The Deteriorating Fiscal Situation and an Aging Population

22 Pages Posted: 6 Dec 2002 Last revised: 30 Oct 2010

See all articles by Robert Dekle

Robert Dekle

University of Southern California - Department of Economics

Date Written: December 2002

Abstract

Japan's deteriorating fiscal situation has attracted international attention. I assess what current Japanese government policies mean for the future of public debt and the economy in general, given the inevitable aging of the population. I review how Japan got into this current fiscal mess, and then perform an analysis of some debt dynamics. With unchanged fiscal policies, Japan's public debt will rise to between 260% and 380% of GDP in 2030, and to between 700% and 1300% in 2040 -- clearly unsustainable levels. For the debt to be sustainable, significant increases in taxes, or cuts in government spending are necessary.

Suggested Citation

Dekle, Robert, The Deteriorating Fiscal Situation and an Aging Population (December 2002). NBER Working Paper No. w9367. Available at SSRN: https://ssrn.com/abstract=359306

Robert Dekle (Contact Author)

University of Southern California - Department of Economics ( email )

3620 South Vermont Ave. Kaprielian (KAP) Hall, 300
Los Angeles, CA 90089
United States
213-740-8335 (Phone)

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