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on Business Economics |
| By: | Barry Bosworth (The Brookings Institution) |
| Abstract: | This paper provides an examination of the decline in the household saving rate over the past two decades from both the macroeconomic and microeconomic perspectives. Between 1980-84 and 2000-04 private saving fell more than 8 percentage points of U.S. GDP. At the aggregate level, about 40 percent of the fall in the household saving rate occurred within contractual retirement accounts, that is, within employer-sponsored and individual retirement plans. Moreover, much of the drop in discretionary saving occurred before the sharp rise in equity and home values in the late 1990s. The paper examines the potential scope of a number of other explanations for the fall in aggregate saving, such as the drop in inflation, increased capital gains on wealth, and alternative treatments of consumer durables as investment. Lower rates of inflation do emerge as a possible cause of the drop in measured saving, but the other factors do not seem consistent with the observed timing of the decline. The microeconomic section explores the feasibility of using information from successive Surveys of Consumer Finances (SCF) to follow the wealth accumulation of specific age cohorts over the period of most dramatic change in aggregate saving. For many components of wealth, the surveys are very similar to the corresponding aggregates of the flow of funds accounts (FFAs), but there are important discrepancies for corporate equities that become particularly large for the 2001 survey. The discrepancies in the nominal wealth are magnified when the two estimates are adjusted for capital gains, yielding substantially different estimates of household saving. The paper reports on some efforts to benchmark the SCF to the FFAs, using the distributional information of the SCF to provide an added dimension to the FFA data. The resulting microeconomic data indicate a widespread drop in saving that cannot be associated with any specific group of households. |
| Keywords: | household, saving, retirement, inflation |
| JEL: | E2 J26 |
| Date: | 2004–11 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:2004-26&r=bec |
| By: | Barry P. Bosworth (The Brookings Institution); Ralph C. Bryant (The Brookings Institution); Gary Burtless (The Brookings Institution) |
| Abstract: | All major industrial countries will experience significant population aging over the next several decades. In both academic circles and the business press it is widely believed that population aging will have important effects on financial markets because of its expected impact on saving rates and the demand for investment funds. This paper reviews the literature on the macroeconomic and asset market effects of population aging, focusing on four related issues: (a) The impact of population age structure on aggregate household saving; (b) The effect of population aging on investment demand; (c) Evidence on the influence of population age structure on financial market asset prices and returns; and (d) Effects of globalization on our interpretation of the impact of demographic change. |
| Keywords: | aging, saving, investment |
| JEL: | E21 |
| Date: | 2004–10 |
| URL: | http://d.repec.org/n?u=RePEc:crr:crrwps:2004-23&r=bec |
| By: | Andrea Fosfuri; Marco S Giarratana; Alessandra Luzzi |
| Abstract: | Open source software (OSS) has recently emerged as a new way to organize innovation and product development in the software industry. This paper investigates the factors that explain the investment of profit-oriented firms in OSS products. Drawing on the resource-based theory of the firm, we focus on the role played by pre-OSS firm assets both upstream and downstream, in the software and the hardware dimensions, to explain the rate of product introduction in OSS. Using a self-assembled database of firms that have announced releases of OSS products during the period 1995-2003, we find that the intensity of product introduction can be explained by a strong position in software technology and downstream market presence in hardware. Firms with consolidated market presence in proprietary software and strong technological competences in hardware are more reluctant to shift to the new paradigm. The evidence is stronger for operating systems than for applications. The fear of cannibalization, the crucial role of absorptive capacity, and complementarities between hardware and software are plausible explanations behind our findings. |
| Keywords: | Product introduction; open source software; absorptive capacity |
| JEL: | L86 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:05-10&r=bec |
| By: | Luísa Ferreira Lopes; Manuel Mira Godinho |
| Abstract: | We present a model that links innovation effort to economic performance, along the lines of the Crépon et al (1998) model. However, in contrast to Crépon et al, that analyze R&D intensive manufacturing sectors, the present application examines the relationship between innovation and performance for services sectors. This is relevant since much effort has been made to explore that relationship for manufacturing but very little is known about it in the case of services sectors. In trying to fulfill this gap the paper uses firm-level data from the Second Community Innovation Survey to estimate a simultaneous equations model for firms in ten services sectors in Portugal. The present model also differs from former approaches by the specific explanatory structure proposed to estimate the complex relationship between innovation and economic performance. Instead of estimating a direct link between innovation and labor productivity, three specific relationships were put forward. The first of them explains the innovation effort intensity (an input in the innovation process). The second one relates service innovation (an output of the innovation process) to effort intensity and to other explanatory variables. Finally, the third relationship links labor productivity to both service innovation and effort intensity considering also some other influences. Sensitivity analysis of the results to alternative estimation techniques was performed. |
| Keywords: | Innovation and performance; Innovation in services; Technology; Service sectors; Labor productivity; CIS |
| JEL: | O31 O33 L8 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:05-08&r=bec |
| By: | David Gray |
| Abstract: | <P>Decentralization looms large in any analysis of Canadian economic and social policy. This trend has been especially pronounced in the area of unemployment insurance (UI) and social assistance (SA) programmes. Provinces now manage SA programmes and retain 100% of any cost savings that they achieve, while the Federal government maintains full responsibility for the passive component of UI. Under a series of provincial-federal Labour Market Development Agreements, since 1997 most of Canada's provinces have taken over administrative responsibility for the employment benefit and support measures (EBSMs) targeted on UI beneficiaries. A number of articles have examined the implications for provincial SA systems of restrictive measures in the UI programme. This paper examines the possibility that provinces may shift actual and potential SA clients onto the insurance system (now called employment insurance, EI). It concludes that within the context of EBSMs, any cost-shifting of this ...</P> <P>La décentralisation figure en tête de toute analyse de la politique économique et sociale canadienne. Cette tendance n'est nulle part plus prononcée que dans le domaine des programmes d'assurance-chômage (AC) et d'aide sociale. Les provinces maintenant gèrent les programmes d'aide sociale et récupèrent 100% de toute économie obtenue, alors que le gouvernement fédéral conserve la pleine responsabilité pour le volet passif de l'AC. Aux termes d'une série d'Ententes sur le développement du marché du travail (EDMT), depuis 1997 la plupart des provinces canadiennes ont la responsabilité de gestion pour les Prestations d'emploi et mesures de soutien (PEMS) ciblées sur les allocataires de l'AC. Il existe quelques études portant sur les conséquences des mesures restrictives appliquées au programme d'AC pour les programmes provinciaux d'aide sociale. Cet article étudie la possibilité que les provinces fassent basculer sur le système d'assurance (nommé maintenant l'assurance-emploi, AE) les ...</P> |
| JEL: | J64 J65 J68 |
| Date: | 2003–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:oec:elsaab:14-en&r=bec |