Dependent children and aged parents: funding education and social security in an aging economy

In the last few decades in the United States birth rates have declined and longevity has risen while productivity growth has slowed. Given such changes, the increasing burden of funding programs for the elderly is likely to shift resources away from the young and toward the elderly. This paper uses an overlapping generations framework to examine the effects of tax policies on an aging economy. We find that if the quality of the education system is sufficiently high then shifting tax resources away from social security and toward education is both growth and welfare enhancing.Education ; Social security

The effects of annuities, bequests, and aging in an overlapping generations model of endogenous growth.

In this paper, we examine the effects of introducing actuarially fair annuity markets into an overlapping generations model of endogenous growth. We find the complete annuitization of agents' wealth is not, in general, dynamically optimal; that the degree of annuitization that is dynamically optimal depends nonmonotonically on the expected length of retirement and on the pay-as-you-go social security tax rate. We find that the government has an incentive to restrict the availability of actuarially fair annuities contracts, and that it can often move the economy from a pay-as-you-go to a fully-funded social security system via voluntary contributions to a government sponsored, actuarially fair pension today accompanied by reductions in social security taxes tomorrow.Wealth ; Old age

Aging, myopia and the pay-as-you-go public pension systems of the G7: a bright future?

The public pension systems of the G7 countries were established in an era when the number of contributors far outweighed the number of beneficiaries. Now, for each beneficiary there are fewer contributors, and this trend is projected to accelerate. To evaluate the prospects for these economies we develop an overlapping generations model where growth is endogenously fueled by investments in physical and human capital. We analyze individuals' behavior when their expectations over their length of life are rational or myopic and examine whether policies exist that can offset the effects of aging, should they be adverse. We find that while perfectly anticipated aging is welfare improving and does not threaten the solvency of public pension systems, myopia worsens welfare, puts pension systems at risk, and cannot be easily remedied by public policy.Social security

Reforming Social Security: a welfare analysis

Social security ; Welfare

A simple model of international capital flows, exchange rate risk, and portfolio choice

This paper examines international capital flows in the context of a simple Diamond-Dybvig model in which there are neither moral hazard nor adverse selection problems, thus isolating exchange rate risk as the propagator of capital flows. The model shows that adverse changes in exchange rate expectations can result in "hot money" flows even when a bank's balance sheet is perfectly transparent and its assets have a positive net present value in local currency terms. The model also indicates that foreign deposit guarantees even in the absence of a change in the bank's portfolio can increase the chance of bank runs.Capital movements ; Foreign exchange

The effects of aging and myopia on the pay-as-you-go social security systems of the G7

The Social Security systems of the G7 countries were established in an era when populations were young and the number of contributors far outweighed the number of beneficiaries. Now, for each beneficiary there are fewer contributors, and this downward trend is projected to accelerate. To evaluate the prospects for these economies we develop an overlapping generations model in which growth is endogenously fueled by individuals' investments in physical and human capital and by the government's investment in human capital via public education expenditures. We analyze individuals' behavior when their expectations over their length of life are rational and adaptive (myopic). We examine for each of the economies and for each of the expectation assumptions whether policies exist that can offset the effects of aging, should they be adverse. Further, we examine how policies aimed at a specific target group affect the welfare of the economy as a whole.Social security ; Group of Seven countries

Looking ahead: long-term prospects for Africa's agricultural development and food security

"Sub-Saharan Africa is the only developing region in the world where food insecurity has worsened instead of improved in recent decades. In this discussion paper, Mark W. Rosegrant, Sarah A. Cline, Weibo Li, Timothy B. Sulser, and Rowena A. Valmonte-Santos show that this discouraging trend need not be a blueprint for the future. The research contained in this discussion paper was conducted in preparation for the IFPRI 2020 Africa conference “Assuring Food and Nutrition Security in Africa by 2020: Prioritizing Actions, Strengthening Actors, and Facilitating Partnerships,” held in Kampala, Uganda, April 1–3, 2004. The authors examine the implications of several different policy scenarios based on IFPRI's International Model for Policy Analysis of Agricultural Commodities and Trade (IMPACT). This model, developed at IFPRI in the early 1990s, has been continually updated to incorporate more food sectors and geographic regions. In this paper, the authors use IMPACT to assess the consequences of a wide range of policy and investment choices for Africa, including a business as usual scenario (continuation of current policy and investment trends through 2025), a pessimistic scenario (declining trends in key investments and in agricultural productivity), and a vision scenario (improving trends in investments and hence in agricultural productivity and human capital), as well as scenarios for more effective use of rainfall in agriculture, reduced marketing margins, and three different scenarios for trade liberalization. The wide variation in results reveals how much these choices will matter. For example, the number of malnourished children under five years old in Sub-Saharan Africa in 2025 is projected to be 38.3 million under business as usual, 55.1 million under the pessimistic scenario, and 9.4 million under the vision scenario. It is our hope that this research will clarify the steps needed to help stimulate the actions contributing to approaching the vision scenario. " From Foreword by Joachim von BraunImpact model, Food insecurity, Forecasting, Agricultural productivity, Human capital, Malnutrition in children,

Separable mechanisms underlying global feature-based attention

Feature-based attention is known to operate in a spatially global manner, in that the selection of attended features is not bound to the spatial focus of attention. Here we used electromagnetic recordings in human observers to characterize the spatiotemporal signature of such global selection of an orientation feature. Observers performed a simple orientation-discrimination task while ignoring task-irrelevant orientation probes outside the focus of attention. We observed that global feature-based selection, indexed by the brain response to unattended orientation probes, is composed of separable functional components. One such component reflects global selection based on the similarity of the probe with task-relevant orientation values ("template matching"), which is followed by a component reflecting selection based on the similarity of the probe with the orientation value under discrimination in the focus of attention ("discrimination matching"). Importantly, template matching occurs at similar to 150 ms after stimulus onset, similar to 80 ms before the onset of discrimination matching. Moreover, source activity underlying template matching and discrimination matching was found to originate from ventral extrastriate cortex, with the former being generated in more anterolateral and the latter in more posteromedial parts, suggesting template matching to occur in visual cortex higher up in the visual processing hierarchy than discrimination matching. We take these observations to indicate that the population-level signature of global feature-based selection reflects a sequence of hierarchically ordered operations in extrastriate visual cortex, in which the selection based on task relevance has temporal priority over the selection based on the sensory similarity between input representations

Facing alternative futures: prospects for and paths to food security in Africa

"Food security in Africa has substantially worsened since 1970. Although the proportion of malnourished individuals in Sub-Saharan Africa has remained in the range of 33–35 percent since around 1970, the absolute number of malnourished people in Africa has increased substantially with population growth, from around 88 million in 1970 to an estimate of over 200 million in 1999–2001. Yet this discouraging trend need not be a blueprint for the future. New research from IFPRI shows that the policy and investment choices of African policymakers and the international development community can make an enormous difference for Africa's future agricultural production and food security. By modeling the results of a number of different policy scenarios in Africa through the year 2025, we show that the number of malnourished children, one important indicator of food security, could rise as high as 41.9 million or fall as low as 9.4 million. These scenarios, therefore, shed light on the effectiveness of various policies and investments in assuring a food-secure future for Africa.' from TextFood insecurity, Forecasting, Agricultural productivity, Human capital, Malnutrition in children, Impact model,

Thoracic and lumbar vertebral bone mineral density changes in a natural occuring dog model of diffuse idiopathic skeletal hyperostosis

Ankylosing spinal disorders can be associated with alterations in vertebral bone mineral density (BMD). There is however controversy about vertebral BMD in patients wuse idiopathic skeletal hyperostosis (DISH). DISH in Boxer dogs has been considered a natural occurring disease model for DISH in people. The purpose of this study was to compare vertebral BMD between Boxers with and without DISH. Fifty-nine Boxers with (n=30) or without (n=29) DISH that underwent computed tomography were included. Vertebral BMD was calculated for each thoracic and lumbar vertebra by using an earlier reported and validated protocol. For each vertebral body, a region of interest was drawn on the axial computed tomographic images at three separate locations: immediately inferior to the superior end plate, in the middle of the vertebral body, and superior to the inferior end plate. Values from the three axial slices were averaged to give a mean Hounsfield Unit value for each vertebral body. Univariate statistical analysis was performed to identify factors to be included in a multivariate model. The multivariate model including all dogs demonstrated that vertebral DISH status (Coefficient 24.63; 95% CI 16.07 to 33.19; p < 0.001), lumbar vertebrae (Coefficient -17.25; 95% CI -23.42 to -11.09; p < 0.01), and to a lesser extent higher age (Coefficient -0.56; 95% CI -1.07 to -0.05; p = 0.03) were significant predictors for vertebral BMD. When the multivariate model was repeated using only dogs with DISH, vertebral DISH status (Coefficient 20.67; 95% CI, 10.98 to 30.37; p < 0.001) and lumbar anatomical region (Coefficient -38.24; 95% CI, -47.75 to -28.73; p < 0.001) were again predictors for vertebral BMD but age was not. The results of this study indicate that DISH can be associated with decreased vertebral BMD. Further studies are necessary to evaluate the clinical importance and pathophysiology of this finding