Finland 1990-2005 - A Time of Challenge and Preparation
Romppanen, Antti (1991-01-01)
Romppanen, Antti
Valtion taloudellinen tutkimuskeskus VATT
01.01.1991
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi-fe2018042618577
https://urn.fi/URN:NBN:fi-fe2018042618577
Tiivistelmä
The title of the publication "Finland 1990-2005 - A Time of Challenge and Preparation" shows the main features of the report. The international economic integration, the growing global and local environmental problems, and the changes in the population age structure are the main starting points in this long term scenario for the Finnish economy.
Finland will adapt to the international division of labour through the European cooperation. Because the labour input will diminish and the growth rate of labour productivity will be somewhat slower than in the past, the growth of total production will remain about 2,5 per cent per year.
The prevention of environmental damages will be the greatest challenge for the world economy. More effective international cooperation in environmental issues is necessary. Tighter environmentan standards and higher energy taxes will raise the real price of energy thus making energy intensive products more expensive and leading to structural changes in production.
In order to decrease the net foreign debt a bigger part of investments must be financed from domestic sources that at the present, In the long run, the change in the population age structure, the improving pension security and the diminishing need to save for housing can keep the households' saving ratio low. If the saving of households will continue to remain low, the saving in the employment pension funds and the public sector saving must be kept on a high level.
The growth of public expenditures can be slower than in the past because of a favourable age structure of the population. During the next 15 years, public expenditures can be financed within the recent tax rate. However, the pressure on public sector expenditures will increase after the year 2005 when the expenditures on pensions and senior citizens' services begin to increase sharply. This requires growing efforts in raising the efficiency of the public sector during this decade.
Finland will adapt to the international division of labour through the European cooperation. Because the labour input will diminish and the growth rate of labour productivity will be somewhat slower than in the past, the growth of total production will remain about 2,5 per cent per year.
The prevention of environmental damages will be the greatest challenge for the world economy. More effective international cooperation in environmental issues is necessary. Tighter environmentan standards and higher energy taxes will raise the real price of energy thus making energy intensive products more expensive and leading to structural changes in production.
In order to decrease the net foreign debt a bigger part of investments must be financed from domestic sources that at the present, In the long run, the change in the population age structure, the improving pension security and the diminishing need to save for housing can keep the households' saving ratio low. If the saving of households will continue to remain low, the saving in the employment pension funds and the public sector saving must be kept on a high level.
The growth of public expenditures can be slower than in the past because of a favourable age structure of the population. During the next 15 years, public expenditures can be financed within the recent tax rate. However, the pressure on public sector expenditures will increase after the year 2005 when the expenditures on pensions and senior citizens' services begin to increase sharply. This requires growing efforts in raising the efficiency of the public sector during this decade.
Tutkimusteema
Energy, Energia, Environment, Ympäristö, International comparisons, Kansainväliset vertailut, Labour market, Työmarkkinat, Taxation and Social Transfers, Julkisen talouden rahoitus ja tulonsiirrot
JEL
A300 - Multisubject Collective Works: General, F000 - International Economics: General, J000 - Labor and Demographic Economics: General, Q400 - Energy: General, Q500 - Environmental Economics: General
Avainsanat
long-term development, international economy, environment, public sector