Savings,pension rights and taxation

Summary The voluntary saving rate has declined in The Netherlands over the last thirty years. In this paper the increasing share of transfer income in total income, with a high propensity to consume, and the increase in collective pension schemes are simultaneously used to explain this development. Furthermore, the influence of taxes is modelled. The planning horizon of the representative consumer is treated as a parameter to be estimated. The planning horizon obtained (about 4.5 years) appears to be short compared to expected residual lifetime, implying rather small interest elasticities. The estimation results indicate that, in case the obligatory pension schemes are diminished, the representative consumer offsets the loss in pension benefits for 75 per cent by voluntary, additional accumulation of nonhuman wealth in the long run. The working of the model is illustrated by simulation experiments.I wish to thank two anonymous referees, Prof. J. Pen, G.M.M. Gelauff, J.J. Graafland, W. Vossers and other colleagues of the CPB for their helpful comments.     

Stock market volatility,the news,and monetary policy

The dynamic relationship linking the volatility of equity prices with “the news” and the expected path for monetary policy is investigated. Previous results that link the impact of the news about real activity to changes in current and future interest rates are employed in developing a positive link between changes in volatility and the news. Empirically, our results uncover a positive and statistically significant response of the CBOE volatility index, VIX, to unanticipated changes in employment, but not to inflation. Hence, agents' expectations for the policy response to news have an important influence on the expected volatility of stock prices. (JEL E44, E52)     

Resource allocation in a general equilibrium model of production under uncertainty: The case of variable supply of labor

This paper examines the effects of a marginal change in uncertainty on resource allocation and factor rewards by relaxing the assumption of factor inelasticity. We demonstrate that integrating a variable labor supply into Batra's two-sector uncertainty model can mitigate or reverse many of the earlier results. Specifically, a marginal increase in uncertainty may trigger the resource to move from the certainty sector to the uncertainty sector in the presence of a backward-bending labor supply curve.     

An empirical note about estimation and forecasting Latin American Forex returns volatility: the role of long memory and random level shifts components

Portuguese Economic Journal - A set of RLS-type models with ARMA and ARFIMA dynamics is estimated and compared in a forecasting exercise with ARFIMA, GARCH and FIGARCH models. It is an extension of...     

Determinants of women's financial inclusion: Evidence from India

A number of studies have analyzed the determinants of financial inclusion in India, but few if any have focused specifically on the factors that shape women's access to finance. This paper draws on the trove of women-specific data collected in the fourth round of the National Family Health Survey (NFHS-4), conducted in 2015–16 in India, to examine the factors that influence women's access to finance. The results indicate that while the forces that shape women's access to finance function at multiple levels, micro-level factors appear to be powerful drivers of inclusion. The analysis reveals that household-level economic indicators like wealth, gender of household head and their rural-urban location are crucial, but so are individual-level characteristics which explain approximately 83% of the variation in the multilevel regressions. Informal gender norms that govern women's mobility and economic activity crucially influence the ability of women to access loans and open bank accounts.     

Conjectural variations, symmetric equilibria and economic policy

In this paper, we consider conjectural variations in a simple static general equilibrium model under oligopolistic competition. The modeling of conjectures captures the role played by beliefs in a micro-founded model. So, the economy may have three kinds of symmetric general equilibria. Furthermore, these equilibria can be Pareto-ranked by the conjectural variation parameter. Finally, we consider the implementation of a tax on the strategic behaviors in case of balanced-budget rule. The comparative statics illustrates the idea according to which the effectiveness of the multiplier mechanism to mitigate the market distortions depends on the symmetric equilibrium considered. Therefore, the effect of the tax on the prices and economic activity depends on the degree of market power which is conjectured by the agents.     

Individual self-control and collective outcomes: An examination of cigarette addiction and taxes

Can individual self-control problems affect policy variables? And if so, through what type of channels? Building on recent literature in political economy, we explore a specific channel that allows for links between individual addiction and state taxes. We develop a theoretical lobbying model to explain the role of addiction in the political process of cigarette taxation. Our model shows that equilibrium cigarette taxes are determined by the average addiction level in society, corruption, and their interaction. Our results suggest a potential impact of individual self-control issues in the process of government policy.     

A path analytic model of store loyalty involving self-concept,store image,geographic loyalty,and socioeconomic status

A model is introduced which posits that store loyalty is primarily determined by store-image evaluation and shopping-complex loyalty. Store image-evaluation, in turn, is hypothesized to be determined, to a major extent, by self-image/store-image congruity, and shopping-complex loyalty by area loyalty and socioeconomic status. The model was tested using a path analytic procedure and the results were consistent with the model. A replication study was attempted and the results reinforced the validity of the proposed model.