Improving Sweden's Automatic Pension Adjustment Mechanism

The public pension world has seen two innovations in recent years. One is the emergence of notional defined contribution (NDC) plans. The other is the introduction of automatic adjustment mechanisms to help keep pension systems solvent when the economy weakens. This brief looks at the Swedish system to demonstrate how NDCs work and evaluates the work­ings of the automatic adjustment mechanism in the wake of the 2008 financial crisis. Sweden passed reform legislation in 1994 that in­troduced a partially-funded NDC plan.1 The arrange­ment is conceptually similar to a defined contribution plan in that contributions are accumulated in indi­vidual accounts, but different in that the accounts are not fully funded and may be financed entirely on a pay-as-you-go basis. In this setting, the rate of return credited on the account assets is based on a rule rath­er than on actual returns. The Swedish system uses a notional interest rate equal to the rate of growth of average earnings. However, if a calculation suggests a potential deficit, the notional interest rate is auto­matically reduced through a “brake” mechanism. The recent financial crisis has highlighted ways in which the brake mechanism could be improved. This brief proceeds as follows. The first section describes Sweden’s NDC plan. The second describes the Swedish brake mechanism. The third describes two problems with the current adjustment procedure: 1) it creates the likelihood of large shocks for retir­ees; and 2) while disadvantaging retirees, it tends to advantage workers. The fourth section presents pos­sible fixes for the current problems. The final section concludes that the Swedish NDC plan could function more effectively with modest changes to the brake mechanism.

Trajectories of university adjustment in the United Kingdom: Emotion management and emotional self-efficacy protect against initial poor adjustment

Little is known about individual differences in the pattern of university adjustment. This study explored longitudinal associations between emotional self-efficacy, emotion management, university adjustment, and academic achievement in a sample of first year undergraduates in the United Kingdom (N=331). Students completed measures of adjustment to university at three points during their first year at university. Latent Growth Mixture Modeling identified four trajectories of adjustment: (1) low, stable adjustment, (2) medium, stable adjustment, (3) high, stable adjustment, and (4) low, increasing adjustment. Membership of the low, stable adjustment group was predicted by low emotional self-efficacy and low emotion management scores, measured at entry into university. This group also had increased odds of poor academic achievement, even when grade at entry to university was controlled. Students who increased in adjustment had high levels of emotion management and emotional self-efficacy, which helped adaptation. These findings have implications for intervention

Demand for labour inputs and adjustment costs : evidence from Spanish manufacturing firms

This paper examines the structure of the adjustment costs for heterogeneous labour inputs, allowing for asyrnmetries and for interaction effects in adjustment costs. To do this, an intertemporal model underlying firm's employment decisions is postulated, and the resulting Euler equations for the demands of permanent nonproduction (white collar) and production (blue collar) employees are estimated using a sample of Spanish manufacturing firms. The main results confirm the heterogeneity of adjustment costs for permanent employees, and the existence of significant cross-adjustment effects. This latter result implies that marginal adjustment costs from firing permanent production employees can be reduced if temporary workers are hired at the same time. However, there is not significant evidence of asyrnmetric adjustment costs in permanent labour inputs

Distributed Bundle Adjustment

Most methods for Bundle Adjustment (BA) in computer vision are either centralized or operate incrementally. This leads to poor scaling and affects the quality of solution as the number of images grows in large scale structure from motion (SfM). Furthermore, they cannot be used in scenarios where image acquisition and processing must be distributed. We address this problem with a new distributed BA algorithm. Our distributed formulation uses alternating direction method of multipliers (ADMM), and, since each processor sees only a small portion of the data, we show that robust formulations improve performance. We analyze convergence of the proposed algorithm, and illustrate numerical performance, accuracy of the parameter estimates, and scalability of the distributed implementation in the context of synthetic 3D datasets with known camera position and orientation ground truth. The results are comparable to an alternate state-of-the-art centralized bundle adjustment algorithm on synthetic and real 3D reconstruction problems. The runtime of our implementation scales linearly with the number of observed points.Comment: 9 page

Asymmetric and non linear adjustment in the revenue expenditure models

The purpose of this paper is to empirically analyse the revenue-expenditure models of public finance by considering the possibility of non-linear and asymmetric adjustment. A long-run relationship between general government expenditure and revenues is identified for Italy. Following system-wide shocks, the estimated relationship adjusts slowly to equilibrium, mainly due to complex administrative procedures that add to the sluggishness of tax collection and undermine the effective monitoring of public spending. Exogeneity of public expenditure implies that taxes rather than spending, carry the burden of short-run adjustment to correct budgetary disequilibria. Allowing for non-linear adjustment and the possibility of multiple equilibria, our findings show evidence of asymmetric adjustment around a unique equilibrium. In particular, we find that when government expenditure is too high, adjustment of taxes takes places at a faster rate than when it is too low. Further, there is evidence of a faster adjustment when deviations from the equilibrium level get larger, pointing to a Leviathan-style, revenue-maximiser government

Non-linear and non-symmetric exchange-rate adjustment: new evidence from medium and high inflation countries

This paper analyses a model of non-linear exchange rate adjustment that extends the literature by allowing asymmetric responses to over- and under-valuations. Applying the model to Greece and Turkey, we find that adjustment is asymmetric and that exchange rates depend on the sign as well as the magnitude of deviations, being more responsive to over-valuations than under-valuations. Our findings support and extend the argument that non-linear models of exchange rate adjustment can help to overcome anomalies in exchange rate behaviour. They also suggest that exchange rate adjustment is non-linear in economies where fundamentals models work well

Moderating effect of gender and age on the relationship between emotional intelligence with social and academic adjustment among first year university students

This study examined whether emotional intelligence is significantly correlated with social adjustment and academic adjustment. It also explored the moderating effects of gender and age factors and their linked between emotional intelligence and social adjustment as well as academic adjustment among first year university students. 289 first year university students (148 males and 141 females) at the Irbid Govern Orate, North of Jordan, participate in the study and were categorized based on two age groups, younger students between the age of 18 – 25 and older students between the range of 26 and above. Two valid and reliable instruments were used to assess student’s emotional intelligence, social adjustment and academic adjustment. Correlation and multi-group analysis using structural equation model were used to analyse these data. The result shows no significant relationship between emotional intelligence and of both social adjustment and academic adjustment. In addition, the moderating effect of gender was not found. However, the moderating effect of age on the relationship between emotional intelligence with social adjustment and academic adjustment were established