Header

UZH-Logo

Maintenance Infos

Leveraging Posterity's Prosperity?


Brumm, Johannes; Kotlikoff, Laurence; Kübler, Felix (2020). Leveraging Posterity's Prosperity? In: ASSA Annual Meeting, San Diego, CA, 3 January 2020 - 5 January 2020, 152-156.

Abstract

We critically review studies by Blanchard (B) and Rachel and Summers (RS). By the standard fiscal-gap measure, the US government is in dire fiscal shape thanks to constantly enlarging its postwar, take-as-you-go Ponzi scheme. Yet B and RS seemingly rationalize its expansion. Their arguments rest on the safe rate being very low. But almost all households face high safe rates—the rates available from pre-paying their loans. We also question modeling assumptions that help drive key B and RS results and reference recent simulation studies, which reach strongly opposite conclusions to B's.

Abstract

We critically review studies by Blanchard (B) and Rachel and Summers (RS). By the standard fiscal-gap measure, the US government is in dire fiscal shape thanks to constantly enlarging its postwar, take-as-you-go Ponzi scheme. Yet B and RS seemingly rationalize its expansion. Their arguments rest on the safe rate being very low. But almost all households face high safe rates—the rates available from pre-paying their loans. We also question modeling assumptions that help drive key B and RS results and reference recent simulation studies, which reach strongly opposite conclusions to B's.

Statistics

Citations

Altmetrics

Downloads

5 downloads since deposited on 27 Jan 2021
5 downloads since 12 months
Detailed statistics

Additional indexing

Item Type:Conference or Workshop Item (Paper), refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Banking and Finance
Dewey Decimal Classification:330 Economics
Language:English
Event End Date:5 January 2020
Deposited On:27 Jan 2021 06:32
Last Modified:27 Jan 2021 20:30
Publisher:American Economic Association
Series Name:AEA Papers and Proceedings
Number:110
ISSN:2574-0768
OA Status:Green
Publisher DOI:https://doi.org/10.1257/pandp.20201104
Related URLs:https://www.aeaweb.org/articles?id=10.1257/pandp.20201104 (Publisher)
Other Identification Number:merlin-id:19923

Download

Green Open Access

Download PDF  'Leveraging Posterity's Prosperity?'.
Preview
Content: Published Version
Filetype: PDF
Size: 456kB
View at publisher