ID | 67175 |
FullText URL | |
Author |
Okamoto, Akira
Faculty of Economics, Okayama University
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Abstract | Japan’s government is heavily indebted, and the current net debt tends to increase. This paper uses an extended life-cycle general equilibrium model with endogenous fertility to investigate an optimal size of government debt from two viewpoints: individual welfare and future demographic dynamics. A simulation analysis finds that the level of net government debt, which maximizes per-capita utility, is negative at − 220% of Japan’s gross domestic product (GDP). The results also indicate that the net debt-to-GDP ratio of − 220% produces a considerable per-capita welfare gain; however, compared to the baseline simulation with a debt-to-GDP ratio of 150%, it substantially decreases the total population in the long run.
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Keywords | Government debt
Welfare
Demographic dynamics
Japanese economy
Simulation analysis
H30
C68
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Note | The version of record of this article, first published in The Japanese Economic Review, is available online at Publisher’s website: http://dx.doi.org/10.1007/s42973-024-00156-7
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Published Date | 2024-05-16
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Publication Title |
The Japanese Economic Review
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Publisher | Springer Science and Business Media LLC
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ISSN | 1352-4739
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NCID | AA11037573
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Content Type |
Journal Article
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language |
English
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OAI-PMH Set |
岡山大学
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Copyright Holders | © The Author(s) 2024
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File Version | publisher
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DOI | |
Web of Science KeyUT | |
Related Url | isVersionOf https://doi.org/10.1007/s42973-024-00156-7
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License | http://creativecommons.org/licenses/by/4.0/
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Citation | Okamoto, A. The optimum quantity of debt for an aging Japan: welfare and demographic dynamics. JER (2024). https://doi.org/10.1007/s42973-024-00156-7
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Funder Name |
Social Science Research Council
Japan Foundation Center for Global Partnership
Ministry of Education, Culture, Sports, Science and Technology
Okayama University
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助成番号 | 20K01679
23K01350
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