Financial crises have been a common feature of the economic landscape for more than two centuries. The chapter defines banking crises, considers the type of costs that they impose, and outlines the most common causes of banking crises during the past 200 years. The remainder of the chapter considers five distinct historical periods: the nineteenth century, when the pattern of crises following ‘boom–bust’ economic cycles became established; the inter-war period, which was punctuated by two major sets of crises (post-First World War crisis and the Great Depression); the post-Second World War financial ‘lock-down’, which was characterized by stringent banking regulation and a complete absence of banking crises; deregulation and the return of crises in the 1970s; and the subprime crisis that emerged in 2008 and the subsequent Eurozone crisis.
Public pension systems are usually distinguished according to whether they are universal or contribution based. In the first instance access is determined by residency or nationality, implying that the subjects of insurance are either all legal residents or all citizens. In the second instance employment status is the determinant, implying that only workers have full access. This article focuses on the changes in the sectoral composition of economies, firm strategies, and labour markets respectively to argue that occupational pensions will gradually be transformed into individual saving accounts. It concludes with a brief discussion of the policy challenges and open research questions involved.
Steven F. Venti
This article focuses on the effect of behavioural and psychological factors on two stages of the saving decision: planning and execution. At each stage it tries to identify and provide evidence of the effects of behavioural and psychological factors on saving decisions. The aim is not to evaluate the relative importance of conventional and alternative models of retirement saving. It is acknowledged that conventional models may be very good descriptions of how consumers intend to save and for some persons may describe observed behaviour. However, the conventional models are only part of the story. The discussion focuses on the other part: why some people fail to behave according to conventional models and what kinds of policies employers, governments, and savers themselves can adopt to encourage better saving decisions.
This article explores some of the issues that have emerged in both public and private social security arising as a consequence of attempts to arrange cover despite a lack of residence or nationality. It is in three sections, dealing separately with: the questions of residence and nationality; the question of mobility and transfer of rights; and the more recent influence of human rights case law on rights and expectations. The article attempts to develop some coherent political and legal framework, but in reality few of the rules in many countries reflect a rigorous policy structure, based on any serious logical principles. The one acknowledged framework, that of the European Union, is however considered at some length.
Corporate governance has long been theorized and criticized within the template provided by neoliberalism. This assumes that social relations will become most honest and productive when modelled on market relations. Yet this also results in a business culture of mistrust and endless audit. Participatory governance forms have certain advantages, which need clearly understanding and articulating. Firstly, they treat dialogue as a better principle for relations within the firm than competition. Secondly, they treat ambiguity of value as a virtue, which can yield innovation. However, there is insufficient training, expertise, and practice for these advantages to come properly to light. As a result, we remain too often stuck with a dysfunctional model, whose failures are met with calls for more of the same.
This chapter presents a narrative of currency crises for the past two centuries. It uses the Swan Diagram as a theoretical framework for this narrative and concludes that many so-called banking crises are in fact currency crises. These crises are caused by capital flows in war and peace and typically result in recessions. The Swan Diagram helps us to consider external and internal imbalances together and understand their interactions. It also reminds us that national histories often ignore the international aspect of economic crises. This chapter draws on and extends work reported in Peter Temin and David Vines, The Leaderless Economy, Why the World Economic System Fell Apart and How to Fix It.
Naohiro Ogawa and Noriyuki Takayama
Developed regions of the world have been experiencing population ageing for more than 40 years, and this trend is expected to continue for several decades. Furthermore, a growing number of developing countries will experience population ageing in the first half of the twenty-first century. Population ageing represents a major challenge that is unprecedented in human history: a shrinking working population is forced to support a growing number of economically inactive persons. This phenomenon gives rise to a multitude of pressing issues. This article addresses these problems, identifying what is known and what is not known. It particularly addresses two questions: first, how significant demographic ageing is; and second, whether there are any effective solutions. The article then deals with demographic trends and future prospects from global and regional perspectives. It examines the economic implications of population ageing and discusses pension-funding issues.
David A. Wise
In the United States, the labour force participation rate of men over 60 fell continuously from about 65 per cent in 1940 to about 30 per cent by 1980. The reduction in labour force participation was made possible by social security benefits and by firm pension plans. Social security was introduced under the Social Security Act of 1935. Company pensions were spurred by the Revenue Act of 1942 that granted tax incentives to firms to establish pension plans. The per centage of persons 65 and over receiving social security benefits increased from about 20 per cent in 1940 to 85 per cent in 1960; now about 95 per cent receive them. The proportion of the workforce covered by an employer-provided (or a federal or state or local government) pension plan increased from 23.8 to 48.6 per cent between 1950 and 1979, and remains at that level today. The public and private pension plans did just what they were intended to do. They allowed workers to retire with a secure source of income thereafter.
Irena Grugulis, Craig Holmes, and Ken Mayhew
This chapter discusses the returns to employers and to society at large. It argues that, in certain circumstances, the private returns to individuals will be greater than the economic returns to society. This is because individuals may simply be buying credentials which advantage them in a labour market characterized by positional competition, without necessarily been more productively employed than they would have been had they not received the training in question. The chapter goes on to argue that the extant literature on returns to employers is indecisive and, linked to this, that official rationales for government training subsidies to employers are often confused. Finally it considers the non-economic returns to training.
Jiwook Jung and Frank Dobbin
Mark D. Jacobs
Josephine Maltby and Janette Rutterford
Vickie L. Bajtelsmit
Research by numerous individuals from a diverse set of disciplines, including economics, sociology, psychology, education, and finance, has focused recent attention on the continued need for retirement policy initiatives aimed at improving the prospects for women's retirement in the coming decades. The purpose of this article is to summarize this wide-ranging body of literature in an effort to draw together our current state of knowledge regarding the impact of gender and family on retirement outcomes. This article outlines the demographic, sociological, and regulatory factors that may be responsible for these observed differences. In addition to the obvious factors such as life expectancy and marital status, it is important to emphasize that labour-market experience is a fundamental determinant of retirement outcomes. If women continue to earn less than men, have shorter working lives, and subpar benefits packages, there is little doubt that these factors will have a negative impact on their retirement. The final section offers some suggestions for future policy direction related to gender, family, and retirement.
William C. Apgar and Zhu Xiao Di
This article is divided into three main sections and a conclusion. The first section discusses recent trends in wealth accumulation, with a particular focus on the accumulation of housing wealth by older households. The next section examines the impact of housing wealth on consumption and investment activities, and demonstrates that, for most households, homeownership opens up new pathways for additional wealth accumulation. Given the fact that housing wealth is the largest component of wealth for most households, the article then turns to a discussion of the several significant risks that threaten to undermine the benefit which older Americans derive from accumulated housing wealth. The concluding section offers some brief observations on policy approaches designed to enhance the ability of housing wealth to add to the financial security of older people.
Aaron Z. Pitluck
Neil Fligstein and Adam Goldstein
Ezra W. Zuckerman
Creativity has the flavour of a scarce ability much sought-after : people well endowed with it come to be rewarded with earnings and prestige disproportionately higher than what the presumable underlying distribution of skills and abilities would command among the work-force concerned. Yet, the main determinants of creativity are somewhat obscure. The most commonly notion in use is talent, that has become a buzzword everywhere value creation is at stake. If talent were readily definable or observable there would be no uncertainty about success. Since the wellsprings of inventiveness and originality cannot possibly be fully specified, the creative worlds take advantage of an excess supply of workers and works to proceed by ceaseless comparisons and tournaments that not only rank ordinally producers and products, but come to magnify interindividual differences essentially impossible to calibrate from the outset. As a result, inequalities in reputation and earnings attain extreme levels. After reviewing different models that allow for analyzing the Paretian distribution of income and reputation, this article tries to solve the talent puzzle by developing a four-component explanation of inequality in creative labor markets.