Chapter 1: Interregional Transfers through Public Pension in Canada- In this chapter, I build a regional computable general equilibrium model with an overlapping generations (OLG) structure of the Canadian economy to analyze population aging dynamics and public pensions. Canada is divided into three regions: Atlantic, Quebec and Rest of Canada (ROC). The impact of population aging is investigated on each of three regions' pension systems. The results confirm that as a result of aging all regions are affected negatively if they choose to have an independent pension system. Under a joint pension system most of the pressure of the provision of the pension system is on the ROC. Atlantic region benefits the most from a joint pension plan as the implicit funds ow from ROC to Atlantic region. Quebec benefits from having its own program, but the benefits disappear slowly in future years. Chapter 2: Age-Variable Rate of Time Preference in CGE-OLG Model- Contrary to the mainstream studies in the area of intertemporal optimization that assume a constant rate of time preference over individuals' life cycles, in this chapter I propose a new approach to measure the rate of time preference by assuming that the rate of time preference evolves by age. I construct an overlapping generations model (OLG) and calibrate rate of time preference. The age-variable rate of time preference would permit to capture many other elements that affect the life cycle profile of consumption as observed in the data. The results show that rate of time preference exhibits three phases and is different for young versus old. Chapter 3: Computing Demographic Change Simulation under Constant and Age-variable Rate of Time Preference - This chapter simulates the impact of an aging population on various macroeconomic variables and calculates the cohort welfare as well as social welfare. The outcomes from simulations are dependent on the choice of rate of time preference as well as the structure of the model. The results in this chapter provide a new approach to determining the impact of aging population. The choice of a realistic rate of time preference, which allows its variability by age, affects the cohort welfare noticeably.

Despite abundant studies of the application of pension systems in developed countries, little work has been done on how to apply a sustainable pension system in developing countries. The set-up of pension systems in developed countries and developing countries are expected to be different because in developing countries, labor is concentrated in the informal production sectors, while labor in developed countries is concentrated in the formal production sectors. Informal production sectors are sectors where the government, either central or local government, has little access to implement fiscal policies (taxes and subsidies) on firms and labor. This research develops a comprehensive system on how to set-up pension policies generally in developing countries and specifically in Indonesia. The basic set-up of the pension system suggested in this dissertation is as follows: a short run consumption tax policy to finance a defined benefit plan to support minimum physical needs of the older population, a medium run labor income tax policy to finance individuals' defined contribution fully funded savings plan, and a long run skilled labor creation through university education so that individuals are able to self-finance their own pension savings through the fully funded savings plan. The defined benefit plan is important because it can serve as a societal redistribution tool, while the defined contribution plan serves as a household savings tool. In addition, the skilled labor creation serves as a supporting tool so that the pension program is sustained in the long run. A theoretical model is developed from Auerbach and Kotlikoff overlapping generation (OLG) computable general equilibrium (CGE) model and specified for the Indonesian economy by introducing heterogeneity in households, where skilled and unskilled labor exist. In writing the model in terms of computer language, we apply an approach named mathematical programming system for general equilibrium analysis (MPSGE), developed by Thomas Rutherford. Some parameters used in the model are estimated by using econometric methods. The OLG-CGE model is applied in order to analyze the impact of consumption taxes and pension taxes on labor supply and also to calculate the equivalent variation of the distribution of consumption taxes burden across generations. Meanwhile, the impact of skilled labor creation on economic growth is calculated by applying linear algebra. The main macroeconomy data is taken from the Indonesian social accounting matrix (SAM) year 2000. Meanwhile, labor data are taken from the Indonesian labor conditions 1998-2003. The findings in this dissertation are as follows: for the equivalent variations, the consumption taxes for USD 1, USD 2, and USD 3 cash transfers per day person gave more benefit to the skilled labor than to the unskilled ones. In the meantime, the consumption taxes for USD 1 cash transfer gave incentives to the highest amount of labor, both skilled and unskilled labor, to work in the formal sector. The amount of labor after the consumption taxes for USD 1 cash transfer is higher than the initial condition. Increasing the consumption taxes for the USD 2 cash transfer only decreased the amount of labor work in the formal sector, with the amount of skilled labor decreased more than the unskilled labor. In addition, increasing the consumption taxes for the USD 3 cash transfer would also decrease the amount of labor work in the formal sector, with the amount of unskilled labor decreased more than skilled labor. We also find that the elasticity of government education expenditures on skilled labor creation is roughly 0.3. This means that if the Indonesian central government would like to eliminate the informal sector by 25 percent within 20 years, or an average 1.25 percent annually, they should increase the government education expenditures to 8 percent of total annual government budget. Other findings are that the increase of skilled labor would contribute positively to Indonesian economic growth, while the consumption taxes and the fully funded pension taxes would be likely to reduce current economic growth but increase the future one. Finally, these are the theoretical contributions to public finance literature: first, given dual formal and informal labor sectors present in an economy, where the latter is dominant, taxation of expenditures is preferred to taxation of income because the first may induce labor to work in the formal sector; second, given dual formal and informal labor sectors present in an economy, where the latter is dominant, there exists an optimal rate of consumption taxes that provides incentives for the highest amount of labor, skilled and unskilled labor, to work in the formal sector.

本研究利用台灣2001年資料以Ramsey與OLG假設分別建立區分四部門別與八部門別之動態可計算一般均衡模型，進行「提高間接稅（消費稅、環境稅）、降低直接稅（資本、勞動所得稅）」之稅制改革模擬分析。結果發現若以單一時點比較靜態方式分析可能迥異於動態長期分析結果；其次以Ramsey分析所欠缺的代際分配影響結果在OLG分析中可以察見，特別是進行以消費稅或環境稅替代資本所得稅模擬時；再者OLG因代際傳遞效果可能較Ramsey假設下反應緩慢，故也可觀察到Ramsey模型面對衝擊後若干變數增減幅度會較OLG模型陡峭。最後特別在環境稅替代所得稅模擬中經由替代稅率變化發現，活在初期世代雖可享受所得稅下降好處但卻也面臨排放稅課徵，因此福利水準增減變化不大，惟屆至排放稅課徵瀕至臨界點需使用原所得稅來平衡稅收時，此為另一波必須為減量政策付出代價的時點與世代。 / Based on a thorough comparison of the basic assumptions and economic underpinning of the Ramsey and Overlapping generation (OLG) model, this study builds both static and dynamic computable general equilibrium tax policy models to analyze the effect of tax reform on Taiwan’s economy. The new tax structure considers mainly a replacement of some parts of direct tax - labor and capital income taxes by indirect tax- consumption tax or environment tax. The benchmark year of the model is 2001, and the economy is divided into four and eight sectors. The modeling framework is implemented on top of MPSGE, which is a special module within the General Algebraic Modeling System (GAMS).Our simulation results show differential outcomes for static and dynamic models. The slower speed of transition inherent in OLG model has caused variables such as welfare, capital stock, and replacement consumption tax rate change less than that in the Ramsey model when the tax reform policy is imposed. And the intergeneration effects of different tax burden between young and old generations can be found in the OLG model but not in the Ramsey model. Finally, we find as the income tax rate coming lower and the environment tax going up when simulation of tax replacement, causing the welfare does not change much at the beginning of shock, and generations especially born in the near future when environment tax does not grow and revenue neutrality needs to be meet are another cost payers of abatement policy.

Chapter 1: A Population Aging Analysis for Canada Using the National Transfer Accounts Approach: This analysis develops a new data set for Canada using an accounting methodology called National Transfer Accounts (NTA). NTA permits building an accounting system that introduces age into national accounts. NTA is consistent with the conventional national accounts and allows the estimation of lifecycle patterns for labour income and consumption from private and public sources. It also allows the calculation of per capita and aggregate lifecycle deficits (LCD) or surpluses (LCS) in an economy. In this chapter we calculate Canada’s per capita and aggregate LCD for 2006. Using demographic projections for the next five decades, we present the aggregate LCD in Canada for the period 2006 to 2056 assuming a constant per capital LCD during this time horizon. The projection results show that labour income needs to increase rapidly or consumption needs to be cut significantly to compensate for the pressure on the aggregate lifecycle deficit as a result of population aging. Chapter 2: An Overlapping Generations Computable General Equilibrium (OLG-CGE) Model with Age-dependent Rates of Time Preference: This analysis develops a methodology to introduce an age-dependent rate of time preference to calibrate an OLG-CGE model with per capita age profile consumption path derived from the NTA framework of Chapter 1. The results show that the economic impact from an aging population will be significant. The living standard will decline by 15% from the present to 2050 and decline by 20% by the year 2105. To reduce such a decline, the Canadian government may introduce policies that could encourage labour force participation. We analyze the impact of: a) an increase in the general labour force participation rate for age 20 to 64; b) an increase in the labour force participation rate for workers aged 50 to 64; c) late retirement. Our results suggest that maintaining the current standard of living will be extremely difficult after 2026. Nevertheless, this would help reduce the economic pressure from population aging. Chapter 3: 9/11 Security Measures and North American Security Perimeter: A Computable General Equilibrium Analysis: The objective of this analysis is to assess the impact of the North American Security Perimeter (NASP) on both the Canadian and the U.S. economies. The NASP is a change in Canada-U.S. security paradigm that would allow the liberalization of the post 9/11 security measures at the Canada-U.S. border. This study applies a multi-sector and multi-region general equilibrium model together with econometric analysis. After simulating the NASP, Canada’s capital market was found to become more attractive. Under the NASP, the welfare of Canada is estimated to increase by $19 billion or 1.8% of GDP, and that of the U.S. is estimated to increase by $32 billion or 0.3% of GDP.

本文結合H-O模型與Blanchard(1985)的跨代模型來分析一小型經濟體系實 施永久性進口限額政策之後，對經濟體系中的各個變數之影響。結果發現 在無資本累積模型下，影響經常帳的效果有所得效果與財富效果。而在有 資本累積模型下，影響經常帳的效果則有資產替代效果。