Optimal maintenance of multi-component systems: a review

In this article we give an overview of the literature on multi-component maintenance optimization. We focus on work appearing since the 1991 survey "A survey of maintenance models for multi-unit systems" by Cho and Parlar. This paper builds forth on the review article by Dekker et al. (1996), which focusses on economic dependence, and the survey of maintenance policies by Wang (2002), in which some group maintenance and some opportunistic maintenance policies are considered. Our classification scheme is primarily based on the dependence between components (stochastic, structural or economic). Next, we also classify the papers on the basis of the planning aspect (short-term vs long-term), the grouping of maintenance activities (either grouping preventive or corrective maintenance, or opportunistic grouping) and the optimization approach used (heuristic, policy classes or exact algorithms). Finally, we pay attention to the applications of the models.literature review;economic dependence;failure interaction;maintenance policies;grouping maintenance;multi-component systems;opportunistic maintenance;maintencance optimization;structural dependence

Differentiating Indexation in Dutch Pension Funds

We investigate numerically how indexation of funded pensions for inflation can be differentiated across the various groups of fund participants. The pension arrangement is modelled after the Dutch situation. While the aggregate welfare consequences are small, group-specific consequences are more substantial with the workers and future born losing and retirees benefitting from a shift away from uniform indexation. Those welfare shifts result from systematic redistribution of welfare rather than shifts in the benefit of risk sharing provided by the system.indexation, funded pensions, welfare effects, pension buffers, stochastic simulations

Optimal Unemployment Insurance and Voting

The framework of a general equilibrium heterogeneous agent model is used to study the optimal design of an unemployment insurance (UI) scheme and the voting behaviour on unemployment policy reforms. In a first step, the optimal defined benefit and defined replacement ratio UI systems are obtained in simulations. Then, the question whether switching to such an optimal system from the status quo would be approved by a majority of the voters is explored. Finally, the transitional dynamics following a policy change are analysed. Accounting for this transition has an important influence on the voting outcome.insurance, heterogeneous agents, job search, voting, human capital

Optimal Unemployment Insurance in a Search Model with Variable Human Capital

The framework of a general equilibrium heterogeneous agents model is used to study the optimal design of an unemployment insurance scheme and the voting behaviour on unemployment policy reforms. Agents, who have a limited lifetime and participate in the labour market until they reach the retirement age, can either be employed or unemployed in each period of their working life. Unemployed agents receive job offers of different (match) qualities. Moreover, unemployed agents suffer a decline of their individual productivity during unemployment, whereas the productivity of employed agents increases over time. Any form of unemployment insurance must take into account an important trade-off. On the one hand, generous benefits are desirable as they provide good insurance of the risk-averse agents against unforeseen income fluctuations (caused by layoffs and the randomness of individual job offers). On the other hand, high benefits induce a moral-hazard problem, as certain groups of agents choose to decline job offers that, while not being as attractive as the unemployment benefit from an individual point of view, a central planner would make them accept. An optimal unemployment insurance scheme is one that maximizes the expected lifetime utility of a newly born agent. Two types of unemployment insurance are considered, one with defined benefits and one with defined replacement ratios. A numerical version of the model is calibrated to the West German economy and simulated at ½-monthly frequency, resulting in an agent’s life-span of 1440 periods. The welfare maximising unemployment insurance scheme is determined in simulations. Under this optimal system, no payments are made to short-term unemployed agents. Long-term unemployed receive rather low (social assistance level) benefits, the optimal level of which depends on the assumed degree of risk aversion. Defined benefit systems provide a higher welfare than defined replacement ratios. I then address the question whether the majority of population would support the optimal system given the status quo. It turns out that older or unemployed agents tend vote in favour of the status quo, whereas young employed agents would approve the reform. If voters can choose between keeping their current unemployment system and jumping to the equilibrium associated with the optimal policy, there is a slight majority of just above 50% for the optimal policy. Finally, a more realistic case is considered, in which voters do not choose between the long-rung equilibria associated with policy changes, but take into account the transition process to the new equilibrium. The adjustment process of the macro environment after the policy reform is computed for a time span of sixty years. As some of the relevant variables adjust very slowly to their new long-run equilibrium values, the effect of the transition process on voting behaviour cannot be neglected

Preventive replacement for belligerent systems

A mortar is commonly used as an indirect firing weapon to support close fires with a variety of ammunition. There are mortar weapons with various shells. Each type of shells fired by mortars does damage to a weapon when the total damage on a mortar weapon reaches the tolerance limit, the mortar weapon either fails or explodes, leading to a compulsory replacement which is costly. In order to maintain the mortar weapons and archers in wars, a research was conducted to find the best number of mortar shells that will be fired until a preventive replacement for mortar weapons is implemented

Aging and Pensions in General Equilibrium: Labor Market Imperfections Matter

This paper re-examines the effects of population aging and pension reforms in an OLG model with labor market frictions. The most important feature brought about by labor market frictions is the connection between the interest rate and the unemployment rate. Exogenous shocks (such as aging) leading to lower interest rates also imply lower equilibrium unemployment rates, because lower capital costs stimulate labor demand and induce firms to advertize more vacancies. These effects may be reinforced by increases in the participation rate of older workers, induced by the higher wage rates and the larger probability of finding a job. These results imply that neglecting labor market frictions and employment rate changes may seriously bias the evaluation of pension reforms when they have an impact on the equilibrium interest rate.overlapping generations, search unemployment, labor force participation, aging, pensions, labor market

The Un-Intended Convergence: How the Finnish Unemployment Reached the European Level

The Finnish unemployment rose in the early 1990’s from three to eighteen percent in four years. Unemployment has then decreased to the average European level, being 8.5 percent in October 2002. In this paper, we describe the shocks leading to this unforeseen increase in unemployment. We then discuss the role of labour market institutions in the adjustment process that has brought unemployment back to ‘normal’ levels. We argue that these institutions cannot be blamed for the increase in unemployment, but that more flexible institutions could have lead to a more rapid decline in unemployment.unemployment, labour market institutions

Labour market institutions and labour market performance: A survey of the literature

This paper presents a selective survey of the recent literature on labour market institutions. It describes the different empirical approaches used to explore the nexus between labour market institutions and labour market performance. It stresses that the effect of institutions is complex in both stock and flow models and that it is also crucial to take into account the interactions they generate among themselves and with macroeconomic shocks.labour market performance, labour market institutions, redistributive policies, unemployment dynamics, Arpaia, Mourre