The ABCs of nonfinancial defined contribution (NDC) schemes

Nonfinancial defined contribution (NDC) pension schemes have been successfully implemented since the mid‐1990s in a number of European countries such as Italy, Latvia, Norway, Poland and Sweden. The NDC approach features the lifelong contribution–benefit link of a financial defined contribution (FDC) personal account scheme, but is based on the pay‐as‐you‐go (PAYG) format. At its start out, the PAYG commitments of the preceding defined benefit (DB) system are converted into individual personal accounts, allowing for a smooth transition from the DB to the DC format, while avoiding the very high transition costs inherent in a move from a traditional PAYG DB scheme to a fully funded FDC scheme. The NDC approach implemented by the rule book is able to manage the economic and demographic risks inherent to a pension scheme and, by design, creates financial sustainability. As in any pension scheme, the linchpin between financial stability and adequacy is the retirement age; in the NDC approach the individual retirement age above the minimum age is by design self‐selected and by incentives should increase the effective retirement age in line with population ageing. As a systemic reform approach NDC has become a strong competitor to piecemeal parametric reforms of traditional nonfinancial DB (NDB) schemes. While frequent, these reforms are far from transparent and usually too timid and too late to create financial sustainability while providing adequate pensions for the average contributor. This article offers a largely non‐technical introduction to NDC schemes, their basic elements and advantages over NDB schemes, the key technical frontiers of the approach, and the experiences of NDC countries.     

Assessing the pension reform potential of a notional defined contribution pillar

Abstract As some of the limitations of the traditional pay‐as‐you‐go defined benefit public pension model have become more evident in recent years, pension experts have begun searching for alternative models. The notional defined contribution model, also financed on a pay‐as‐you‐go basis, has emerged as one of the major new approaches. Drawing on evidence from schemes in six countries (Sweden, Italy, Poland, Latvia, Kyrgystan and Mongolia), this article aims to describe the notional defined contribution model and to review its strengths and limitations relative to the major alternatives, the pay‐as‐you‐go defined benefit model and the funded defined contribution model. A four‐pillar pension model is proposed.     

Notional defined contribution pensions with public reserve funds in ageing economies: An application to Japan

Several developed and developing countries have recently adopted a notional defined contribution (NDC) approach to old‐age pension reform. The NDC is essentially a non‐pre‐funded defined contribution retirement system, in which contributions are credited with a “rate of return” related to aggregate payroll growth, and individual account accruals are maintained in a book‐keeping system. Payouts are annuitized based on the expected mortality of each succeeding retiring cohort. NDC plans may be identified with appropriately calibrated Pay‐As‐You‐Go plans in demographic equilibrium, but the two paradigms diverge when demographic shift is introduced. This paper investigates the key actuarial and economic implications of alternative NDC rules, with a particular focus on Japan, the world's most rapidly ageing economy. We examine the potential role for pension reserves in transitioning to an NDC system, and we show these can be used to smooth the impact of demographic transition to an older society. Finally, we show that countries such as Japan could elect to use pension reserves accumulated in the past to facilitate the transition to an NDC system.     

A “Swedish” actuarial balance for a notional defined contribution pension scheme with disability and minimum pension benefits

This article proposes a “Swedish” type actuarial balance sheet (ABS) for a notional defined contribution (NDC) scheme with disability and minimum pension benefits. The proposed ABS splits the pension system in two parts: the pure NDC part and the redistributive part, which includes the assets and liabilities originating from non‐contributory rights. The article contains a numerical example that sheds light on the real applicability of our proposal. The model has practical implications that could be of interest to policy‐makers, given that it integrates actuarial and social aspects of public pensions and discloses the real cost of redistribution through minimum pensions.     

Equilibrium as compatibility of plans

This paper uses a game-theoretic framework to formalize the Hayekian notion of equilibrium as the compatibility of plans. To do so, it imposes more structure on the conventional model of strategic games. For each player, it introduces goals, goal-oriented strategies, and the goals’ probabilities of success, from which players’ payoffs are derived. The differences between the compatibility of plans and Nash equilibrium are identified and discussed. Furthermore, it is shown that the notion of compatibility of plans, in general, differs from the notion of Pareto efficiency. Since the compatibility of plans across all players can rarely be achieved in reality, a measurement is introduced to determine various degrees of plan compatibility. Several possible extensions and applications of the model are discussed.

     

The return of the political in social work

This article is a follow-up to our article 'Revisiting social work as art' and in part a response to Karen Healy's reply [both published in IJSW 17(2)]. It is, however, also a significant extension of this material since it engages with more general concerns about the critical project that is intrinsic to social work. Social work is not just about self-foundation based on knowledge, values and skills formation, but also about self-assertion. Crucially, it is through this notion of self-assertion that social work can be best understood as an agent of change. This transformative aspect of social work is our central focus. We are not concerned with structural conditions of power and domination but with theorising what a transformative politics would look like for social work using the lens of the French political philosopher Alain Badiou as a conceptual medium for permitting the return of the political for social work.     

The effect of the rescue plans and the need for policies to increase economic growth

This paper evaluates the economic impact of discretionary fiscal and monetary actions taken in the United States during 2020 and 2021. The fiscal actions are The Coronavirus Aid, Relief, and Economic Security Act, or the “CARES” Act, passed in March 2020; The Consolidated Appropriations Act, passed in December 2020; and The American Rescue Plan Act, passed in March 2021. The paper focuses on the impact of the “economic impact payments” that underlie these fiscal actions. The paper also examines discretionary monetary policy actions taken during the same period. The overall implication is that there is a need to return to policies that increase economic growth and stability, including rules-based fiscal and monetary policy, rather than to continue with these one-time discretionary actions.     

The ambiguity of social return policies in the Netherlands

Social procurement policies, which aim to create employment opportunities for vulnerable groups, such as the long‐term unemployed and the disabled, have become increasingly popular in recent years. Despite their growing popularity, empirical research on this topic is limited. Combining insights from the social policy and public administration literatures, we explore the development and implementation of “social return” policies by the Dutch government. These policies are a form of social procurement that require private employers to spend a percentage of public tenders to hire individuals far removed from the labor market. Social procurement appears, by definition, to be a form of social investment. However, our analysis of the ideas underlying its use in the Netherlands suggests that significant contradictions exist, with evidence of neoliberal New Public Management tendencies, social investment, and the more recent form of public administration, New Public Service. Using extensive document analysis of parliamentary documents, discussions and evaluative reports from 2008 to 2014, we reveal the tensions inherent in the Dutch approach and discuss possible implications for our understanding of social policy and administration as well as social protection.     

An evaluation of alternative fiscal adjustment plans: The case of Italy

What advice can be given to the policymaker to reduce the burden of public debt after a crisis? In this situation, the debt consolidation calls for fiscal surplus based on increases in taxes and/or reductions in public spending. This paper aims at answering to the above question. Specifically, it evaluates different policy options on the table using the estimated model of the Italian dynamic General Equilibrium Model (IGEM). Our main message is that plans aimed at reducing the public debt based on tax increases rather than expenditure reductions are more effective. Therefore, consolidation should be designed on the former.     

A Romerian contribution to the empirics of economic growth

Mankiw, Romer, and Weil (1992) made the Solovian set up widely used to test the determinants of economic growth and the speed of convergence. In accordance with the nature of the Solow framework, almost all empirical growth studies considered technological progress constant and identical across countries and over time, and hence underemphasized its role. In this study, in order to overcome this weakness, we propose that the Mankiw, Romer, and Weil (1992) set-up should be replaced by the Solovianized Romer (1990) framework, thus allowing the role of technology to be considered in the empirical analysis. In particular, within this framework, the growth rate of technology varies across economies and over time. We estimate the convergence equation derived from Solovianized Romer model for 31 OECD countries for the period 1980–2008 by applying the system GMM approach. The empirical findings of the model support the conditional convergence hypothesis, but reveal a lower convergence rate than that predicted by the existing literature. As a policy implication, we argue that, investment in R&D and human capital are important determinants of convergence, and in cases where economies are unable to allocate sufficient resources to R&D, policy makers should ease the diffusion of technology (e.g., via FDI or trade) in order to retain a high convergence rate.     

The contribution of mother-father-child interactions to children's emotion narratives

Parents' sensitivity during interactions with their children has been associated with children's emotion narratives elicited using story completion tasks, but almost all of this research focused on mothers and was based on a dyadic, parent-child focus. The goal of the present study was to expand this research by studying triadic, mother-father-child interactions and their associations with children's narratives. Seventy-one families with their 4.5-year-old children were observed in the Lausanne Trilogue Play (LTP) procedure to assess Family Cooperation, and children were administered the MacArthur Story-Stem Battery (MSSB) to assess Coherence, Parental Representations, and Engagement with the task. Regression analyses indicated that controlling for children's Narrative Competence and Effortful Control, children who were part of more cooperative family interactions produced narratives that were more coherent, and they were more engaged during the task. No associations were found with children's representations of parents. Directions for future studies as well as clinical implications are discussed.     

试论日本政府干预日元汇率和操纵汇率之嫌

日本政府从20世纪70年代至2004年一直干预日元汇率。由于日元汇率的走势基本上是升值,因此,日本政府干预汇市的目的在于阻止日元升值,为日本产品的出口提供有利条件,结果导致日元汇率被低估和经常账户顺差。日本政府是干预汇市的积极实践者,理应被看作操纵汇率的国家,但其却在国际上挑起了人民币汇率的问题。美国是对我国人民币汇率升值施加压力最大的国家,但对日本政府干预汇率却听之任之。美国的不同做法只能说明向人民币汇率施压是政治问题,符合美国的国家利益。     

The likelihood of various stock market return distributions, part 2: Empirical results

The present article shows how Bayesians should shift beliefs among a family of models concerning the probability distribution of daily changes in the Standard & Poor 500 Index, given a particular sample. The preceding article in this issue showed that classical (R.A. Fisher, Neyman-Pearson) inference can be highly misleading for Bayesians, as can the assumption of a diffuse prior. The present article discusses how to bound Bayesian shifts in belief for compound hypotheses generally, as well as the specific shifts in beliefs among simple and compound hypotheses implied by the particular sample.     

The likelihood of various stock market return distributions, part 1: Principles of inference

This is the first of two articles which apply certain principles of inference to a practical, financial question. The present article argues and cites arguments which contend that decision making should be Bayesian, that classical (R. A. Fisher, Neyman-Pearson) inference can be highly misleading for Bayesians as can the use of diffuse priors, and that Bayesian statisticians should show remote clients with a variety of priors how a sample implies shifts in their beliefs. We also consider practical implications of the fact that human decision makers and their statisticians cannot fully emulate Savage's rational decision maker.     

商品房市场空置问题分析

目前,理论界对我国的住宅空置率问题存在许多争论,一部分人将国际空置率和国内空置的概念相混淆,得出了不甚科学的结论.科学界定空置率的合理范围,能对我国住房市场的空置状况做出正确判断.     

The contribution of the clean development mechanism to national climate policies

The clean development mechanism (CDM), one of the flexible mechanisms of the Kyoto Protocol, has not received noticeable attention in the applied modeling literature. In this paper we develop a policy-oriented trading model explicitly including the key features likely to influence the supply and demand of CDM projects. This model allows us to evaluate the contribution of the CDM to climate policies at the national level. With an application to Belgium we show that the CDM could reduce the cost of the Kyoto Protocol by a factor 10. Policy analyses reveal that some features (e.g. the market share) have much more influence on this result than others (notably the transaction costs). Moreover, equilibrium effects can sometimes exceed direct effects so that, all in all, a larger domestic abatement could be justified by the desire to reduce what we call carbon dependence. Policy implications and perspectives for the CDM are discussed.     

人民币汇率走势的实证分析

影响汇率有三个指标:外国直接投资,贸易依存度和消费价格指数利用ADF检验、协整检验和误差修正模型进行实证分析,在我国经济环境下:人民币升值是合理的;浮动汇率的实施基本是合理的;但政策往往是有滞后性的,我国当前实行的浮动汇率仍处于过渡时期。     

金融危机下汇率变动对失业率变动的相关性研究

在当前国际金融危机下,汇率对经济的影响,已从直接的进出口贸易行业深入到了其他非贸易性的行业;汇率的波动,在一定程度上,也影响到了宏观经济的波动,进而使得国家的投资、产出和消费受到了影响,这种传导机制最终会带来就业的冲击。通过对最新数据的线性回归分析发现,当前主要国家(地区)汇率的波动性对失业产生重要影响。     

Medicine and the paradigm of Neo-pragmatism a contribution to medical decision theory

Summary The epistemological paradigm of Systematic Neo-Pragmatism, supported by the author, is closely connected with the (semiotic-) pragmatical notion of model. The latter is expounded, and the models in medicine are characterised on the basis of flow charts and correlation-diagrams of the process of diagnosis. Furthermore, the neo-pragmatic concept of medicine is developed and it is shown how medicine is to be defined as a science of action. Finally, a holistic notion of reality in medicine is presented for which the interaction of subject and object as well as the unity of knowledge and action is important.This article is the revised version of a lecture delivered by the author at a symposium held at the Medizinische Universitätsklinik (university hospital), Cologne, 1 October 1982. The lecture has been published in German in Modelle und Realitäten in der Medizin, ed. R. Gross (Stuttgart-New York: Schattauer, 1983, pp. 7–22). For the present publication, the material has been brought up to date. I wish to thank Professor Gross, the editor of Modelle und Realitäten and the publishing house of Schattauer for their kind permission to reprint translated passages from this volume.