Fiscal sustainability in Japan

Sakuragawa, Masaya; Hosono, Kaoru

doi:10.1016/j.jjie.2011.10.002

Cited by 31 publications

(28 citation statements)

References 19 publications

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“…At first, the fiscal sustainability of the welfare state is related to the economic growth [13][14][15][16]. If the economy grows smoothly, the tax is easily collected.…”

Section: Economic Factorsmentioning

confidence: 99%

“…Meanwhile, some studies have demonstrated that primary balance is important [14,20]. Sakuragawa and Karou [14] examined the phenomenon that the real interest rate on government bonds is low, while the national debt surge is comparable to the gross domestic product in developed countries as well as Japan by incorporating the concept of intermediation cost is explained.…”

Section: Economic Factorsmentioning

confidence: 99%

“…Sakuragawa and Karou [14] examined the phenomenon that the real interest rate on government bonds is low, while the national debt surge is comparable to the gross domestic product in developed countries as well as Japan by incorporating the concept of intermediation cost is explained. Specifically, government bonds are not very sensitive to interest rate changes because intermediation costs lower deposit interest rates and bond return replaces deposits.…”

Section: Economic Factorsmentioning

confidence: 99%

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How Does a Welfare State achieves Fiscal Sustainability? A Study of the Impact of Tax Equity

Ko¹

2018

Taxes and Taxation Trends

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This study seeks to identify institutional characteristics of financially sustainable welfare states that focus on tax structure. Using data collected from 17 OECD countries from 1986 to 2013, this study investigates the characteristics of fiscal sustainability of each welfare state. The model of simultaneous equations (three-step least-squares method) is used for treating simultaneousness between fiscal sustainability and welfare expenditures. As a result, increasing the level of tax burden generally has a positive effect on the fiscal sustainability of the welfare state. However, the most important point that should be considered is the manner of raising tax revenue that affects the sustainability of economic, political, and social dimensions for securing fiscal sustainability. Specifically, it is necessary to raise the equity between the sources of taxation in accordance with the ability to pay principle. Improving vertical equity can also make a positive contribution to the fiscal sustainability in order to secure the political legitimacy of the tax and mitigate the regressive burden, which may result from the expansion of a consumption tax. Finally, it is beneficial to fiscal sustainability of the welfare state to diversify the financial base by combining the ability to pay principle and the benefit principle.

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“…At first, the fiscal sustainability of the welfare state is related to the economic growth [13][14][15][16]. If the economy grows smoothly, the tax is easily collected.…”

Section: Economic Factorsmentioning

confidence: 99%

Section: Economic Factorsmentioning

confidence: 99%

Section: Economic Factorsmentioning

confidence: 99%

See 1 more Smart Citation

How Does a Welfare State achieves Fiscal Sustainability? A Study of the Impact of Tax Equity

Ko¹

2018

Taxes and Taxation Trends

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“…Examples of the DSGE model being applied to the Japanese economy include the following: the influences of the consumption tax increase (Hayashida et al 2014), an analysis of the expenditure shocks of the fiscal bureau and fund-raising (Iwata 2009), the sustainability of national accounts (Sakuragawa and Hosono 2011), the ripple effects of public infrastructure on the Japanese economy (Eguchi 2011), and benefit return of corporation tax (Doi 2010). However, few analyses have applied the DSGE model to a disaster evaluation.…”

Section: Previous Studies and Scientific Inquiriesmentioning

confidence: 99%

Effects of restoration measures from the east Japan earthquake in the Iwate coastal area: application of a DSGE model

Kunimitsu

2017

Asia-Pac J Reg Sci

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Restoration investment after an earthquake and tsunami can improve regional production, but effects of investment emerge differently in production, investment and consumption. Conventional economic models cannot reproduce such chronological nonconformity among economic indices. This study aims to analyze whether the dynamic stochastic general equilibrium (DSGE) model can duplicate the chronological restoration path and nonconformity, and quantifies the efficiency of the restoration measures, such as restoration investment with fund transfer and rebuilding subsidy, in the Iwate coastal region, where the east Japan earthquake hit. The analytical results are as follows: (1) consumption after the earthquake follows a hump-shaped path, where peak point of consumption was delayed from production peak, but then recovered; (2) private investment and labor demand decrease by more than self-restoration does when the restoration measures end; and (3) restoration investment with fund transfer and rebuilding subsidy improves the economy by accelerating the reconstruction of damaged capital stocks, and the benefits of these two measures outweigh their respective costs. These findings show that the influence of an unforeseen and disastrous earthquake can be explained well by the forward-looking decisions on consumption and savings (equal to investment) endogenizing in the DSGE model.

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“…13 Many academic researchers warn that the current debt level in Japan is unsustainable. For example, see Dekle (2003), Doi and Ihori (2009), Doi, Hoshi and Okimoto (2011), Ito, Watanabe and Yabu (2011), Sakuragawa and Hosono (2011 and Hoshi and Ito (2012). Broda and Weinstein (2005) argue that the ratio of government debt to GDP would be stabilized by an increase in tax rates.…”

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confidence: 99%

Public Debt, Economic Growth and the Real Interest Rate: A Panel VAR Approach to EU and OECD Countries

2016

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. 1 Terms of use: Documents in AbstractWe investigate the causal relationship between the public debt to GDP ratio and economic growth for 31 EU and OECD countries from 1995 to 2013. A number of studies have tackled this problem, but very few make the transmission mechanism explicit in their analysis. We estimate a panel VAR model that incorporates the long-term real interest rate on government bonds as a vehicle to transmit shocks in both the public debt to GDP ratio and economic growth. We find no causal link from the public debt to GDP ratio to the GDP growth rate, irrespective of the levels of public debt. Rather, we find a causal relation from the GDP growth rate to the public debt to GDP ratio. In high-debt countries, the direct negative impact of economic growth on public debt is enhanced by a rise in the long-term real interest rate, which in turn decreases interest-sensitive demand and leads to a further increase in the public debt to GDP ratio.JEL Classification Number: E43, H63, O47

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Fiscal sustainability in Japan

Cited by 31 publications

References 19 publications

How Does a Welfare State achieves Fiscal Sustainability? A Study of the Impact of Tax Equity

How Does a Welfare State achieves Fiscal Sustainability? A Study of the Impact of Tax Equity

Effects of restoration measures from the east Japan earthquake in the Iwate coastal area: application of a DSGE model

Public Debt, Economic Growth and the Real Interest Rate: A Panel VAR Approach to EU and OECD Countries

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