1. IG Index (or something like that) AM

2. Aging and transfers Population aging has two important effects on transfer systems – The balance between inflows and outflows as captured by the fiscal support ratio for the public sector. – The intergenerational effect of the transfer system as measured by transfer wealth.

3. Motivation An important feature of any ig transfer system is that it shifts resources across age groups. How can we measure this feature of an ig transfer system? How can we explain its importance to economists, demographers, public policy experts, and reporters?

4. Lee arrows provides an elegant approach that is well known to all of us. Can we adapt this approach to summarizing the ig feature of transfers in “real time”? For any set of current transfer inflows and outflows, we can calculate: – Mean ages of the inflows and the outflows – Magnitude of the flow (per capita or relative to total consumption or GDP, for example).

5. Possible index Based on current values. Measures the extent to which public transfers influence the age of consumption. Can be calculated for any component of the reallocation system. Transfer wealth relative to consumption under idealized conditions First order condition for maximizing SRG.

6. An Interesting Property Assumes net transfers to ROW are zero. Each component measures the contribution to achieving the age pattern of consumption as summarized by the mean age of consumption. Golden rule growth w_Yl = 1 and so Ac-Ayl equals the other three additive components.

7. Graph of Yl index vs AC NTA Countries Impact of aging on lifecycle and reallocation system Upward reallocations are needed as Ac rises.

8. IG Index for public and private transfers, NTA countries

9. Projected public transfer index Notes: Unconstrained projection of public transfer inflows and outflows. Based on transfers as a share of GDP rather than total consumption. Preliminary.