Erzsébet Kovács

Valuation of the Hungarian Pension System

This paper takes a look at certain results of the modelling side of the Hungarian pension reform. Preparations are underway to implement actuarial modelling of pension liabilities for the government. The objective is to understand how the state might face challenges of the present pay-as-you-go pension system. Flat-rate pension, point system and notional defined contribution (NDC) as possible suggestions are reviewed in order to stop increase of public debt in the course of this century. Based on the investigations done in the last two years the sharpest problems for Hungary are the low activity ratios and the short working period.

Introduction: The Nature and Structure of the Inventory Problem

This part is an introduction of the concept and role of inventories in the economy. We explain why holding inventories is a necessary component of economic activity and why item-level, firm-level and national-level inventories present themselves as natural focuses of analysis. Reasons of holding inventories on these three levels are discussed. Item-level inventories are hold to meet specific demand components, firm-level inventories are subject to company management as an important contribution to smooth and cost-effective operation, while national inventories are aggregates of lower-level inventories influenced by the structure of the economy and economic policy factors. Our attention is focused in this book on national inventories, three characteristics of which can be analysed: level, change and fluctuation. We provide reasons why we find analysing long-term trends of national inventories as a useful contribution to our general knowledge of operation of the economies.

Analysis of Inventory Behaviour of OECD Countries

The most aggregate view of inventory investment tendencies of our set of countries is the one looking at the average of country-wise annual inventory investment over the investigated time horizon. Having the complete data set of the 20 TMEs for the full time horizon, it is possible to see the main tendencies. In Sect. 4.1, we analyse the aggregate inventory behaviour. We start with the 20 TMEs over the full time horizon, and then, we close in on the second sub-period and add the other 6 TMEs and 6 PSEs to the set of countries. The focus is on the examination of the mean and standard deviation of aggregate dI/GDP. After that, we continue with a country-level analysis of dI/GDP, again investigating the 20 TMEs first, and then add the other countries. We explore the main tendencies through descriptive statistics, and we visualize the relationship between the mean and standard deviation of dI/GDP.

Inventory Developments in Individual Countries

In this part, we take the 32 countries in the sample one by one and provide an overview of their economy from the inventory researcher’s point of view. The purpose of the chapter is to give a background for interpreting and analysing results about individual countries shown in various chapters of the book. Therefore, this chapter serves as kind of a reference background for the interpretation and evaluation of different country results.

Stability of Macroeconomic Variables

In Chap. 4, we have seen some important characteristics of long-term inventory processes. If we want to see the relationship of these to the other GDP components, we have to examine long-term characteristics not only the GDP components but also some other macroeconomic factors, which according to previous research are in close relationship with inventories. So, in this section, we take a closer look at the factors listed in Sect. 3.1: components of the GDP (private and government consumption, gross fixed capital formation, exports and imports), growth, per capita GDP as an indicator for development and indicators of structural characteristics (manufacturing and trade sectors, openness, centralization of income).

Mortality and Longevity Risk

This chapter examines the insurance and pension-related risks arising from the uncertainty of human life-length, which constitute the most important part of a major class of insurance risks sometimes referred to under the umbrella term biometric risks. Mortality risk results from differences between observed and expected mortality rates in an insured population. By contrast, longevity risk is related to the phenomenon of increasing average human lifespans, and tends to affect government pension systems, defined-benefit pension schemes, and life insurers writing annuities. In this chapter, we give an overview of these risks along with their place in the Solvency II framework, to be followed by a detailed presentation of available quantitative risk assessment methodologies and traditional risk management solutions. Finally, we conclude with a brief introduction to the promising alternative risk management framework of mortality-linked securities.

The choice of dilemmas in Hungary's transition: Westernization or latin americanization?

This paper deals with Hungary on the basis of selected characteristics regarding European Union accession conditions. In most cases, there are no exact criteria which must be fulfilled. Therefore, the difference between the real and expected levels of performance cannot be measured. The chances for stabilization and growth, reintegration, or periphery are under investigation. This statistical analysis concentrates on the similarity between members of the European Union (and the Organization for Economic Cooperation and Development) and new applicants. The structural similarity and closeness can statistically prove economic success or failure.