On Stochastic Generational Accounting
Part of the inheritance we leave to future generations is the (positive or negative) public net wealth. Depending on the country, the positive wealth may include roads, bridges, office buildings, hospitals, universities, natural parks etc. Such items resemble durable goods in that they depreciate at a relatively predictable rate.
In addition to state and municipalities, the public sector (or the general government) includes institutions that manage statutory pensions and unemployment and disability insurance. In Finland, most of the latter institutions are privately owned but they are included in the general government according to the national accounts standard. They own publicly traded stocks and other types of financial wealth. In some countries, such as Finland and Norway, the state also owns such assets.
KeywordsGross Domestic Product Pension System Predictive Distribution Portfolio Policy Population Forecast
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