IMF paper warns against delays in Japanese fiscal consolidation
A working paper, published by the International Monetary Fund (IMF) in August, weighs the effects of fiscal consolidation in Japan on intergenerational inequality, arguing that efforts need to be made to reduce the deficit to prevent the burden of adjustment falling disproportionately on the young.
The author, Kiichi Tokuoka, says intergenerational inequality is already "significant" in Japan due to the ageing population and high government debt, which stood at 220% of GDP at the end of 2011. "Lack of fiscal consolidation would eventually increase interest rates, which would reduce output and hit young generations harder," the paper says.
The paper's simulations, based on a model of overlapping generations, suggest social security reforms, particularly reducing pension benefits, would have a lesser effect on inequality than other measures. Nevertheless, the author says a balanced approach would be fairer, since many people may already have planned their retirement based on current policy.
Click here to read the paper.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@centralbanking.com or view our subscription options here: subscriptions.centralbanking.com/subscribe
You are currently unable to print this content. Please contact info@centralbanking.com to find out more.
You are currently unable to copy this content. Please contact info@centralbanking.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@centralbanking.com test test test
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@centralbanking.com test test test
More on Debt Management
Insurers make disasters worse for eurozone governments – ECB study
Resulting sell-offs of short-term debt push up sovereign borrowing costs, research finds
Advanced economies’ debts are ‘unsustainable’ – research
US, Japan and European nations need to get their fiscal act together, says study by Belgian central bank
Venetian lessons for today’s central bankers
Loose money and lost credibility in 17th century city state provide a cautionary tale about the importance of international investor confidence, argues Biagio Bossone
The SDR as an alternative to the dollar
The weaponisation of the dollar by US authorities represents an opportunity to reconfigure usage of the SDR, argues Warren Coats
Book notes: Crisis cycle, by John H Cochrane, Luis Garicano and Klaus Masuch
This book ought to be read by anyone with an interest in or influence on the future development of the Emu
National debt will push up US interest rates – Dallas Fed research
Long-term rates could rise more than 1.5 percentage points over next 30 years, say authors
Time to worry about Japanese debt?
The transition to positive rates means Japan may need to re-examine its huge public debt burden, argues Sayuri Shirai
IMF agrees $20 billion loan deal with Argentina
Fund disburses $12 billion immediately as BCRA moves currency regime to managed float