Debt Reduction, Wage Formation and Intergenerational Welfare

Svend E. Hougaard Jensen

doi:10.1007/978-3-662-01660-2

Debt Reduction, Wage Formation and Intergenerational Welfare

Svend E. Hougaard Jensen

Department of Economics

University of Copenhagen

Research output: Chapter in Book/Report/Conference proceeding › Article in proceedings › Research › peer-review

Abstract

The macroeconomic and cross-generational effects of policies aiming at public debt reduction are shown to depend crucially on how wages respond to the associated tightening of fiscal policy. In order to dampen the adverse transitional effects on the macroeconomy and in order to protect currently living generations against potentially severe drops in consumption possibilities, the paper argues in favour of a long-term strategy for debt reduction, achieved through a temporarily higher excise tax rate rather than raising the tax rate on labour income.

Original language	English
Title of host publication	Pension Policies and Public Debt in Dynamic CGE Models
Editors	D. Peter Broer, Jukka Lassila
Number of pages	23
Publisher	Physica-Verlag
Publication date	1997
Pages	167–189
ISBN (Print)	9783790809701
ISBN (Electronic)	9783662016602
DOIs	https://doi.org/10.1007/978-3-662-01660-2
Publication status	Published - 1997
Event	Pension Systems, Taxation, and Public Debt in Dynamic CGE Models - ETLA, The Research Institute of the Finnish Economy, Helsinki, Finland Duration: 6 Apr 1995 → 7 Apr 1995

Workshop

Workshop	Pension Systems, Taxation, and Public Debt in Dynamic CGE Models
Location	ETLA, The Research Institute of the Finnish Economy
Country/Territory	Finland
City	Helsinki
Period	06/04/1995 → 07/04/1995

Keywords

Fiscal policy
Trade unions
Macroeconomic adjustment

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1007/978-3-662-01660-2Licence: Unspecified

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Cite this

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abstract = "The macroeconomic and cross-generational effects of policies aiming at public debt reduction are shown to depend crucially on how wages respond to the associated tightening of fiscal policy. In order to dampen the adverse transitional effects on the macroeconomy and in order to protect currently living generations against potentially severe drops in consumption possibilities, the paper argues in favour of a long-term strategy for debt reduction, achieved through a temporarily higher excise tax rate rather than raising the tax rate on labour income.",

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AB - The macroeconomic and cross-generational effects of policies aiming at public debt reduction are shown to depend crucially on how wages respond to the associated tightening of fiscal policy. In order to dampen the adverse transitional effects on the macroeconomy and in order to protect currently living generations against potentially severe drops in consumption possibilities, the paper argues in favour of a long-term strategy for debt reduction, achieved through a temporarily higher excise tax rate rather than raising the tax rate on labour income.

KW - Fiscal policy

KW - Trade unions

KW - Macroeconomic adjustment

KW - Fiscal policy

KW - Trade unions

KW - Macroeconomic adjustment

U2 - 10.1007/978-3-662-01660-2

DO - 10.1007/978-3-662-01660-2

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EP - 189

BT - Pension Policies and Public Debt in Dynamic CGE Models

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A2 - Lassila, Jukka

PB - Physica-Verlag

T2 - Pension Systems, Taxation, and Public Debt in Dynamic CGE Models

Y2 - 6 April 1995 through 7 April 1995

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