Measuring the Welfare Costs of Inflation in a Life-cycle Model

In macroeconomics, life-cycle models are typically used to address exclusively life-cycle issues. This paper shows that modeling the life-cycle may be important when addressing public policy issues, in this case the welfare costs of inflation. In the representative agent model, the optimal inflation rate is characterized by the Friedman rule: deflate at the real interest rate. In the corresponding life-cycle model, the optimal inflation rate is quite high: for the benchmark calibration, it is around 95% per annum. Much of the paper is concerned with understanding this result. Briefly, in the life-cycle model there are distributional consequences of injecting money via lump-sum transfers. The net effect is to transfer income from old, rich agents to young, poor ones. These transfers twist the age-utility profile in a way that agents find desirable from a lifetime utility point of view. A second issue concerns how to assess the costs of inflation in a life-cycle model. Metrics that are equivalent in the representative agent model can give very different answers in a life-cycle model.monetary policy, inflation, welfare costs, life-cycle model

Simplified Estimation of Seismic Life-Cycle Costs

Most seismic risk assessments for economic decision-making of commercial buildings are based on a risk metric called probable maximum loss (PML) that is associated with losses from an earthquake shaking severity with a 500-year return period. For various reasons, PML is a poor metric for economic performance assessment. This paper introduces an analogous measure, the probable frequent loss (PFL), defined as the mean loss resulting from shaking with 10% exceedance probability in 5 years (an approximately 50-year event). It overcomes many of the problems of PML, and offers the advantage that expected seismic life-cycle costs and expected annualized loss are approximately proportional to PFL through a seismic hazard coefficient that depends on site characteristics, fundamental period, and damage shaking threshold, and can be tabulated for ready use. A brief review is given of a building-specific seismic vulnerability method that may be used to calculate PFL

Life Cycle Assessment Practices: Benchmarking Selected European Automobile Manufacturers

With the rise of environmental concerns in the general public, re-appropriated by influential politicians, Life Cycle Assessment (LCA) has become a widely used set of tools for the management of all impacts on environment by industrial products. LCA is carried out at the very early stages of product research, development and design. This is particularly true in the automobile industry where vehicle manufacturers Original Equipment Manufacturers (OEMs) are launching several new or re-vamped models each year. The automobile industry is therefore a very emblematic sector for best practices of LCA. The paper is based on available literature and interviews with top LCA professionals in Germany-based OEMsLife cycle assessment; automobile; best practices

Transportation Life Cycle Assessment Synthesis: Life Cycle Assessment Learning Module Series

The Life Cycle Assessment Learning Module Series is a set of narrated, self-advancing slideshows on various topics related to environmental life cycle assessment (LCA). This research project produced the first 27 of such modules, which are freely available for download on the CESTiCC website http://cem.uaf.edu/cesticc/publications/lca.aspx. Each module is roughly 15- 20 minutes in length and is intended for various uses such as course components, as the main lecture material in a dedicated LCA course, or for independent learning in support of research projects. The series is organized into four overall topical areas, each of which contain a group of overview modules and a group of detailed modules. The A and α groups cover the international standards that define LCA. The B and β groups focus on environmental impact categories. The G and γ groups identify software tools for LCA and provide some tutorials for their use. The T and τ groups introduce topics of interest in the field of transportation LCA. This includes overviews of how LCA is frequently applied in that sector, literature reviews, specific considerations, and software tutorials. Future modules in this category will feature methodological developments and case studies specific to the transportation sector

Factory Compliance Life Cycle

Nike’s strategy to enforce monitoring and compliance of labor codes in contract factories

A bike ride from cradle to grave : better decision-making by using the life-cycle-costs approach

The life-cycle costs (LCC) approach is used to gain transparency, to compare variants and to have a reliable basis for long-term-budgeting of investments, maintenance and operation with the goal of most favourable total costs of ownership (TCO) for a given level of service for reliability, availability, maintainability, safety, health and environment, functionality, comfort (RAMSHEFC)

Analyzing labour supply of elderly people: a life-cycle approach

In light of the ageing of the Dutch society, policy measures aim at increasing the participation rate of elderly workers, particularly in the age-group between 55 and 64. This paper develops a stylized numerical simulation model. This model describes consumption, savings and labour supply behaviour over the life cycle to analyze the labour-market implications of such proposals. For example, we simulate a shift in the (normal) retirement age from 65 to 67, the elimination of the Social Security premium exemption after age 65, and a premium on first-tier pension benefits if the commencement date of these benefits is postponed. Each of these reforms affect the economic outcomes via wealth effects, income effects and inter- and intratemporal substitution effects. The stylized model offers a profound theoretical underpinning which helps us to understand these policy effects over the entire life cycle of individuals. However, the numerical outcomes should be taken with some caution as the model ignores insights of behavioural economics (such as ‘framing effects’).

The business cycle and the life cycle

The paper documents how cyclical fluctuations in market work vary over the life cycle and then assesses the predictions of a life-cycle version of the growth model for those observations. The analysis yields a simple but striking finding. The main discrepancy between the model and that data lies in the inability of the model to account for fluctuations in hours for individuals in the first half of their life cycle. The predictions for those in the latter half of the life cycle are quite close to the data.Business cycles ; Hours of labor