Optimal life cycle asset allocation : understanding the empirical evidence.

We show that a life-cycle model with realistically calibrated uninsurable labor income risk and moderate risk aversion can simultaneously match stock market participation rates and asset allocation decisions conditional on participation. The key ingredients of the model are Epstein–Zin preferences, a fixed stock market entry cost, and moderate heterogeneity in risk aversion. Households with low risk aversion smooth earnings shocks with a small buffer stock of assets, and consequently most of them (optimally) never invest in equities. Therefore, the marginal stockholders are (endogenously) more risk averse, and as a result they do not invest their portfolios fully in stocks.

Portfolio choice with internal habit formation : a life-cycle model with uninsurable labor income risk.

Motivated by the success of internal habit formation preferences in explaining asset pricing puzzles, we introduce these preferences in a life-cycle model of consumption and portfolio choice with liquidity constraints, undiversifiable labor income risk and stock-market participation costs. In contrast to the initial motivation, we find that the model is not able to simultaneously match two very important stylized facts: a low stock market participation rate, and moderate equity holdings for those households that do invest in stocks. Habit formation increases wealth accumulation because the intertemporal consumption smoothing motive is stronger. As a result, households start participating in the stock market very early in life, and invest their portfolios almost fully in stocks. Therefore, we conclude that, with respect to its ability to match the empirical evidence on asset allocation behavior, the internal habit formation model is dominated by its time-separable utility counterpart.

Quantifying the Distortionary Fiscal Cost of ‘The Bailout’

We utilize an overlapping generations model with endogenous production and incomplete markets to quantify the distortionary costs associated with financing the increase in government expenditures directed to investments in the private sector in 2008 and 2009 (also known as ‘the bailout’), and its differential impact on different groups of the population (in the USA). In our baseline calibration, this distortion corresponds to a loss of approximately $300 billion dollars in total household consumption. For plausible alternative assumptions regarding both the expected and actual duration of this increase in expenditures, or the willingness of foreign institutions and/or investors in absorbing additional government debt, this number can increase to$800 billion. We find that the cost falls more dramatically on those households which are either older and/or wealthier. Retirees face approximately 50% of the cost, as younger agents still expect to be alive when the economy has returned to its steady-state. Across wealth groups, the top 25% of the wealth distribution bears almost two thirds of the cost.Fiscal Policy, tax distortions, bailout, incomplete markets

The Excess Burden of Government Indecision

Governments are known for procrastinating when it comes to resolving painful policy problems. Whatever the political motives for waiting to decide, procrastination distorts economic decisions relative to what would arise with early policy resolution. In so doing, they engender excess burden. This paper posits, calibrates, and simulates a life cycle model with earnings, lifespan, investment return, and future policy uncertainty. It then measures the excess burden from delayed resolution of policy uncertainty. The first uncertain policy we consider concerns the level of future Social Security benefits. Specifically, we examine how an age-25 agent would respond to learning at an early age whether she will experience a major Social Security benefit cut starting at age 65. We show that having to wait to learn materially affects consumption, saving, and portfolio decisions. It also reduces welfare. Indeed, we show that the excess burden of government indecision can, in this instance, range as large as 0.6 percent of the agent’s economic resources. This is a significant distortion in of itself. It’s also significant when compared to other distortions measured in the literature.

Gravitational waves in theories with a non-minimal curvature-matter coupling

Gravitational waves in the presence of a non-minimal curvature-matter coupling are analysed, both in the Newman-Penrose and perturbation theory formalisms. Considering a cosmological constant as a source, the non-minimally coupled matter-curvature model reduces to $f(R)$ theories. This is in good agreement with the most recent data. Furthermore, a dark energy-like fluid is briefly considered, where the propagation equation for the tensor modes differs from the previous scenario, in that the scalar mode equation has an extra term, which can be interpreted as the longitudinal mode being the result of the mixture of two fundamental excitations $\delta R$ and $\delta \rho$.Comment: 9 pages. Version published at Eur. Phys. J.

Financial globalization, convergence and growth

We provide evidence that the composition of foreign capital, measured by the ratio foreign direct investment over total liabilities, a.ects growth directly and through the speed of convergence. Developing countries benefit relatively more as their initial GDP is smaller. The dataset comprises the period 1970-2004 and 96 countries, and the results are robust to di.erent measures of the composition of foreign capital, restricted time period, developing countries, and alternative explanations of convergence and growth. These results are consistent with the neoclassical growth model with credit constraints presented in this paper, in which the composition of foreign capital a.ects the transition dynamics through a positive e.ect on the speed of convergence and steady state GDP.composition of foreign capital; speed of convergence; growth.

Masonry wall assembly

The present invention includes a method and a unit for a masonry wall system, each unit comprising a face shell wherein the interior surface has a transverse axis running from the top surface to the bottom surface of the face shell, and one or more webs having a front end and a rear end, wherein the rear end of each web is integral with or attached to the interior surface of the face shell along the transverse axis. The method for wall construction further comprising positioning one or more vertical reinforcement rods or tendons with one end embedded in a wall-foundation and laying a layer wall units on the wall-foundation such that the one or more webs of the layers of wall units are aligned, and the vertical reinforcement rods or tendons run through or are adjacent to the webs of the wall units.Board of Regents, University of Texas Syste

Masonry wall assembly

The present invention includes a method and a unit for a masonry wall system, each unit comprising a face shell wherein the interior surface has a transverse axis running from the top surface to the bottom surface of the face shell, and one or more webs having a front end and a rear end, wherein the rear end of each web is integral with or attached to the interior surface of the face shell along the transverse axis. The method for wall construction further comprising positioning one or more vertical reinforcement rods or tendons with one end embedded in a wall-foundation and laying a layer wall units on the wall-foundation such that the one or more webs of the layers of wall units are aligned, and the vertical reinforcement rods or tendons run through or are adjacent to the webs of the wall units.Board of Regents, University of Texas Syste

Balance sheet expansionary policies in the Euro Area : macroeconomic impacts and a vulnerable versus non-vulnerable comparison : a Bayesian structural VAR approach

Employing a Bayesian structural vector autoregressive (VAR) model, we estimate the impact of the European Central Bank’s (ECB) balance sheet expansionary policies (BSEP) on a range of economic and financial variables including real GDP, inflation, long-term sovereign bond yields, systemic stress, unemployment, bank loans, and equity markets in the period from 2009:Q1 to 2021:Q4. The main conclusion from this study is that more vulnerable euro area countries had larger magnitudes in desirable impulse responses to BSEPs shocks. To reach this conclusion, we estimated the same model for 16 euro area countries and used maximum, minimum, and cumulative impulse responses to assess the heterogenous responses to BSEPs across member states. We then attempt to find correlations of impulse responses with measures of financial and economic vulnerability such as debt-to-GDP ratios, unemployment, GDP per capita (PPP), and tier 1 bank capital ratios. Our results suggest that the magnitude of the responses are more pronounced in countries with higher levels of vulnerability. These findings are akin to theoretical assumptions that suggest that unconventional monetary policies are most effective in periods of severe systemic stress.info:eu-repo/semantics/publishedVersio

Early Iron Age 'black' glass in Southwestern Iberia: typology, distribution, and context

In the past few years, deeply colored black-appearing glass has garnered a growing interest in the context of research on Iron Age glass technology and trade. The numerous 'black' glass beads found in Early Iron Age contexts of Southern Portugal have not however been considered in this discussion, and they remain largely unsystematized. In this contribution, a typological survey of these objects is presented which highlights their unusual concentration in a well-delimited area of Southern Portugal and their relatively circumscribed chronological setting. This is particularly striking when compared with other groups of beads, namely blue beads of various types, which are much more widespread and long-lasting. The global position of these beads is also considered, with typological comparisons and the few available compositional data suggesting that they may be the product of Punic, and perhaps specifically Carthaginian trade with the Western Iberian Peninsula. Finally, the possible specific historic context in which these beads arrived in Southern Portugal is considered./