Economics of the Ageing: Generational Accounting and Regional Public Goods in Australia

The ageing of Australia raises many pressing questions for policy makers, not least is the formulation of economic policy that tackles difficult problems of equity and efficiency. Fortunately an embryonic Australian literature already exists that provides a solid basis for rational policy formulation, including the Commonwealth Government's (2002) Intergenerational Report. This paper seeks to add to this nascent literature by developing a model of generational accounting and extending it to incorporate regional public goods. The extended model can assist policy makers concerned with intergovernmental finance in approaching the problems posed by demographic change for Australian fiscal federalism.