The Budgetary Cost and Welfare Effect of Tax-Deferred Retirement Saving Accounts

  title={The Budgetary Cost and Welfare Effect of Tax-Deferred Retirement Saving Accounts},
  author={Shinichi Nishiyama},
In this paper, we construct a dynamic general-equilibrium overlapping-generations model with heterogeneous households and analyze the macroeconomic, budgetary, and welfare effects of introducing tax-deferred retirement saving accounts similar to the U.S. 401(k) plans. We solve the model for equilibrium transition path to show both the long-run and short-run effects under several different financing assumptions. If we ignored the budgetary cost, tax-deferred accounts would surely increase… CONTINUE READING


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