Overlapping-generations model · long run

Who carries a reform across generations

Change the tax on capital or the size of Social Security, and a model of households who work, save and retire over a lifetime finds the new long-run economy and how the burden falls on people of each age.

Model estimate with a wide uncertainty band. The results rest on long-run parameters (patience, how much people work, population growth) that are uncertain, so read them as direction and rough size, not as point estimates. This model is separate from the ten-year scores on Explore and Tailor.

A 55-period Auerbach-Kotlikoff model (ages 21 to 75) with a Cobb-Douglas economy, solved for each steady state and for the 75-year path between them. Capital income tax covers corporate and individual taxes together.