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| Author: | Groot, O.J. de |
| Title: | Generational accounting in Latvia: time for action |
| Journal: | Baltic journal of economics
2007 : SUMMER/AUTUMN, VOL. 7:1, p. 35-51 |
| Index terms: | accounting fiscal policy Baltic countries Latvia |
| Language: | eng |
| Abstract: | This study aims at analyzing the long-term sustainability of fiscal policy in Latvia. Using a methodology called Generational (here as: gen-al.) Accounting, the net tax burdens of different currently living generations (here as: gens.) are calculated. Then, the residual net tax burden of future gens. is determined. It is found that the current fiscal policy stance is not sustainable. The gen-al. imbalance amounts to about 260 percent of GDP, being near the European average. The necessary fiscal adjustments are relatively small, but still significant. An overall tax increase of 8.5 percent would be required to close the gen-al. gap. In addition, other policy options and alternative scenarios are presented. |
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