FINANCIAL RESTRUCTURING: IMPACT ON HOUSING

The purpose of this paper is to describe the primary factors that helped encourage the growth of savings and loan business and its development as the primary mortgage originating and investing intermediary. This will be followed by a discussion of how and why changes have been made to alter the sheltered environment of the business. Finally, the paper will focus on several options for the future structure of the savings and loan business and the implications each has on our mortgage delivery system and housing
The paper concludes that the country in general and its housing needs, in particular, would be best served by freeing up the asset and liability powers of thrifts. In order to meet the mortgage finance needs of the country, it is recommended that increased emphasis be put on making mortgages investment grade assets that will be able to compete with other investments for funds in the capital market generally. To do this, the government must refrain from price fixing (i.e., setting specific prepayment penalties, savings rates, etc.); establishing terms and conditions on mortgages (i.e., regulating mortgage forms); changing contractual provisions on mortgages (i.e., due-on-sale prohibitions), and avoiding noncompetitive behavior by government credit programs.     

PROVIDING INCOME SECURITY TO THE ELDERLY: THE ROLE OF PROGRAMS OTHER THAN SOCIAL SECURITY

Social Security retirement benefits have had a dramatic effect on the elderly's economic well-being over the last four decades. Many other facets of federal law have also enhanced the elderly's income security and should not be overlooked, however. Today, the elderly receive income from an amalgam of publicly and privately organized programs and individual provisions. The primary goal of these programs is to provide adequate income to the elderly. While all the major components of this loosely configured system, as we know it now, have evolved in the last 45 years, they have not developed at the same rate. It is important to understand this point because the relative role of the various income sources for future groups of the elderly will be somewhat different than for current ones     

A brief technology assessment of the Carbon Dioxide effect

Significant increases in atmospheric carbon dioxide are occuring as a result of fossil fuel combustion. More than a four-fold increase over preindustrial levels may occur by the year 2100. Heating of the atmosphere, changes in precipitation patterns and global storm paths, and other resulting effects are sure to cause significant social changes. This article is essentially a methodological case study demonstrating a useful but inexpensive type of technology assessment. It summarizes current research findings on “the CO₂ effect,” and presents hitherto unpublished findings that resulted from a brief but systems-oriented approach. These findings suggest that most published forecasts of phenomena associated with a CO₂ buildup may be systematically low because various positive feedback relationships are not reflected.     

Indian women: well-being and survival

The authors examine sex differentials in sustenance and survival in developing countries using the example of India. Lower female life expectancy at birth and the declining ratio of females to males are discussed as evidence of female deprivation. Consideration is given to the feeding, survival, and neglect of female children, to differences in use of medical facilities by sex, and to regional differences by state. This pattern of discrimination is found to persist even in urban areas.     

Reproductive behaviour in peasant societies: a theoretical and empirical analysis

In spite of the concern and repeated attempts to promote population control programs, a coherent and unified theory of peasant reproductive behavior has not emerged. The author attempts to extend the microeconomic foundations of reproductive behavior by considering a dynamic intertemporal model of household production emphasizing survival uncertainty and age specific differences in productive ability. An optimal policy is derived in a single sex model in which decisions are made sequentially based on new information. It is shown that households will follow a stopping rule; the household will continue to reproduce until an optimal number of living children is reached. As a consequence of the stopping rule households will appear to be replacing infant and child deaths if these occurred early in the program. After presenting the model, empirical applications of the theory are explored and the model is estimated using sample survey data collected in Bangladesh in 1977. Issues raised in the analysis are discussed.     

Tests of functional form in dynamic econometric models: Some empirical experience

Econometric theory has provided several rival tests of functional form specifications in economic relations, but there is little empirical experience in using many of them. This note reports some practical applications, and compares the performance of various tests, in specifying dynamic econometric models.     

Income determination in market disequilibrium: The implications of spillover for the design of monetary policy

This paper specifies and analyzes a generalized disequilibrium macroeconomic model that explicitly includes the concept of spillover in nontatonnement financial and real markets. It is shown that the dynamic quantity and expenditure theories of income determination are special cases of the model which depend upon the degree of spillover from the bond to the commodity market. Simulation experiments designed to produce a vigorous monetary shock to the system clearly show that national product is very sensitive to the degree of spillover, and thus, the design of monetary policy within the context of gradual market clearing should consider the size of spillover.     

An asymptotic property of equilibrium on futures markets arising from speculation

This paper presents an asymptotic property of a joint spot-futures market equilibrium established in Cheng-Magill (1982). As speculators diversity over a large number of markets, the equilibrium risk premium converges to an asymptotic premium, the behaviour of which depends solely on the stochastic dependence between the spot price and an index of average returns on other markets. Risk arising from the variability of the spot price itself is diversified away. The results are related to the arbitrage pricing theory of Ross (1976).