Macroeconomic Aspects of Private Retirement Programs

Abstract

The decline in importance of private defined benefit plans in relation to defined contribution plans in the United States is a major issue of interest to pension actuaries. This decline has been attributed to numerous factors: costs of government regulation, societal and cultural changes, changed employer attitudes, and employees’ lack of understanding of defined benefit plans. It has also caused some observers to proclaim the end of private defined benefit plans. This paper analyzes possible macroeconomic factors contributing to the crisis of defined benefit plans and proposes an alternative hypothesis for the cause of the crisis: the decline of the relative attractiveness of defined benefit plans in relation to defined contribution plans when these are viewed as investments, that is, as securities in capital markets.     

Credit crunch in a small open economy

We construct an open-economy DSGE model with a banking sector to analyze the impact of the recent credit crunch on a small open economy. In our model the banking sector operates under monopolistic competition, collects deposits and grants collateralized loans. Collateral effects amplify monetary policy actions, interest rate stickiness dampens the transmission of interest rates, and financial shocks generate non-negligible real and nominal effects. As an application we estimate the model for Poland-a typical small open economy. According to the results, financial shocks had a substantial, though not overwhelming, impact on the Polish economy during the 2008/09 crisis, lowering GDP by approximately 1.5 percent.     

Third cumulant for multivariate aggregate claim models

The third cumulant for the aggregated multivariate claims is considered. A formula is presented for the general case when the aggregating variable is independent of the multivariate claims. Two important special cases are considered. In the first one, multivariate skewed normal claims are considered and aggregated by a Poisson variable. The second case is dealing with multivariate asymmetric generalized Laplace and aggregation is made by a negative binomial variable. Due to the invariance property the latter case can be derived directly, leading to the identity involving the cumulant of the claims and the aggregated claims. There is a well-established relation between asymmetric Laplace motion and negative binomial process that corresponds to the invariance principle of the aggregating claims for the generalized asymmetric Laplace distribution. We explore this relation and provide multivariate continuous time version of the results. It is discussed how these results that deal only with dependence in the claim sizes can be used to obtain a formula for the third cumulant for more complex aggregate models of multivariate claims in which the dependence is also in the aggregating variables.     

Comparing nightclub customers’ preferences in existing and emerging markets

This research aims to compare the needs of nightclub and bar customers from two very different markets—the existing and well-established British late-night economy and emerging and developing Polish market by examining customer preferences towards the servicescape and service offerings provided by such venues in both countries. The findings point to the significant similarities and differences between British and Polish club goers, indicating the importance of various elements of the servicescape in influencing customer decisions to enter a venue. These findings can assist mainstream venues in the UK and Poland improve their competitive position by understanding and then providing both groups of customers with service offerings that match their preferences.     

Artists' attitudes to marketing: a cross-cultural perspective

• Although the music industry is dominated by a few global players, the vast majority of musical performances are by nonprofit organisations, self-employed musicians or small and medium enterprises (SMEs). But, while a great deal has been written about the marketing of music—distribution, branding, audience development, etc.—comparatively little is known about the attitudes of musicians themselves to marketing, despite the fact their role as both product and producer is so central to the musical experience.
• The research sets out to gain an understanding of this neglected topic by undertaking a cross-cultural analysis of musicians from two different cultures: it compares the attitudes of artists in a mature, post-industrial economy (UK) with those in a post-communist, emerging democracy (Poland). The research finds that society, culture and the economic environment appear to shape attitudes far less than art itself. Across both cultures the research discovers at best an ambivalence towards marketing, and at worst a general antipathy towards the whole notion of art-as-business.
• The implications of these findings, if replicated across other countries, other musical genres and across the arts as a whole, could be worrying. Historically, the arts have been dominated by nonprofit organisations funded at least in part by public and private subsidies, funds which are being substantially eroded in both mature economies and in developing nations. The challenge for nonprofits and SMEs in the arts, then, is about achieving some sort of engagement with business and marketing, without losing their artistic integrity in the process.

Copyright © 2006 John Wiley & Sons, Ltd.     

For some mothers more than others

We estimate the effect of family size on female labour supply using data from Poland and instrumenting for family size with twinning at first and second birth. To the best of our knowledge, this is the first study to causally address this relationship in a post‐communist country. We identify the average causal effect of an additional child on mother's employment to be ?7.0 pp, but we do not find significant effects of additional children on female employment among families with two or more children. Furthermore, we identify a positive bias of OLS in the estimates among highly educated mothers and those from younger cohorts.