Pension Reform, Capital Markets and the Rate of Return

Abstract. This paper discusses the consequences of population aging and a fundamental pension reform – that is, a shift towards more pre‐funding – for capital markets in Germany. We use a stylized closed‐economy, overlapping‐generations model to compare the effects of the recent German pension reform with those of a more decisive reform that would freeze the current pay‐as‐you‐go contribution rate and thus result in a larger funded component of the pension system. We predict rates of return to capital under both reform scenarios over a long horizon, taking demographic projections as given. Our main finding is that the future decrease in the rate of return is much smaller than often claimed in the public debate. Our simulations show that the capital stock will decrease once the baby‐boom generations enter retirement, even if there were no fundamental pension reform. The corresponding decrease in the rate of return, the direct effect of population aging, is around 0.7 percentage points. While the capital market effects of the recent German pension reform are marginal, the rate of return to capital would decrease by an additional 0.5 percentage points under the more decisive reform proposal.     

An Exploratory Comparison of Ethical Perceptions of Mexican and U.S. Marketers

This is a study of the effects of a number of background variables on ethical perceptions of Mexican and U.S. marketers. This research investigates how a marketer’s personal religiousness, relativism, and the ethical values influence in perceptions of the degree of ethical problems in hypothetical marketing scenarios. It also examines differences between Mexican and U.S. marketers on these variables. The results show significant differences in perception between the countries, and we discuss the implications of these differences for cross-cultural business activities. The authors wish to thank Rebecca McLaughlin for her help with data collection in Mexico     

Grund und Grenzen der vorvertraglichen Aufklärungspflicht des Versicherers

Zeitschrift für die gesamte Versicherungswissenschaft - Der Beitrag widmet sich der in Deutschland gängigen Praxis des Versicherungsvertriebs durch Versicherungsagenten. Gefragt wird nach...     

Dynamics in Ownership and Firm Survival: Evidence from Corporate Germany

This study investigates the determinants of changes in corporate ownership and firm failure for German firms. We find that many of the determinants of failure also affect ownership changes in this bank‐based economy. They include poor performance, weak corporate governance, high leverage, and small firm size. The ownership structure also plays a role for both events. Separate analyses of one of these events are therefore likely to miss important effects. The implications for the German corporate governance system are that the differences to countries with more market‐based systems are not as pronounced as previously speculated.     

Dynamics of self-rated health and selective mortality

Self-rated health status (SRHS) is one of the most frequently used health measures in empirical health economics. This article analyzes the first seven waves of the Health and Retirement Study (HRS) and finds that (1) all available lags have decreasing but significant predictive power for current SRHS and (2) SRHS and future mortality are strongly related which leads to a specific selection problem known as survivorship bias. A parsimonious joint model with an autocorrelated latent health component in both the SRHS and the mortality equation is suggested. It is better able to capture the empirical facts than commonly used models including random effects and/or state dependence and better able to correct the survivorship bias than commonly used strategies such as inverse probability weighting.     

Sequential numerical integration in nonlinear state space models for microeconometric panel data

This paper discusses the estimation of a class of nonlinear state space models including nonlinear panel data models with autoregressive error components. A health economics example illustrates the usefulness of such models. For the approximation of the likelihood function, nonlinear filtering algorithms developed in the time‐series literature are considered. Because of the relatively simple structure of these models, a straightforward algorithm based on sequential Gaussian quadrature is suggested. It performs very well both in the empirical application and a Monte Carlo study for ordered logit and binary probit models with an AR(1) error component. Copyright © 2008 John Wiley & Sons, Ltd.     

Die Nachfrage nach Gesundheitsleistungen aus ärztlicher Sicht

Health care costs originate from physician-patient-relationship. It is this unique interrelation which determines mode and extent of diagnostics and therapy, prevention and rehabilitation. The increase in health care costs closely follows increase in gross domestic product (GDP) since decades indicating a basic cost-conscious conduct of both partners. In consequence, there is no uncontrolled or even unlimited increase in health care costs as claimed in public. There is also no need to ration health care services because of economic aspects due to demographic development nor to give up solidarization within social systems. This paper resolves some of common but misguided opinions, analyses health care services from a physician’s point of view and identifies basic but unsolved problems of the German health care system. It demands definition of health by German society and professional clarification of the term medically essential, recommends priority for preventive measures as well as implementation of long standing legal regulations such as rehabilitation prior to nursing.