506 - Generational accounting with feedback effects on productivity growth: an application to the public sector of the Netherlands

Wetenschappelijke publicatie
Date 6 July 1997

In this paper an earlier study is extended in order to reflect insights of the endogenous growth theory. Labour productivity is not constant any more but reacts on public investment and the government deficit. The results of this research show that the current fiscal policy puts a much higher burden on future than on current generations. The difference can be as high as 17 % of life-time income. A budget-neutral reallocation from government consumption towards investment can significantly reduce these differences.