THE FAILURE TO PREDICT THE GREAT RECESSION—A VIEW THROUGH THE ROLE OF CREDIT

Much has been written about why economists failed to predict the latest crisis. Reading the literature, it seems that this crisis was so obvious that economists must have been blind not to see it coming. We approach this failure by looking at one of the key variables in this analysis, the evolution of credit. We compare the conclusions reached in the recent literature with those that could have been drawn from an ex‐ante analysis. We show that the effect of credit on the business cycle cannot be exploited from a policymaker's point of view.     

Precautionary saving in Spain during the great recession: evidence from a panel of uncertainty indicators

The aim of this paper is to empirically study the effect of uncertainty on private consumption using a sample of Spanish households, and therefore, to test the existence of a precautionary motive for saving. Using data provided by the Spanish Survey of Household Finances and the Labour Force Survey we construct several uncertainty measures that are commonly used in the literature and an additional indicator based on job insecurity data, and we consequently estimate different econometric models under the life-cycle/permanent income hypothesis, including these measures of uncertainty. Our results are twofold: first, we find evidence in favour of the precautionary saving hypothesis. Secondly, we find that, unlike other variables related to the performance of the labour market (such as the unemployment rate) the job insecurity indicator is an appropriate variable to approximate income uncertainty in any macroeconomic context.     

Individual Pension Plans in Spain: How Expected Change in Future Income and Liquidity Constraints Shape the Behavior of Households

Understanding the motives that underlie Spaniards’ retirement saving decisions is important because many, if not most, future retirees will need to rely on personal savings to maintain a decent standard of living. The governor of the Bank of Spain has stated recently that the current public pension system will not guarantee an adequate pension to the citizens, advising to save now for retirement. In this debate on public pensions, and the complementary role that private pensions might play in Spain, this article has shed light on the decision of Spanish households to engage in individual pension plans and it has identified which factors determine the total amount saved in such retirement plans. Using micro data from the Bank of Spain (Survey of Household Finances 2011), the analysis has revealed that the expectations of lower future income, along with preferences for the financial risk and education, exert an important influence on the likelihood of enrolling in a private pension plan. University education minimizes the myopic behavior of households in the sense of making them more forward-looking and cautious in the face of their future well-being. Additionally using Heckman’s methodology to correct for the problem of selection bias, our results have revealed that liquidity constraints affect negatively the total amount of money saved for retirement.     

The Determinants of Retail Productivity: A Critical Review of the Evidence

This paper discusses the literature on the established determinants of productivity in the retail sector. It also draws attention to some neglected strands of research which provide useful insights into strategies that could allow productivity enhancements in this area of the economy. To date, very few attempts have been made to integrate different specialisms in order to explain what drives productivity in retail. Here this paper rectifies this omission by putting together studies from economics, geography, knowledge management and employment studies. It is the authors’ view that quantitative studies of retail productivity should focus on total factor productivity in retailing as the result of competition/composition effects, planning regulations, information and communications technology, the multinational operation element and workforce skills. Further, the fact that retail firms possess advantages that are transferable between locations suggests that investment in strategies enhancing the transfer of explicit and tacit knowledge between and within businesses are crucial to achieve productivity gains.     

Does Child Gender Predict Older Parents’ Well-Being?

Inconsistencies in comparisons of older parents’ well-being with that of older, childless adults may be resolved by considering the separate effects of sons and daughters on parents. The hypothesis was that older parents of only daughters have greater life satisfaction, more satisfying relations with their children, more intimate family relations, and greater social support satisfaction compared to older childless adults and parents of only sons. Childless older adults were predicted to have more intimate friends. The effect of having both sons and daughters was also explored. Longitudinal results indicated parents had greater life satisfaction than childless adults, and parents of daughters were more satisfied with relations with their children than parents of only sons. Childless adults had more relations with friends and fewer family intimate relations. Neither social support satisfaction or affect varied across groups. The findings are related to gender socialization, social support, and normative expectations.     

The sibling relationship as a housing alternative to institutionalization in later life

The nature of the sibling relationship in middle and later life and the potential of living with a sibling as an alternative to institutionalization when independent living may no longer be possible was assessed using interviews with a random sample of 41 persons 56 to 84 years of age. Forty-nine percent of the respondents had lived with a sibling in adulthood usually for more than one year and over one-half would consider living together again. Men were somewhat more likely to have lived with a sibling in adulthood than were women. When a sibling went to live with another sibling, it was to a sister's home in 90 % of the cases. Almost none had previously considered living with a sibling in later life but ranked living with a sibling second to living in a nursing home and ranked it comparably with living with children. When asked directly their willingness to live with a sibling in later life, respondents were almost equally divided. Age, number of children, educational level, and a feeling of closeness particularly in middle age were found to be moderately correlated with willingness to live with a sibling.Dolores Cabic Borland earned a Ph.D. from Texas Women's University in Sociology and is presently an Associate Professor in Family and Child Ecology at Michigan State University. Dr. Borland's current research interests include middle age and sibling relationships in middle age and later life.This research was supported in part by a grant from the Michigan State University Foundation, Grant # (ORD 26081) and parts were presented at the 1986 National Council on Family Relations Annual Conference. Requests for reprints should be sent to Dolores Cabic Borland, Ph.D., Department of Family and Child Ecology, Michigan State University, East Lansing, Michigan 48824-1030.     

Differences between actual and perceived student norms: an examination of alcohol use, drug use, and sexual behavior

Researchers in the social norms area have previously focused primarily on alcohol consumption, paying comparatively less attention to drug use and sexual behavior. The major purposes of this study were to (1) compare perceptions of peer norms in the areas of alcohol use, drug use, and sexual behavior with actual behavior and (2) determine if a relationship existed between a student's perceptions of normative behavior and a student's actual behavior. Participants were 833 college students at a large, public university in the Northeast. Study participants overestimated alcohol use, drug use, and sexual behavior among their peers. There was also a positive relationship between actual behavior and perceived peer norms, although the effect sizes for all behaviors were small to moderate. The authors provide further support for the tenets of social norms theory and suggest that social norms interventions are appropriate both campus-wide and to targeted high-risk groups.