Survivor Funds

This Article explains how to create “survivor funds”—short-term investment funds that would pay more to those investors who live until the end of the fund’s term than to those who die before then. For example, instead of just investing in a ten-year bond and dividing the proceeds among the investors at the end of the bond term, a survivor fund would invest in that ten-year bond but divide the proceeds only among those who survived the full ten years. These survivor funds would be attractive investments because the survivors would get a greater return on their investments, while the decedents, for obvious reasons, would not care. Survivor funds would work like short-term tontines. Basically, a tontine is a financial product that combines features of an annuity and a lottery. In a simple tontine, a group of investors pools their money together to buy a portfolio of investments, and, as investors die, their shares are forfeited, often with the entire fund going to the last survivor. For example, imagine that ten 65-year-old men each contribute $1000 to a fund that buys a large diamond for$10,000 and that the men agree that the last “survivor will get the diamond. Accordingly, after the ninth man dies, the tenth man gets the diamond, and he can keep it or sell it. Of course, the survivor principle—that the share of each, at death, is enjoyed by the survivors—can be used to design financial products that would benefit multiple survivors, not just the last survivor. For example, elsewhere, we showed how tontines could be used to create so-called “tontine annuities” and “tontine pensions” that would benefit lots of retirees. In this Article, we show how the survivor principle can be used to create survivor funds that would only make payments to those who survive for a specified number of years

Louisiana Juvenile Justice at the Crossroads

Over the past decade, interest in community-based corrections for juveniles has grown while dissatisfaction with the expense and ineffectiveness of training schools has increased. Since 1985, the National Council on Crime and Delinquency has investigated technologies that would make a shift from juvenile justice systems plagued with over-incarceration to those emphasizing community-based care. The application of a public-safety risk assessment instrument to Louisiana juvenile offenders revealed that substantial numbers of youth could be safely managed in well-run community programs. This risk assessment technology, together with accurate, policy sensitive, population forecasting and an intensive review of existing community programs, can substantially assist administrators in moving toward more effective juvenile correctional systems

A Theoretical Growth Model for Ireland

Ireland is distinguished by the high degree of openness of its labour market and the importance of foreign direct investment (FDI) in the economy. We develop a neo-classical growth model to explore the consequence of these characteristics for the response of an economy to the kinds of shocks that are widely recognised to have been of importance in driving the Irish boom.

Crises Now and Then: What Lessons from the Last Era of Financial Globalization

We consider the operation of international capital markets in two periods of globalization, before 1914 and after 1971, with a focus on the crisis problem. We explore the idea that the incidence of crises in these two periods reflects how capital flows were embedded in the larger economic system. Other authors have made similar connections, suggesting that the international monetary framework was responsible for the relatively short-lived and mild nature of pre-World War I financial crises. However, we show that currency crises in fact were of longer duration before 1914. Only for banking and twin crises is there evidence that recovery was faster then than now. This leads us to a somewhat different view of the role of the monetary regime in the propagation of financial crises. A key difference between then and now, we suggest, is that prior to 1914 banking crises were less prone to undermine confidence in the currency, and to thereby compound financial problems, in the countries that were at the core of the international monetary system.

Towards Interoperability of Biomedical Ontologies

Report on Dagstuhl Seminar 07132, Schloss Dagstuhl, March 27-30 , 2007