Abstract
In chapter 2 it has been pointed out that implicit and explicit debt, although they have in common the fact that they are based on an obligation, differ quite substantially in the way in which such an obligation is defined. Government unfunded liability is uncertain because it depends on factors which are exogenous (economic growth, population growth, age profile) as well as endogenous to the contractual relationship (decisions about retirement, changes in social security legislation); therefore, no precise definition of such a liability can be included in the contract.
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© 1990 Kluwer Academic Publishers
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Rizzo, I. (1990). The fulfilment of unfunded obligations and the problem of population growth: An application of Baumol’s Law. In: The ‘Hidden’ Debt. Financial and Monetary Policy Studies, vol 19. Springer, Dordrecht. https://doi.org/10.1007/978-94-009-1958-7_4
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DOI: https://doi.org/10.1007/978-94-009-1958-7_4
Publisher Name: Springer, Dordrecht
Print ISBN: 978-94-010-7375-2
Online ISBN: 978-94-009-1958-7
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