Random Scenario Forecasts Versus Stochastic Forecasts

Probabilistic population forecasts are useful because they describe uncertainty in a quantitatively useful way. One approach (that we call LT) uses historical data to estimate stochastic models (e.g., a time series model) of vital rates, and then makes forecasts. Another (we call it RS) began as a kind of randomized scenario: we consider its simplest variant, in which expert opinion is used to make probability distributions for terminal vital rates, and smooth trajectories are followed over time. We use analysis and examples to show several key differences between these methods: serial correlations in the forecast are much smaller in LT; the variance in LT models of vital rates (especially fertility)is much higher than in RS models that are based on official expert scenarios; trajectories in LT are much more irregular than in RS; probability intervals in LT tend to widen faster over forecast time. Newer versions of RS have been developed that reduce or eliminate some of these differences.

Macroeconomic Consequences of Population Aging in the United States: Overview of a National Academy Report

The US population will age rapidly for several decades and then more slowly, with less aging than most rich nations. Health of the elderly has greatly improved, but disability stagnated after 2000. Retirement age reversed its decline in the mid-1990s and health status leaves ample room for increased elder labor supply. Many older people have inadequate retirement savings and face additional risks including uncertainty about both public and private pensions and health insurance. Population aging may cause a small decline in rates of return. The main problem is the impact of population aging on public programs for the elderly

Stochastic Forecasts of the Social Security Trust Fund

We present stochastic forecasts of the Social Security trust fund by modeling key demographic and economic variables as historical time series, and using the fitted models to generate computer simulations of future fund performance. We evaluate several plans for achieving long-term solvency by raising the normal retirement age (NRA), increasing taxes, or investing some portion of the fund in the stock market. Stochastic population trajectories by age and sex are generated using the Lee-Carter and Lee- Tuljapurkar mortality and fertility models. Interest rates, wage growth and equities returns are modeled as vector autoregressive processes. With the exception of mortality, central tendencies are constrained to the Intermediate assumptions of the 2002 Trustees Report. Combining population forecasts with forecasted per-capita tax and benefit profiles by age and sex, we obtain inflows to and outflows from the fund over time, resulting in stochastic fund trajectories and distributions. Under current legislation, we estimate the chance of insolvency by 2038 to be 50%, although the expected fund balance stays positive until 2041. An immediate 2% increase in the payroll tax rate from 12.4% to 14.4% sustains a positive expected fund balance until 2078, with a 50% chance of solvency through 2064. Investing 60% of the fund in the S&P 500 by 2015 keeps the expected fund balance positive until 2060, with a 50% chance of solvency through 2042. An increase in the NRA to age 69 by 2024 keeps the expected fund balance positive until 2047, with a 50% chance of solvency through 2041. A combination of raising the payroll tax to 13.4%, increasing the NRA to 69 by 2024, and investing 25% of the fund in equities by 2015 keeps the expected fund balance positive past 2101 with a 50% chance of solvency through 2077.

TRANSITION AND REFORM OF CHINA'S AGRICULTURAL SYSTEM TOWARD A MARKET-ORIENTED ECONOMY: LESSONS FROM THE TAIWAN EXPERIENCE

As China proceeds through the process of economic development to an industrialized economy, its agriculture will undergo substantial stress and structural change. China may be able to effectively utilize the experiences of Taiwan agriculture and its policies in adjusting to change. These policies and their impacts are explained in this working paper.Agricultural and Food Policy,

SOIL CONSERVATION OR COMMODITY PROGRAMS: TRADE OFFS DURING THE TRANSITION TO DRYLAND CROP PRODUCTION

Predicted crop yields and wind erosion rates from a multi-year/multi-crop growth simulation model provided input into a multi-period recursive QP model to evaluate erosion implications during the transition to dryland crop production on the Texas Southern High Plains. Three farm-program participation options were considered in this study. Participation in an extension of the current farm program resulted in an increase in net returns and wind erosion rates above nonparticipation. Imposition of a soil loss limit without consideration of a flexible base option can significantly reduce discounted present values. Increasing risk aversion across producers affects crop mix selection which can result in lower per acre wind erosion rates for this particular region.Crop Production/Industries,

Characterization of Metal and Metal Alloy Films as Contact Materials in MEMS Switches

This study presents a basic step toward the selection methodology of electric contact materials for microelectromechanical systems (MEMS) metal contact switches. This involves the interrelationship between two important parameters, resistivity and hardness, since they provide the guidelines and assessment of contact resistance, wear, deformation and adhesion characteristics of MEMS switches. For this purpose, thin film alloys of three noble metals, platinum (Pt), rhodium (Rh) and ruthenium (Ru) with gold (Au), were investigated. The interrelationship between resistivity and hardness was established for three levels of alloying of these metals with gold. Thin films of gold (Au), platinum (Pt), ruthenium (Rh) and rhodium (Ru) were also characterized to obtain their baseline data for comparison. All films were deposited on silicon substrates. When Ru, Rh and Pt are alloyed with Au, their hardness generally decreases but resistivity increases. This decrease or increase was, in general, dependent upon the amount of alloying

Key Equations in the Tuljapurkar-Lee Model of the Social Security System

N/A