Reprint No. r1636)
Issued in January 1991
NBER Program(s):   EFG   PE   EFG   AG

This paper presents a set of generational accounts (GAS) that can be used to assess the fiscal burden current generations are placing on future generations. The GAS indicate the net present value amount that current and future generations are projected to pay to the government now and in the future. The generational accounting system represents an alternative to using the federal budget deficit to gauge intergenerational policy. From a theoretical perspective, the measured deficit need bear no relationship to the underlying intergenerational stance of fiscal policy. Within the range of reasonable growth and interest rate assumptions the difference between age zero and future generations in GAS ranges from 17 to 24 percent. This means that if the fiscal burden on current generations is not increased relative to that projected from current policy (ignoring the just enacted federal budget deal) and if future generations are treated equally (except for an adjustment for growth) the fiscal burden facing all future generations over their lifetimes will be 17 to 24 percent larger than that facing newborns in 1989. The just enacted budget will, if it sticks, significantly reduce the fiscal burden on future generations.

download in pdf format
   (504 K)

email paper

The NBER Bulletin on Aging and Health provides summaries of publications like this.  You can sign up to receive the NBER Bulletin on Aging and Health by email.

This paper is available as PDF (504 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w3589

Published:

Users who downloaded this paper also downloaded these:
Auerbach, Kotlikoff, and Leibfritz Introduction to "Generational Accounting around the World"
Auerbach, Kotlikoff, and Leibfritz The Methodology of Generational Accounting
Auerbach, Gokhale, and Kotlikoff Generational Accounts: A Meaningful Alternative to Deficit Accounting
Fehr and Kotlikoff w5090 Generational Accounting in General Equilibrium
Auerbach, Gokhale, and Kotlikoff w3915 Social Security and Medicare Policy From the Perspective of Generational Accounting
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us