GENERATIONAL ACCOUNTS, AGGREGATE SAVING AND INTERGENERATIONAL DISTRIBUTION

Are generational accounts informative about the effect of the budget o n the intergenerational distribution of resources and on aggregate sav ing? First, the usefulness of generational accounts lives or dies with the strict lifecycle model of household consumption. Second, even if the life-cycle model holds, generational accounts ignore the intergene rational redistribution associated with the government's provision of public goods and services and with intergenerational externalities. Th ird, generational accounting ignores the effect of the budget on tax a nd transfer bases and on before-tax and -transfer quantities and price s. That is, it does not handle incidence or general equilibrium reperc ussions.