About

Laurence J. Kotlikoff is the William Fairfield Warren Professor of Economics at Boston University. His work encompasses a wide range of global, national, and personal policy issues, including climate change and carbon taxation, the global macroeconomic transition and the future of economic power, inequality, fiscal progressivity, and the use of economics to guide personal financial behavior. He also focuses on banking reform, marginal taxation and labor supply, healthcare reform, and social security. Professor Kotlikoff is recognized for his contributions to the field of economics as a Fellow of the American Academy of Arts and Sciences, a Fellow of the Econometrica Society, and a Research Associate of the National Bureau of Economic Research. His academic background includes a PhD from Harvard University. He is actively involved in teaching and research at Boston University, contributing to the advancement of economic policy analysis and education.

Research topics

• Political Science
• Computer Science
• Natural resource economics
• Economics
• Market economy
• Microeconomics
• Ecology

Selected publications

• Can Carbon Taxes Make Every Generation Better Off Worldwide?

  2026-01-01

  article1st authorCorresponding

  Can a carefully designed carbon tax really deliver climate protection and equal welfare gains across countries and generations?

  PublisherDOI

• Are Macro Shocks Second Order?

  SSRN Electronic Journal · 2026-01-01

  preprintOpen accessSenior author
  PublisherDOI

• Pink and Poverty Taxes on Marriage

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access
  PublisherDOI

• The future of global economic power

  Oxford Review of Economic Policy · 2025-01-01 · 1 citations

  article

  Abstract The global economy’s enormous region-specific demographic, technological, and fiscal changes raise five major questions. First, which regions will come to dominate the world economy? Second, will regional levels of per capita GDP converge? Third, will high saving rates in fast growing regions lead to a global capital glut? Fourth, does ageing augur far higher tax rates in particular regions? Fifth, will automation materially influence development? This paper develops the Global Gaidar Model, a 17-region, 2-skills, 100-period overlapping generations (OLG) model, to address these questions. The model is carefully calibrated to 2017 UN demographic and IMF fiscal data. Productivity growth and its interaction with demographic change are the main drivers of future economic power. Fiscal conditions and automation matter, but are secondary factors. Our baseline simulation, which sets future productivity based on each region’s long-term record, predicts China and India becoming the world’s largest two economies with 27.0 and 16.2% of 2100 world GDP, respectively. The respective end-of-century US and Western European global GDP shares are just 12.3 and 11.9%. Our baseline also features an evolving global savings glut, major reductions in the world interest rate, substantial ageing-related increases in tax rates, and permanent differences in regional living standards. Automation, captured by a rising capital share, makes little difference to our results. But assumed productivity growth does. If recent productivity continues and demographic projections prove accurate, India will account for one-third of world output in 2100 and China for over one-fifth. The US output share will grow slightly, while that of other developed countries will shrink dramatically. Under more econometrically sophisticated, if seemingly less plausible projections, productivity growth in China and India dramatically slows, leaving China’s plus India’s 2100 output share at only 16%, but, remarkably, Africa’s at an astounding 17 per cent.

  PublisherDOI

• Studying Generational Risk in a Large‐Scale Life‐Cycle Model

  Journal of money credit and banking · 2025-07-29

  articleSenior author

  Abstract We construct an 80‐period OLG model with aggregate shocks to study the size of generational risk and its mitigation via Social Security under different calibrations commonly considered in the literature. Our main findings are that generational risk is small or modest if one calibrates shocks to the volatility of macro aggregates and that Social Security exacerbates that risk. Calibrations that overstate the variability of macro aggregates generate substantially more generational risk, which Social Security can meaningfully mitigate. Finally, we find no support for the view that intergenerational policy can deliver Pareto improvements when safe interest rates run below the average growth rate. In our model, such policies entail welfare losses from crowding out that swamp oblique risk‐mitigation schemes.

  PublisherDOI

• “No One Can Borrow” – Reassessing the “Junior Can’t Borrow” Equity-Premium Puzzle Resolution

  National Bureau of Economic Research · 2025-10-01

  reportOpen accessSenior author

  Junior Can't Borrow," Constantinides, Donaldson, and Mehra's (CDM) three-period exchange model, eliminates borrowing by the young, and, consequently, all generations to resolve the equity premium puzzle.This paper examines CDM's resolution in an 80-period, OLG model with capital, fiscal policy, macro shocks and steeply rising borrowing costs.Imposing such costs on all generations and, thereby, eliminating the bond market produces, as in CDM, a large premium.But permitting even one generation to sell bonds without transactions costs dramatically raises the safe rate, restoring the puzzle.Hence, "No One Can Borrow" not "Junior Can't Borrow" is CDM's real message.Since zero or low marginal-cost borrowing is commonplace -be it via secured borrowing or friends and family loans, CDM's "solution" isn't plausible.As in representative-agent RBCs, macro risk is low in OLG-RBCs -not because aggregate shocks are small, but because they can be hedged via self-insurance (saving) and largely average out over agents' lifetimes.Indeed, absent high marginal borrowing costs, agents, even older ones, are close to indifferent between holding shares and holding bonds, rendering their net bond demand (supply) curves highly elastic.This explains why even a single generation is willing to supply significant amounts of bonds at a low price (high yield).

  PublisherDOI

• Measuring What Matters: Why Italy May Be in Better Fiscal Shape than the US

  National Bureau of Economic Research · 2025-10-01

  reportOpen access

  This study uses fiscal gap accounting (FGA) and generational accounting (GA) to compare US and Italian fiscal solvency.FGA and GA incorporate all government outlays and receipts, whether put on or kept off the books.FGA measures, in the form of reduced net outlays, the constant share of each future year's GDP needed to balance the government's intertemporal budget.GA calculates the lifetime net tax rate -lifetime taxes divided by lifetime labor earnings --facing future generations if current generations pay nothing more, on net, than current policy mandates.Deficit accounting suggests that Italy's 135 percent debt-to-GDP ratio places it in worse fiscal shape than the US with its 123 percent ratio.But on a fiscal-gap basis, Italy appears in far better shape regardless of the discount rate used.Based on the theoretically appropriate rate -the average real return to national wealth, the U.S. fiscal gap is 7.4%.Italy's is 4.0%.These requisite solvency adjustments are far larger if delayed or if the UN's more pessimistic demographic projections prevail.Neither country can expect future generations, on their own, to cover their government's red ink.Doing so requires levying lifetime net tax rates, in each country, that exceed 100%.

  PublisherDOI

• “No One Can Borrow” – Reassessing the “Junior Can’t Borrow” Equity-Premium Puzzle Resolution

  SSRN Electronic Journal · 2025-01-01

  preprintOpen accessSenior author
  PublisherDOI

• Inflation’s Fiscal Impact on American Households

  NBER Macroeconomics Annual · 2025-07-01 · 1 citations

  article
  PublisherDOI

• Measuring What Matters: Why Italy May Be in Better Fiscal Shape than the US

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access
  PublisherDOI

Frequent coauthors

• Alan J. Auerbach

  University of California, Berkeley

  278 shared

• Jagadeesh Gokhale

  University of Pennsylvania

  139 shared

• Felix Kübler

  133 shared

• Johannes Brumm

  112 shared

• Xiangyu Feng

  Xiamen University

  110 shared

• Andrey Polbin

  Financial University

  88 shared

• Sabine Jokisch

  86 shared

• Hans Fehr

  University of Würzburg

  80 shared

Education

• Ph.D.

  Harvard University

Awards & honors

• Fellow of the American Academy of Arts and Sciences
• Fellow of the Econometrica Society
• Research Associate of the National Bureau of Economic Resear…