AGING AND FISCAL SUSTAINABILITY IN A SMALL EURO AREA ECONOMY

2016 ◽  
Vol 21 (7) ◽  
pp. 1673-1705 ◽  
Author(s):  
Gabriela Castro ◽  
José R. Maria ◽  
Ricardo Mourinho Félix ◽  
Cláudia Rodrigues Braz
Keyword(s):  
Euro Area ◽  
Financial Stability ◽  
Private Consumption ◽  
Pension System ◽  
Policy Coordination ◽  
Fiscal Sustainability ◽  
External Imbalances ◽  
The Government ◽  
Negative Impacts ◽  
Effects Of Aging

Economic and social impacts of aging trends will be of the utmost importance in the near future. We embed a stylized pay-as-you-go (PAYG) pension system into a DSGE model with overlapping generations to assess the macroeconomic effects of aging in a small Euro Area economy. The simulations suggest large negative impacts on GDP and private consumption. In addition, external imbalances may widen significantly under the PAYG system. All results are conditional on the policy options addressing debt sustainability–the impacts tend to be very large if the government finances the aging with higher social security premia instead of lower replacement ratios. Sensitivity analysis reveals that GDP and private consumption impacts are less robust than those on external imbalances. Results also imply that supranational policy coordination may be crucial if the objective is to preserve economic and financial stability in the Euro Area.

scholarly journals FINANCIAL STABILITY OF THE SOLIDARITY PENSION SYSTEM IN UKRAINE

2019 ◽  
pp. 471-480
Author(s):  
О. Сhebereyako ◽  
◽  
V.. Bykova
Keyword(s):  
Financial Stability ◽  
Social Insurance ◽  
Pension Fund ◽  
Pension System ◽  
The Elderly ◽  
Government Budget ◽  
The Public ◽  
Revenue Collection ◽  
Accumulation System ◽  
The Government

The article is devoted to actual issues of public finance – old-age income support and social security in the twenty-first century. For this reason, government has tried to guarantee old-age’s pension eligibility. In our country pension system is presented with three-level pension system, which join mandatory and voluntary components – solidary system (first level), compulsory accumulation system (not exist now) and private pension system. According to Ukrainian’s pension model, basic and minimum pensions are funded by solidary system or PAYG (“Pay-As-You-Go”) system. As the results, maintains of sufficient financial resources of Pension fund’s budget is very important for financial stability of pension system. The authors show the relationship between sufficient financial support for the elderly in Ukraine and the financial capacity of the solidarity pension system. It was found that in order to form a financially stability pension system, it is necessary to ensure a sufficient amount of own pension fund revenues and avoiding deficit of the Pension Fund’s budget. So, the main indicators of current PAYG system in Ukraine include the public pension expenditures and deficit of the Pension Fund. The article presents dynamics of revenues to the Pension Fund of Ukraine and structure of own pension fund revenues and allocations from the government budged. According to author’s research, the main source of revenue collection of the Pension fund’s budget in Ukraine is the budget’s transfers. О. Чеберяко, В. Бикова ISSN 2078-5860 ФОРМУВАННЯ РИНКОВОЇ ЕКОНОМІКИ В УКРАЇНІ. 2019. Вип. 41 480 The budget expenditures in the structure of income of the pension fund are also analyzed. The total amount of the government budget expenditures that are directed to financing the pension fund are about twenty percent. In our opinion, the key reasons of the “lack of own income” are the shadowing of the economy, the macroeconomic situation, the low minimum wage, the existence of a limit on the maximum amount of wages, which accrues percent of social contribution. As a conclusion, the authors suggest measures for solving the issue of “lack of own income” of the Pension Fund of Ukraine – rising the retirement age, labor market’s reforming, increasing insurance fees and implement compulsory accumulation system. The analytical materials and conclusions can be useful for following researches of finding solutions for achieving the financial stable Pay-You-Go system. Key words: pension system, The Pension fund, social insurance payments, deficit of The Pension fund, government budget.

scholarly journals Demografia polityczna i możliwości dla polityki pronatalistycznej w Polsce

2016 ◽  
pp. 65-91
Author(s):  
Mateusz Łakomy
Keyword(s):  
Financial Stability ◽  
Pension System ◽  
Population Aging ◽  
Well Being ◽  
The Elderly ◽  
Low Fertility ◽  
Support Network ◽  
Factors Affecting ◽  
Number Of Children ◽  
The Government

Political demography links demographic findings with public policies aimed at achieving state goals. Current challenge of population aging causes threat to internal financial stability and well-being of the elderly. Aging also questions countries’ international position due to possibly reduced financial capability to maintain geopolitical power, and in extreme situation of lowest low fertility also due to continuous, unstoppable decline in the population size. In case of Poland, aging alone would result in almost doubling expenditure on pensions and healthcare. To respond to social and geopolitical challenges, the government should primarily focus on policies aimed at stimulating births. To foster pronatalist policies, factors affecting fertility may be grouped into five categories: economic, cultural, psychological, infrastructural and unplanned. All these factors influence childbearing behaviour simultaneously. Some of them constitute barriers to fertility (which need to be eliminated) and the others facilitate fertility (and they need to be strengthened). The barriers include financial constraints, individualistic values, financial insecurity, union instability, insufficient support network and lack of family-friendly employment. Identified facilitators in turn include pension system linking benefits with number of children (family pension system) and family-oriented aspirations and values with religion as a vital ingredient. Father commitment to family life impacts both as facilitator and by eliminating barriers.

scholarly journals From Democratic to Authoritarian Populism: Comparing Pre- and Post-2010 Hungarian Pension Policies

2019 ◽  
Vol 69 (3) ◽  
pp. 333-355
Author(s):  
Zoltán Ádám ◽  
András Simonovits
Keyword(s):  
Rule Of Law ◽  
Pension System ◽  
Fiscal Sustainability ◽  
Checks And Balances ◽  
The Rule Of Law ◽  
Authoritarian Populism ◽  
Preceding Period ◽  
The Difference ◽  
The Government ◽  
Pension Age

We compare the pre- and post-2010 Hungarian political regimes through the lens of pension policies. We label the pre-2010 regime as democratic populist because it was characterized by fiscally irresponsible policies, yet it maintained the system of checks and balances and the rule of law. In contrast, we call the post-2010 regime authoritarian populist as it has employed authoritarian political techniques while maintained popular legitimation through regular elections. To substantiate the difference between the two periods from an economic viewpoint, we compare pre- and post-2010 pension policies to find important differences as well as surprising similarities. In particular, we analysed the following five policy aspects: (a) reform and partial privatization of the government-run pension system, (b) policies on the statutory (normal) and the effective (average) pension age, (c) indexation, (d) progression in benefits calculations and progressivity in the personal income tax, and (e) contribution rates. Based on ideological preferences, we argue that one would expect the pension system to become financially more sustainable but less redistributive after 2010 in comparison to the preceding period. Yet, we find that although pro-poor redistribution through the pension system has indeed been curtailed, fiscal sustainability has not improved due to the erratic policies.

scholarly journals Извјештавање о дугорочној фискалној одрживости и финансијској стабилности ентитета јавног сектора // Reporting on long-term fiscal sustainability and financial stability in public sector entities

2012 ◽  
Vol 10 (16) ◽  
pp. 127
Author(s):  
Јелена Пољашевић
Keyword(s):  
Public Sector ◽  
Financial Stability ◽  
Fiscal Sustainability ◽  
Future Generations ◽  
Long Term Effects ◽  
Economic Changes ◽  
The Government ◽  
Fiscal Pressure

Резиме: Ентитети јавног сектора, па и јавни сектор у цјелини, не могу банкротирати на начин како банкрoтирају ентитети у приватном сектору. Лоше управљачке одлуке у јавном сектору доводе до смањења oбима и квалитета услуга и производа које јавни сектор пружа својим грађанима, повећања задужености и оптерећења будућих генерација, те смањења општег благостања земље. Како би се сагледали дугорочни ефекти текућих одлука постојећих влада, те оцијенила њихова одговорност, на међународном нивоу је покренута иницијатива о презентовању извјештаја о дугорочној фискалној одрживости и финансијској стабилности јавних ентитета. Ови извјештаји се заснивају на пројекцији будућих прилива и одлива који произилазе из постојеће економске политике. На основу ових пројекција може се оцијенити до које висине владина политика, под постојећим законским оквиром, може бити задовољена у будућности под претпоставком да се не мијењају порески ниво и ниво задужења. На основу ових информација, владе могу да предвиде утицај неких економских промјена на будуће генерације и благовремено предузему одређене акције.Summary: Public sector entities and public sector generally, cannot go bankrupt in a way entities in private sector can. Bad management decisions in public sector lead to decreasing of range and quality of services and products provided by public entities, increasing debt and fiscal pressure on future generations, and generally decreasing prosperity of a country. To view the long-term effects of decisions made by current governments and to assess their responsibility, an international initiative has been introduced to present statements of long-term fiscal sustainability and financial stability in public sector entities. These statements are based on projections of future incomes and outcomes which ensue from the current economic policy. Based on these projections it can be assessed to which extent the government policy can be realized in the future, assuming there will not be any changes in tax levels and the level of debt. With this information, governments can foresee the effect of some economic changes on future generations and take appropriate action.

Pension reform in france as a balance between adequacy and stability

2021 ◽  
Vol 72 (5) ◽  
pp. 95-102
Author(s):  
N. Zelenko ◽  
V. Zelenko
Keyword(s):  
Life Expectancy ◽  
Financial Stability ◽  
Pension System ◽  
Pension Scheme ◽  
Occupational Pension ◽  
Defined Benefit ◽  
Member States ◽  
Eu Member States ◽  
The Government ◽  
Pension Benefits

In this paper the authors analyze the main aspects and problems of reforming the French pension system. Most EU member states have been forced to review their system due to the coronavirus crisis, at least to make temporary adjustments. Given European aging population, declining birth rates and increased life expectancy, the associated increase in the age dependency ratio is creating tensions for underfunded defined benefit pension systems. This implicit pension debt has important macroeconomic implications. In France, the structure of the pension system provides for the existence of solidarity component, occupational pension schemes, as well as personal (which are not popular in this country). Sometimes there are significant differences in pension benefits between public and private sector workers with the same earnings, although this difference is much lower than in many other EU member states. Starting from July 1, 2017, no new pension reforms have been implemented in France, as the project proposed by the government and President Macron has received significant opposition from both trade unions and a large part of the population, as the creation of the so-called “Universal pension scheme” provides significant reduction in the rights of future retirees. In general, the choice of restrictive rules that reflect trends in wages, employment and life expectancy is critical for the proper updated system management. Preservation of the French pension system in the near future provides the increase in retirement age or extension of insurance to receive full pension benefits. The results of scientific research indicate the need to apply the adjusted strategy for further reforms, compared to their original versions. The reform proposed by the government and the president is aimed mostly at achieving long-term financial stability of the pension system. As for the adequacy of pension benefits, for some categories of citizens it can be decreased. Therefore, the reform envisages new configurations between the financial stability of the pension system along with ensuring the adequacy of the pension benefits amount.

scholarly journals Fiscal sustainability and its impact on financial stability in Lithuania and other new member states of the European Union

Ekonomika ◽  
2015 ◽  
Vol 94 (2) ◽  
pp. 28-46 ◽  
Author(s):  
Greta Keliuotytė-Staniulėnienė
Keyword(s):  
Financial Stability ◽  
Debt Crisis ◽  
Stability Index ◽  
Fiscal Sustainability ◽  
The European Union ◽  
The Public ◽  
Multi Criteria Evaluation ◽  
The Government ◽  
Research Show ◽  
Significant Factors

Financial stability is related to both the real economic sector and public finance stability, and this cohesion is complex, ambiguous, especially complicated, includes many factors acting in different directions. Fiscal sustainability is one of the most significant factors of financial stability, and recently its significance has unfolded in the context of increasing fiscal imbalances and the government debt crisis. The growing interdependence between the public and the financial sectors leads to strengthening the two-direction connection between fiscal sustainability and financial stability. This article analyses one direction of this connection, i. e. implications of fiscal sustainability for financial stability. The complex research presented in this article involves the analysis of scientific literature, of statistical data, multi-criteria evaluation, the interstate comparative analysis, and panel estimation. The results of the research show that some fiscal variables may have a role to play in explaining changes of the financial stability index.

Assessment of Poland's Economic Policy During te Crisis

2013 ◽  
Vol 8 (3) ◽  
pp. 195-210
Author(s):  
Stefan Krajewski
Keyword(s):  
Economic Policy ◽  
Pension System ◽  
Fiscal Sustainability ◽  
Economic Policies ◽  
Role Of The State ◽  
The Usa ◽  
Reducing Costs ◽  
Polish Economy ◽  
Favorable Conditions ◽  
The Eu

The rapid weakening of economic activity, covering most states in the world, gives rise to a lively discussion on the choice of methods to tackle the crisis, the legitimacy and effectiveness of various economic policies, the role of the state and the scope of its intervention in the economy. The paper evaluates the Polish economic policy in recent years. This refers to the situation prevailing in the EU and the USA. I conclude that the Polish economy during the crisis remained relatively stable, without having to provide the emergency aid from the outside. The development of such a situation has been affected by different reasons, including: - The benefits of the so-called "backwardness rent", which resulted, among others, in the inflow of EU funds (Poland was in 2007-2013 and in will be in 2014-2020 the biggest beneficiary of the EU budget); - The effects of decisions on changes in the tax and social security, taken for political reasons (before the crisis); - The controversial withdrawal from the funded pension system, reducing the budget deficit and public debt; - The prudent monetary policy and anti-inflation policy pursued over many years. Actions taken in Poland are primarily focused on reducing costs, which differs quite significantly from the economic policy dominant in the U.S. and the "old" EU countries which generally pursue expansionary fiscal policy and a policy of cheap money. Polish solution facilitates the achievement of short-term fiscal sustainability, but does not create favorable conditions for the development in the long-term (insufficient investment, petrification of economic structure, lack of innovation). 

On the Major Differences between the Banking Systems of the EAEU States

2020 ◽  
Vol 26 (4) ◽  
pp. 397-406
Author(s):  
T. E. Chekanova
Keyword(s):  
Financial Stability ◽  
Systems Approach ◽  
Negative Impact ◽  
Banking Regulation ◽  
Member States ◽  
Banking Systems ◽  
Significant Negative Impact ◽  
The Difference ◽  
The Government ◽  
Major Factors

The presented study examines the problems of integration of the national banking systems of the member states of the Eurasian Economic Union (EAEU).Aim. The study aims to examine the major differences in various aspects of functioning of banking systems in the EAEU member states in terms of their impact on integration processes.Tasks. The author identifies the most prominent features of the banking systems of the EAEU states; reveals the depth of the existing differences through a comparative analysis of various indicators of national banking systems; outlines ways of overcoming integration problems associated with differences in the banking sectors of the Union states.Methods. This study is based on universal general scientific methods and elements of comparative, functional, and economic analysis within the framework of a systems approach. The author uses regulatory documents and banking reports of the EAEU states, statistical and analytical materials of the Eurasian Economic Commission (EEC), and data of Moody’s international rating agency.Results. The study identifies a number of aspects that contain the major differences in the functioning of banking systems in the EAEU member states; highlights the disproportions in the scale, level of development, financial stability, and risks of the banking spheres of the Union states; comparatively analyzes the proportion of banking and non-banking structures in the system and the share of the government and non-resident companies in the capital of banks; marks the difference in the pricing of banking services; determines differences in the existing approaches to banking regulation and the established standards; analyzes the major differences in the legislative acts of the central banks and governments of the EAEU member states and in the terms and definitions used. According to the results of the study, the major factors hindering the development of integration processes between the banking systems of the EAEU states are identified.Conclusions. The existing differences between the banking systems of the EAEU countries are diverse and multifaceted. The author states that the aspects addressed in this study have a significant negative impact on the further development of integration processes, describing the major directions and actions of the member states aimed at minimizing the exiting differences, which are required to facilitate the convergence of the states and the transition towards a common financial market.

Fiscal Sustainability, Default Risk and Euro Area Sovereign Bond Spreads

2011 ◽  
Author(s):  
Vladimir Borgy ◽  
Thomas Laubach ◽  
Jean-Stéphane Mésonnier ◽  
Jean-Paul Renne
Keyword(s):  
Euro Area ◽  
Default Risk ◽  
Fiscal Sustainability ◽  
Sovereign Bond ◽  
Bond Spreads
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