Using simulation as a tool in selecting a retirement age under defined benefit pension plans

This paper examines how simulation modeling can be used to select a retirement age under defined benefit pension plans. This approach construes the variables affecting pension benefits as probabilistic variables. Simulations are then run to generate probabilistic values for the real value of pension benefits for alternative retirement ages. By construing variables affecting pension benefits as probability distributions, this approach reflects the uncertainty facing individuals contemplating retirement. By generating estimates of retirement benefits as probability distributions rather than as single deterministic values, the model provides individuals with a more realistic and complete frame of reference for making the retirement decision. The author is grateful to an anonymous referee and Joachim Zietz. JEF editor, for helpful comments.     

HARMFUL TAX COMPETITION?

European governments are currently engaged in an assault on tax havens, to stamp out what they call 'unfair tax competition.' This article examines and rejects the arguments they use to justify this action and shows that tax competition is (like all forms of competition) beneficial, except perhaps as practised by European governments themselves.     

A sustainable state for urban life in poor societies: Bangladesh

Cities in the Third World do not currently have favourable prospects for the future. Their planning is dedicated primarily to coping with pressures of population and infrastructure needs. Any pale imitation of advanced urbanization that they might employ as minimum standards require many times more consumption of energy, water and human time than is available. The concept of a sustainable state for the long term seems unattainable to their policy makers. This exercise seeks a path to a desirable steady state for one of the world's poorest metropolises—Dhaka. This article shows that the essential knowledge, and some experience, already exist which make this transition to sustainability possible, and outlines the crucial features required. Promotion of family planning is assigned the highest priority during the transition, followed by education.     

Financial-market effects of Federal Government budget deficits

Conclusion This paper finds that, for the 30-year period 1955–1984, the federal government budget deficit in the United States had a positive and significant effect on the longer-term nominal interest rate. This finding is at odds with most of the existing literature, which finds federal budget deficits to have no measurable impact upon interest rates in the United States [cf. Evans, 1985; 1987; Hoelscher, 1983; Makin, 1983; Motley, 1983; McMillin, 1986; and Mascaro and Meltzer, 1983]. The difference between the findings here and the findings in these other studies can be traced at least in part to the way in which we specify the deficit variable. That is, we distinguish between thestructural deficit, which approximates theexogenous component of the total deficit, and thecyclical deficit, which represents theendogenous component of the total deficit. By contrast, these other related studies measure the deficit in more aggregated ways, which combine the cyclical deficit with the structural deficit into one variable.