Sustainable Fiscal Strategies under Changing Demographics: A Political Economy Perspective

Andrew Hughes Hallett, Svend E. Hougaard Jensen, Filipe Vieira, Thorsteinn Sigurdur Sveinsson

Research output: Chapter in Book/Report/Conference proceedingConference abstract in proceedingsResearchpeer-review


This paper develops an overlapping generations model to evaluate, first, the steady state growthmaximizing level of public debt around which the economy needs to stabilise; second, how the optimal level of public debt varies as a function of key population parameters; third, how fiscal rules designed to stabilise the economy around that debt level need to vary with the population parameters; and, fourth, how the model performs as a reasonable and plausible representation of the economies that we might be concerned with. Finally, following the diminished fiscal space and flexibility that is created by deteriorating population parameters, some political economy perspectives are offered.
Original languageEnglish
Title of host publication49th Annual Monetary Studies Conference : Repositioning Small States for New Global Realities: Book of Abstracts
Place of PublicationKingston
PublisherThe University of the West Indies
Publication date2017
Publication statusPublished - 2017
EventThe 49th Annual Monetary Studies Conference - Radisson Fort George Hotel and Marina, Belize City, Belize
Duration: 8 Nov 201710 Nov 2017
Conference number: 49


ConferenceThe 49th Annual Monetary Studies Conference
LocationRadisson Fort George Hotel and Marina
CityBelize City
Internet address


  • Fiscal rules
  • Public debt
  • Economic growth
  • Demographic changes

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