Working Paper: NBER ID: w21269
Authors: Seth G. Benzell; Eugene Goryunov; Maria Kazakova; Laurence J. Kotlikoff; Guillermo Lagarda; Kristina Nesterova; Andrey Zubarev
Abstract: This paper develops a large-scale, dynamic life-cycle model to simulate Russia’s demographic and fiscal transition under favorable and unfavorable fossil-fuel price regimes. The model includes Russia, the U.S., China, India, the EU, and Japan+ (Japan plus Korea). The model predicts dramatic increases in tax rates in the U.S., EU, India, and Russia. Indeed, the increases are so large as to question their political feasibility let alone their actual collection given the potential for tax avoidance and tax evasion.
Keywords: dynamic lifecycle model; fiscal transition; demographic transition; fossil fuel price regimes; global economy
JEL Codes: F0; F20; H0; H2; H3; J20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| demographic changes (J11) | effective wage tax rates (H29) |
| population aging (J11) | effective wage tax rates (H29) |
| fossil fuel exhaustion (Q31) | effective wage tax rates (H29) |
| raising Russia's fertility rate (J13) | future GDP (E20) |
| fossil fuel rents (Q31) | government revenues (H29) |
| effective wage tax rates (H29) | political feasibility (D72) |