Pay-as-you-go social security in a changing environment

In this paper, we examine the optimal pay-as-you-go social security scheme which reallocates resources across generations in a changing environment, that is, with fluctuations in population growth rates and in productivity levels. We use an overlapping generations model along with a social welfare function consisting of the sum of generational utilities either unweighted or weighted by population size and a discount factor. We show how intergenerational resource sharing can be used to improve social welfare even though the extent of intergenerational redistribution is hampered by payroll tax deadweight losses in the spirit of the optimal taxation literature. Also it appears that resource sharing is much more restricted in a closed economy that in an open economy, which is not subject to a national resource constraint at each period of time. This paper was presented at the 1990 ISPE-Conference on the Fiscal Implications of an Ageing Population, Vaalsbroek Castle, Netherlands. The authors wish to thank the participants and particularly B. van Praag and W. Peters for their comments. They also thank the two referees and Philippe Michel for very helpful comments and discussions. The financial support of CIM during his sabbatical year is greatly acknowledged by the second author.     

Portfolio stock adjustment and the real exchange rate: The Dollar-Mark (DM) and Mark-Sterling

The advent of “freely floating” exchange rates in the 1970's coincided with the emergence of what is known as “monetary” or “asset” models of exchange rate behavior where exchange ratesmove to equilibrate demand for stocks of monies. The fundamental monetary model assumes purchasing power parity holds in the long-run, and therefore exchange rates are determined by the same factors that determine relative prices, to wit, money stocks, real incomes, and nominal interest rates. Though early proponents of the monetary view clearly emphasized its long-run nature, empirical testing has by and large neglected this caveat. Thus a model developed for long-run equilibrium exchange rates has instead been tested many times over on short-run equilibrium rates. The latter require a distinct model of their own. This paper develops a short-run equilibrium exchange rate model based on deviations of the short-run exchange rate from its long-run equilibrium. The model differs in that all variables are cast in real terms. It also differs in that the monetary and current account exchange rate versions are shown to be subsets of the more general wealth/portfolio framework used here. The present model considers, in addition to stocks of monies, stocks of foreign assets, and stocks of domestic wealth.     

Mother–Infant Person‐ and Object‐Directed Interactions in Latino Immigrant Families: A Comparative Approach

Cultural variation in durations, relations, and contingencies of mother–infant person‐and object‐directed behaviors were examined for 121 nonmigrant Latino mother–infant dyads in South America, Latina immigrants from South America and their infants living in the United States, and European American mother–infant dyads. Nonmigrant Latina mothers and infants engaged in person‐directed behaviors longer than Latino immigrant or European American mothers and infants. Mother and infant person‐directed behaviors were positively related; mother and infant object‐related behaviors were related for some cultural groups but not others. Nearly all mother and infant behaviors were mutually contingent. Mothers were more responsive to infants' behaviors than infants were to mothers. Some cultural differences in responsiveness emerged. Immigrant status has a differentiated role in mother–infant interactions.