The costs of recession: a comment

Article Abstract:

Kenneth Clark, Derek Leslie and Elizabeth Symons (CLS) have contended that Robert Lucas's measurement of the amount of consumption that households will have to give up to eliminate business cycle fluctuations is erroneous. Lucas had estimated that households will only reduce 1/10 of one percent of their base consumption to eliminate fluctuations. It is argued that CLS have arrived at the wrong conclusion from their data and that the data suggests cyclical costs that are either zero or as low as Lucas's figures.

Consumption (Economics), Recessions, Business cycles, Households

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Social security: national policies with international implications

Article Abstract:

International coordination of social security policies should eliminate the inefficiencies associated with the independent determination of policies within individual countries. This can be gleaned from the fact that national social security policies generate international externalities through their impact on world interest rates. An example is given to illustrate the potentially significant gains to be made from such an international coordination.

Administration of Human Resource Programs (except Education, Public Health, and Veterans' Affairs Programs), Social Security, Research, International aspects, International cooperation, Welfare economics

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Attainable non-optimality or unattainable optimality: a new approach to stochastic life cycle problems

Article Abstract:

Existing macroeconomic literature on the life cycle model of consumers's behavior employ the backward induction procedure. Such an approach, however, fails because it does not take into account the uncertainty governing an individual's income during his lifetime. A better method would be to formulate the problem in a forward-looking framework under the assumption that consumers save but do not plan specifically for their future.

Models, Analysis, Consumer behavior, Macroeconomics

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