This website uses cookies.

By clicking the "Accept" button or continuing to browse our site, you agree to first-party and session-only cookies being stored on your device to enhance site navigation and analyze site performance and traffic. For more information on our use of cookies, please see our Privacy Policy.

  1. Home
  2. Journals
  3. Journal of Economic Perspectives
  4. Winter 1994
  5. Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy

Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy

Download Full Text PDF
(Complimentary)

Abstract

This paper illustrates the technique of generational accounting, a new way to evaluate fiscal policy that overcomes the inherent ambiguities of traditional deficit accounting. The authors illustrate why there is no 'correct' measure of the deficit and how generational accounting--estimating the fiscal burdens current policy places on different generations--provides a clearer picture of the intergenerational and macroeconomic effects of fiscal policy than any measure of the deficit. Their calculations suggest that, despite recent changes, U.S. fiscal policy is unsustainable in that it will ultimately require future generations to bear a much higher burden than those currently alive.

Citation

Auerbach, Alan J., Jagadeesh Gokhale, and Laurence J. Kotlikoff. 1994. "Generational Accounting: A Meaningful Way to Evaluate Fiscal Policy." Journal of Economic Perspectives, 8 (1): 73-94. DOI: 10.1257/jep.8.1.73

JEL Classification

  • E62 Fiscal Policy
There are no comments for this article.
Login to Comment