Laurence Kotlikoff

Laurence Jacob Kotlikoff (born January 30, 1951) is a professor of economics at Boston University, a William Warren Fairfield Professor at Boston University, a Fellow of the American Academy of Arts and Sciences, a Research Associate of the National Bureau of Economic Research, a Fellow of the Econometric Society, and a former Senior Economist on the President's Council of Economic Advisers.

Kotlikoff has made contributions in the fields and subfields of generational economics, fiscal policy, computational economics, economic growth, national saving, intra- and intergenerational inequality, sources of wealth accumulation, intergenerational altruism and intra-family risk sharing, banking reform, carbon taxation, and personal finance.

He has also done work on Social Security, healthcare, tax, banking reform, inequality within and across generations, fiscal progressivity, carbon policy, and the potential risks of government Ponzi schemes even when a government safe interest rate is routinely lower than its growth rate.

Kotlikoff is a public intellectual.

His columns have appeared in the New York Times, the Wall Street Journal, Bloomberg, Forbes, the PBS NewsHour, the Financial Times, the Boston Globe, Yahoo, CNBC, and other major outlets.

Kotlikoff is a frequent guest on numerous podcasts and radio shows.

He is routinely quoted by the media on a wide range of economic issues.

Over the years, Kotlikoff has testified to Congress on tax reform, generational policy, and other economic issues on 19 occasions.

In the late 1970s, Kotlikoff, together with Berkeley economist, Alan J. Auerbach, developed the first large-scale computable general equilibrium life-cycle model that can track the behavior, over time, of economies comprising large numbers of overlapping generations.

The Auerbach-Kotlikoff model is widely used by economists to study the transition paths of closed as well as open economies as well as the dynamic impact of fiscal and other policies.

A relatively recent incarnation of the Auerbach-Kotlikoff model is a paper by Hans Fehr, Sabine Jokisch, and Laurence Kotlikoff entitled "Dynamic Globalization and Its Potentially Alarming Prospects for Low-Wage Workers," includes five regions (the U.S., Europe, Japan, China, and India), six goods, region-specific fiscal policy and demographics, and the endogenous determination of the pattern of specialization..

The most recent use of the Auerbach-Kotlikoff model has been to study, together with economists Felix Kubler, Andrey Polbin, and Simon Scheidegger, the economics of carbon change, particularly the optimal uniformly welfare-improving carbon-tax policy.

This is the carbon tax cum side payments that produces the highest uniform welfare gain for all current and future generations in all regions of the world.

In 1984, Kotlikoff wrote a fundamental paper entitled "Deficit Delusion", which appeared in The Public Interest.

This was the first of a series of papers and books (see, e.g., Generational Accounting and Generational Policy) by Kotlikoff, including work with co-authors, showing, via examples, that in economic models featuring rational agents, "the" deficit is a figment of language, not economics.

I.e., the deficit is not economically well defined.

Instead, what governments measure as "the" deficit is entirely a result of the language they use to label government receipts and payments.

If the government calls a receipt a "tax," this lowers the reported deficit.

If, instead, it calls the receipt "borrowing," it raises the reported deficit.

In 1991, Kotlikoff, together with Alan Auerbach and Jagadeesh Gokhale, produced the first set of generational accounts] for the United States.

Their study claimed to find a major fiscal gap separating future government spending commitments and its means of paying for those commitments, portending dramatic increases in the lifetime net tax burdens facing young and future generations.

The generational accounting and fiscal gap accounting developed by Auerbach, Gokhale, and Kotlikoff is a means of assessing the sustainability of fiscal policy and how different countries intend to treat their progeny.

Recent generational accounting by the IMF and fiscal gap accounting by Kotlikoff claim to confirm the truly severe long-run fiscal problems facing the U.S.

Kotlikoff attempted to run for President of the United States in the 2012 election, and sought the nominations of the advocacy group Americans Elect and the Reform Party of the United States before ending his campaign in May 2012 when Americans Elect ceased operations.

Kotlikoff ran for president in 2016 as an independent alongside his vice president, Dr. Edward Leamer, a renowned economist at UCLA.

He achieved ballot-access in 38 states, making him one of only six people in the country that could be legally elected president.

His campaign garnered major press from Bloomberg, The Wall Street Journal, The Boston Globe, and other major outlets.

Kotlikoff's stated goal in running for president was to provide an economics-based policy-reform platform.

After the 2016 election, Kotlikoff released his platform on his kotlikoff.net website in the form of a monograph entitled, You're Hired!

Kotlikoff's thesis examined, in a life-cycle simulation model, the impact of intergenerational redistribution on the long-run position of the economy.

He also studied whether the rich spend a larger or smaller share of their lifetime resources than do the poor.

And he provided a new empirical approach to understanding the impact of Social Security on saving.

At UCLA, Kotlikoff wrote a paper with Avia Spivak on intra-family risk-sharing entitled "The Family as an Incomplete Annuities Market."

He also wrote a widely cited paper with Lawrence Summers questioning the importance of saving for retirement in determining total U.S. wealth accumulation.

The publication suggested that most of U.S. wealth accumulation was not attributed to life-cycle saving, but rather to private intergenerational transfers (whether intended or unintended).

The article was the subject of a lively debate between Kotlikoff and Franco Modigliani, who won the Nobel Prize in part for his work on the life-cycle model.

Kotlikoff, together with Alan Auerbach and Jagadeesh Gokhale, pioneered Generational Accounting, which measures the fiscal burdens facing today's and tomorrow's children.

Kotlikoff's work on the relativity of fiscal language claims to show that conventional fiscal measures, including the government's deficit, are not well defined from the perspective of economic theory.

According to Kotlikoff, their measurement reflects economically arbitrary fiscal labeling conventions.

He argues that an "Economics labeling problem," as he calls it, has led to gross misreadings of the fiscal positions of different countries, starting with the United States, which has a relatively small debt-to-GDP ratio, but, he argues, is in worse fiscal shape than any other developed country due to its unofficial, i.e., off-the-books, obligations.