Editors' Summary

macroeconomics, editorial

The Role of Health and Age in Financial Preparations for Later Life

This paper concerns the self insurance preparations that people make for later life. Policy changes to the Canadian pension, old age security, and health care systems mean that the financial preparations that people make are becoming increasingly important as vehicles to economic independence in later life. Data from the Statistics Canada's Survey on Ageing and Independence are used to investigate the role of health and age in the financial preparations that households make for later life including contributions to RRSPs, savings, other investments, major purchases and access to company pension plans. Data are analyzed using logistic regression. Findings indicate that compared to respondents in poor health, respondents in better health are more likely to have made financial preparations for retirement. Having an activity limitation is associated with increasing odds of making other investments, paying off debts and making other purchases. Middle aged respondents (age 50-64) are more likely to have made RRSP contributions than both their younger and older counterparts. However, the older respondents were more likely to have built up savings, made other investments and paid off or avoided debts. The implications for policy are discussed.SAI; health; age; financial preparations

Intergenerational Redistribution, Health Care, and Politics

Publicly provided health care implies considerable intergenerational redistribution. The possibility of accumulating a fund or debt will affect the degree of redistribution as well as how efficient the financing of health care is. In a voting model we study how governments inability to make binding long-term policy commitments will affect the accumulation of a fund or debt. Today's government will base its policy decisions on expectations about future governments behavior and simply follow suit, which results in strong political inertia. Either a fund or debt may therefore be upheld in political equilibrium. But no mechanism ensure that it is at its optimal level. If there is fund in steady state, the more political clout the old have the smaller will the fund be, i.e saving decrease. If there is debt, however, a politically stronger old generation may imply a smaller debt, i.e. savings increase.Voting; health expenditure; intergenerational transfers; dynamic politics

The Working Poor and Social Security Privatization: Restoring the Opportunity to Save

Many defenders of Social Security assert that the program favors the poor and keeps low-wage earners out of poverty. Those claims are mistaken. Today, despite Social Security's progressive benefit structure, more than 1 in 10 seniors live in poverty. Social Security simply costs too much and pays too little. The rate of return on Social Security taxes paid during a working life is dismal, making the opportunity cost of participating in the program instead of a private retirement plan tremendous. Social Security's approaching fiscal crisis threatens to make this situation worse. The poor would accrue substantial savings and enjoy much larger retirement benefits if they were allowed to redirect payroll taxes to individually owned, privately invested accounts. Instead of relying on political promises for retirement security, low-wage workers would have tangible retirement savings built from their earnings. Such a system would provide greater financial security and would go a long way toward eliminating poverty among the elderly

The equity of social services provided to children and senior citizens

A consideration of the degree of equity in the U.S. government's treatment of children vis-a-vis adults, particularly the elderly. The authors show that given current policy, today's and tomorrow's children could end up paying as much as 70 percent of their lifetime income to the government, whereas the current elderly will pay only about 25 percent on average.Social service

The operational processing of wind estimates from cloud motions: Past, present and future

Current NESS winds operations provide approximately 1800 high quality wind estimates per day to about twenty domestic and foreign users. This marked improvement in NESS winds operations was the result of computer techniques development which began in 1969 to streamline and improve operational procedures. In addition, the launch of the SMS-1 satellite in 1974, the first in the second generation of geostationary spacecraft, provided an improved source of visible and infrared scanner data for the extraction of wind estimates. Currently, operational winds processing at NESS is accomplished by the automated and manual analyses of infrared data from two geostationary spacecraft. This system uses data from SMS-2 and GOES-1 to produce wind estimates valid for 00Z, 12Z and 18Z synoptic times

The aerospace technology laboratory (a perspective, then and now)

The physical changes that have taken place in aerospace facilities since the Wright brothers' accomplishment 78 years ago are highlighted. For illustrative purposes some of the technical facilities and operations of the NASA Lewis Research Center are described. These simulation facilities were designed to support research and technology studies in aerospace propulsion

Consumption and Hedging in Oil Importing Developing Countries

We study the consumption and hedging strategy of an oil-importing developing country that faces multiple crude oil shocks. In our model, developing countries have two particular characteristics: their economies are mainly driven by natural resources and their technologies are less e cient in energy usage. The natural resource exports can be correlated with the crude oil shocks. The country can hedge against the crude oil uncertainty by taking long/short positions in existing crude oil futures contracts. We find that both, ine ciencies in energy usage and shocks to the crude oil price, lower the productivity of capital. This generates a negative income e ect and a positive substitution e ect, because today's consumption is relatively cheaper than tomorrow's consumption. Optimal consumption of the country depends on the magnitudes of these e ects and on its risk-aversion degree. Shocks to other crude oil factors, such as the convenience yield, are also studied. We nd that the persistence of the shocks magni es the income and substitution e ects on consumption, thus a ecting also the hedging strategy of the country. The demand for futures contracts is decomposed in a myopic demand, a pure hedging term and productive hedging demands. These hedging demands arise to hedge against changes in the productivity of capital due to changes in crude oil spot prices. We calibrate the model for Chile and study up to what extent the country's copper exports can be used to hedge the crude oil risk.Crude oil prices, convenience yields, risk management, emerging markets, government policy, two-sector economies