05765oam 22011414 450 991081815000332120240402050141.01-4623-5479-31-4527-8642-91-282-84053-397866128405311-4518-6959-2(CKB)3170000000055011(EBL)1607848(SSID)ssj0000941187(PQKBManifestationID)11613890(PQKBTitleCode)TC0000941187(PQKBWorkID)10975367(PQKB)10627107(OCoLC)535146985(MiAaPQ)EBC1607848(IMF)WPIEE2008098(EXLCZ)99317000000005501120020129d2008 uf 0engurcnu||||||||txtccrGlobal Aging and Declining World Interest Rates : Macroeconomic Insurance Through Pension Reform in Cyprus /Willy Hoffmaister, Jaime Guajardo, Mario Catalan1st ed.Washington, D.C. :International Monetary Fund,2008.1 online resource (42 p.)IMF Working Papers"April 2008."1-4519-1413-X Includes bibliographical references (p. 39-40).Contents; I. Introduction; II. The Model; A. Model Overview; B. Households; C. Firms; D. The Government; E. Equilibrium; F. Balanced Growth Equilibrium and Calibration; G. Demographic Transition; III. Baseline Simulations; A. Scenario 1: Constant World Interest Rates; B. Scenarios 2 and 3: Declining World Interest Rates; IV. Pension Reform Simulations; A. Description of Pension Reforms; B. Simulation Results for Constant Interest Rates; C. Pension Reform as Macroeconomic Insurance; V. Conclusions; Tables; 1. Variable Definition and Notation; 2. Household's Optimization Problems3. First Order Conditions-Private Household's Optimization Problem 4. First Order Conditions-Public Household's Optimization Problem; 5. Calibration of the Model; 6. Pension Expenditure Reductions from Reforms; Figures; 1. Labor Skills Profile by Age; 2. Health Care Expenditure by Age Group; 3. Dependency Ratio in Model: Retired over Working Population; 4. Macroeconomic Results-Baseline Scenarios under Constant and Variable Interest Rates.; 5. Macroeconomic Results-Reform Scenarios under Constant and Variable Interest Rates ..6. Decomposition of Pension Expenditure-to-GNI-Ratios-Pension Reform and Interest Rate ScenariosReferencesHow will the world-wide decline in real interest rates associated with global aging affect small open economies (SOEs) with aging populations? Lower interest rates will result in higher capital-labor ratios and increased wages; higher wages, in turn, will be passed on to pension benefits, exacerbating aging-related fiscal pressures. The pass-through effect will be stronger if pensions are indexed to nominal wages rather than prices. Using an overlapping generations model, the paper illustrates the interest rates transmission mechanism and its interaction with pension indexation for the case of Cyprus. In addition, the paper evaluates the capacity of pension reforms to insure the economy against long-run movements in world interest rates. It concludes that pension reforms, particularly those that change the indexation of pensions from wages to prices, provide substantial macro-insurance and shock absorption benefits.IMF Working Papers; Working Paper ;No. 2008/098Interest ratesCyprusEconometric modelsPopulation agingCyprusEconometric modelsPensionsCyprusEconometric modelsLaborimfPublic FinanceimfDemographyimfSocial Security and Public PensionsimfNonwage Labor Costs and BenefitsimfPrivate PensionsimfWages, Compensation, and Labor Costs: GeneralimfEconomics of the ElderlyimfEconomics of the HandicappedimfNon-labor Market DiscriminationimfPensionsimfLabourimfincome economicsimfPopulation & demographyimfPension spendingimfWagesimfPension reformimfAgingimfPopulation agingimfCyprusimfInterest ratesEconometric models.Population agingEconometric models.PensionsEconometric models.LaborPublic FinanceDemographySocial Security and Public PensionsNonwage Labor Costs and BenefitsPrivate PensionsWages, Compensation, and Labor Costs: GeneralEconomics of the ElderlyEconomics of the HandicappedNon-labor Market DiscriminationPensionsLabourincome economicsPopulation & demographyPension spendingWagesPension reformAgingPopulation aging338.23580Hoffmaister Willy1609990Guajardo Jaime1609991Catalan Mario1599618IMF Institute.International Monetary Fund.European Dept.DcWaIMFBOOK9910818150003321Global Aging and Declining World Interest Rates3937521UNINA