January 2020
03Jan

Impact Investing

By Brad M. Barber, Adair Morse, Ayako Yasuda We document that investors derive nonpecuniary utility from investing in dual-objective VC funds, thus sacrificing returns. Impact funds earn 4.7 percentage points (ppts) lower IRRs ex post than traditional VC funds. In random utility/willingness-to-pay (WTP) models investors accept 2.5-3.7 ppts lower IRRs ex ante for impact funds. The positive WTP result is robust to fund access rationing and investor heterogeneity in fund expected returns. Development organizations, foundations, financial institutions, public pensions,...

January 3, 2020
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December 2019

04Dec

UK. FTSE 350 pension deficit falls as election nears

The accounting deficit of defined benefit (DB) pension schemes has fallen for the UK’s 350 largest listed companies as the country prepares to go to the polls on December 12.At the end of October, the deficit stood at £41 billion (€48.1 billion). By the end of November, it had dropped to £38 billion, according to Mercer’s pension risk survey. Charles Cowling, partner at Mercer, said: “The political turmoil in the UK is likely to last beyond the general election, causing...

December 4, 2019
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03Dec

European Union’s Finance Ministers are confidentially opposing the ECB’s negative rates monetary policy

European Union's Finance Minister opposed ECB's negative rates policy in a confidential meeting. Negative rates have started to hurt the savings and pensions systems. Monetary policy’s banking transmission channels may also be threatened. Fabio Panetta says the benefits of low-rates policy outweigh the risks for now. Forex market has not responded lucratively to the recent proceedings at the ECB. President Trump has reiterated his support for the European Central Bank’s (ECB) negative rates policy on multiple occasions. Following the...

December 3, 2019
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November 2019

29Nov

The Effect of Aging on the Age-wage Profile

By Toshikatsu Inoue Despite its importance, many macroeconomic models do not capture the changes in the age-wage profile over time. The flattening of the age-wage profile in Japan and the relative increase in the aging workforce suggests the existence of demand law in relative labor inputs and wages of each age, which is abstracted from the standard macroeconomic model. In this study, we build a model using the aggregate production function that creates a downward slope labor demand curve....

November 29, 2019
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28Nov

Pensions at a Glance 2019

By OECD The 2019 edition of Pensions at a Glance highlights the pension reforms undertaken by OECD countries over the last two years. Moreover, two special chapters focus on non-standard work and pensions in OECD countries, take stock of different approaches to organising pensions for non-standard workers in the OECD, discuss why non-standard work raises pension issues and suggest how pension settings could be improved. This edition also updates information on the key features of pension provision in OECD countries and...

November 28, 2019
Aging, Articles, Books, Labor Market, Pension design, Reports, Slider-Left, Sustainability, ,
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22Nov

Essentials of Pension Economics

By Sergio Nisticò This Palgrave Pivot provides a concise overview of pension systems which, whether paid by governments or by private companies, are the sole source of income for millions of people around the world. By 2050, two billion elderly people will have to be ensured some form of income while, at the same time, the prospect facing younger generations is of a gloomy future. This book breaks down the jargon, investigates different designs and analyses these designs'...

November 22, 2019
Aging, Books, System Sustainability,
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14Nov

US. Federal pension fund to include China investments, bucking political pressure

A pension fund for federal workers on Wednesday said it will begin tracking a benchmark that includes China-listed companies, despite strong opposition from a bipartisan group of Senators. The decision by the Federal Retirement Thrift Investment Board (FRTIB), an independent government agency that oversees the Thrift Savings Plan (TSP) retirement fund, comes amid heightened trade tensions with China and efforts to limit the flow of U.S. capital to Chinese companies due to security concerns. It also bucks months of...

November 14, 2019
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13Nov

Latin Americans Are Clamoring for Equality — and Democracy

Economic crisis and stagnation have sparked a wave of protest and a demand for more transparency and an efficient welfare state across the region. A sign carried by one of the more than a million Chileans demonstrating on Oct. 25 read: “Neoliberalism was born in Chile; it is dying in Chile.” You’d think the obituary rings true, if you judge not just by protests not just in Chile and Ecuador a few weeks back, but also by election results...

November 13, 2019
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11Nov

German coalition parties avert government crisis with pension deal

German Chancellor Angela Merkel's conservatives and the center-left Social Democrats (SPD) on Sunday broke a deadlock over a higher basic pension for low-income workers, an impasse which had threatened the future of their governing coalition. Senior coalition members, including Merkel and SPD Finance Minister Olaf Scholz, sealed the compromise deal during talks in the chancellery that lasted more than six hours. The package also includes lower contributions to the public unemployment insurance scheme and the creation of an investment...

November 11, 2019
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08Nov

Robert C. Merton and the Science of Finance

By Zvi Bodie Starting with his 1970 doctoral dissertation and continuing to today, Robert C. Merton has revolutionized the theory and practice of finance. In 1997 Merton shared a Nobel Prize in Economics “for a new method to determine the value of derivatives.” His contributions to the science of finance, however, go far beyond that. In this essay I describe Merton’s main contributions. They include the following: 1. The introduction of continuous-time stochastic models (the Ito calculus) to the theory...

November 8, 2019
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