Sandra L. Schwartz

Up the Down Staircase: The Productivity Decline and Strategies for Recovery

This paper explores the productivity decline experienced in the last decade in the U.S. There seen to be three broad causes for the decline. First, there have been structural declines in particular industries and shifts in industrial composition. Secondly, there have been changes in the factors of production that have led to a decline in the capital and labour inputs and changes in relative factor prices such as energy and interest charges. Finally, the risk taking attitudes of industry have led to a focus on short rather than long term goals. To reverse the productivity decline new policy thrusts should be instituted in four broad areas: (1) interest and inflation; (2) industrial strategy and aggregate demand; (3) capital accumulation and decumulation; and (4) strategic management.

ALM issues in social security

Publisher Summary This chapter explores the issues surrounding the social security shortfall and the proposals for transforming social security into a sustainable retirement system. For most part the description of the crisis is based on purely accounting type deterministic models that rely on demographic parameters. These models can also be used to show how simple tinkering with the variables can stave off the actual crisis. However, to actually reform the system might require more creative design, of which some new approaches are investigated here. It also introduces the US Social Security system and reviews what retirees can expect from social security and other assets. It reviews the crisis social security faces. It provides a review of the models and proposals for saving the system. It discusses models for redesign and reforming the system keeping in mind the original objectives of the system.