A rational choice theory of midlife crises

This paper models the midlife crisis as a decision on whether and when to realize a life dream, incorporating the key components of three psychology theories of midlife crises. It explains why a crisis (dream realization) tends to occur in the midlife if it occurs at all. Other results include that one either realizes his dream fully or not at all, that a shorter life expectancy makes a midlife crisis more likely, and that “crazier†dreams tend to be postponed to a later time in life.midlife crisis, dream, aging, death

Can Cryptocurrencies Successfully Compete in the Money Market?

EducationThe cryptocurrency revolution began with the introduction of Bitcoin in 2009. Today, there are now more than 4,000 cryptocurrencies and Bitcoin has a market capitalization of over $1 trillion. While these new digital entities are characterized as cryptocurrency, none actually circulate in day-to-day commerce. In policy study 2102, author Thomas R. Saving describes the necessary properties of money and compares them to cryptocurrency. As they are currently structured, cryptocurrencies are not going to compete in the privately produced money market but are better positioned to compete in the precious metals market

The Rise and Fall of Medicare

The authors propose a means for preserving Medicare as we know it. After detailing the reasons for Medicare\u27s financial troubles, they present a cohort-based financing plan for Medicare that represents a fundamental departure from the generation transfer method currently used.https://research.upjohn.org/up_press/1063/thumbnail.jp

The Pandemic Federal Reserve: The First Two Years

Finance_Due to the Covid-19 pandemic, developed world governments engaged in unprecedented spending. Federal Reserve securities holdings were an astounding 36.5% of the nation’s Gross Domestic Product after two pandemic years. These tremendous increases in Federal Reserve holdings resulted in bank reserves that exceeded $4 trillion at their peak and even after some reductions still stood at$3.9 trillion after two years of the pandemic. During the Great Recession, bank excess reserves reached $2.6 trillion but inflation remained below 2% through paying interest on bank reserves. But now we have a bank reserve problem that is 25% larger and the question is: can the Federal Reserve set an IOR high enough to stave off an inflationary increase in the money stock? In policy study 2201, Thomas Saving examines how Federal Reserve assets and liabilities have changed during the pandemic; fluctuations in the M2 money supply; as well as the relationship between short rate Treasuries and the IOR

Federal Reserve Asset Reductions and the Economy

Energy_EnvironmentAt its September 2017 meeting, the Board of Governors of the Federal Reserve System announced that they would begin to reverse the massive acquisition of assets that began in 2009. What has been the impact of these asset sales, and what challenges face the Federal Reserve as the asset sales continue? This paper goes over the past 18 months of the asset reduction program and future challenges facing the Fed

The Federal Reserve: Back to the Past

Finance_The Federal Reserve's payment of interest on bank reserves balances has transformed the balances to investments rather than just insurance against a run on the banking system. The paying of interest on reserves allowed the Federal Reserve to engage in an unprecedented increase in its assets without incurring significant inflation in the economy. The Federal Reserve recently announced that it will begin a gradual reduction in its asset portfolio. This reversal of the almost decade long increase in Federal Reserve assets will require a slow, but careful process. This process must account for the effect of the policy on the Federal Reserve's annual inflation target. In this study, the scale of the asset reduction required to return the Federal Reserve's assets to GDP ratio back to its pre-Great Recession level is measured. Using simple analysis, the magnitude of the problem and the factors that make the transition possible are estimated. This analysis demonstrates the wisdom of the slow approach envisioned by the Federal Reserve Board. Going forward, uncertainty about the future path of market interest rates is particularly important

The Federal Reserve In Two Crises

Finance_The country has experienced two economic crises in the first two decades of the 21st century, but there are significant differences between the 2008 crisis and the 2020 crisis caused by the pandemic. In this policy study, Thomas R. Saving reports the actions of the Federal Reserve and evaluates its responses to different aspects of each crisis, including the timeliness of asset increases by the Federal Reserve. Economic factors that occurred before and during each crisis are also considered, including the unemployment rate, labor force participation, and real GDP growth

The Failed Federal Reserve Attempt to Get Back to the Past

Finance_The end result of the Federal Reserve’s response to the 2008 financial and the Great Recession was an unprecedented increase in assets. Between 2008 and 2014, Federal Reserve assets rose from just under $900 billion to over$4.5 trillion, more than 500%. This asset increase was expected to dramatically increase inflation, but did not due to the introduction of paying interest on bank reserves. In policy study 2002, author Thomas R. Saving shows the Federal Reserve’s rise in assets and the outcomes of its decision to return to their historic level as a share of GDP

Monetary Policy in a Zero or Negative Interest Rate World

Energy_EnvironmentThe persistence of negative interest rates in the Euro-Zone and Japan coupled with low inflation raises the question of the efficacy of central banking in a negative interest rate world. Given that interest rates have been in decline for more than thirty years, are the negative interest rates in the Euro-Zone and Japan a precursor for the future of the other countries in the developed world? In policy study 1904, author Thomas Saving examines whether monetary policy can work with negative interest rates and the effects low and negative rates have on the public's wealth