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In 1986, the National Bureau of Economic Research initiated a research project on the economics of aging under the direction of David A. Wise. The goal of the program is to further our understanding of both the determinants of the economic well-being and health of the elderly, and the consequences for the elderly and for the larger society of an increasingly older population. This third volume to result from the project contains nine essays addressing new issues, some of international scope, as well as research that continues work introduced in the previous volumes. Topics include retirement and saving for retirement; living arrangements and family support of the elderly; the aged in developing countries, including Thailand and Cote d'Ivoire; social security reform, with an analysis of the Japanese system; and the relation between the duration of nursing home stays and the source of payment for care. Each paper is accompanied by critical commentary. Robin L. Lumsdaine, James H. Stock, and David A. Wise find that although complex models are better predictors of actual retirement behavior, the most complex does not provide significantly more information. In a paper offering startling evidence likely to be of wide interest, Thomas E. MaCurdy and John B. Shoven report that the long-term rate of return on stocks is higher than that on bonds but, despite this difference in returns, fewer than twenty percent of TIAA-CREF participants choose to put more than half their retirement savings into stocks. Axel Borsch-Supan, Vassilis Hajivassiliou, Laurence J. Kotlikoff, and John N. Morris develop a model of living arrangements that promises easier implementation than past models, and confirm thatincreasing age and decreasing functional ability are the most important factors influencing the decision to enter a nursing home. Borsch-Supan, Jagadeesh Gokhale, Kotlikoff, and Morris consider the time that children spend with their parents, concluding that this time is determined primarily by demographic factors, with economic factors such as income and wealth playing an insignificant role. Using data from the Retirement History Survey, Michael D. Hurd argues that wealth, excluding housing, declines about three percent a year during retirement; average consumption expenditures also decrease by two to four percent a year, findings consistent with the life-cycle theory. Angus Deaton and Christina H. Paxson consider aging issues in less developed countries, finding that older people in Thailand and Cote d'Ivoire tend to live with younger relatives in multigenerational households and that economic status is less variable over the life cycle in these countries. The pay-as-you-go Japanese social security system is examined by Tatsuo Hatta and Noriyoshi Oguchi, as are the implications of changing from the current system to one that is actuarially fair. Alan M. Garber and Thomas E. MaCurdy explore the relation between the duration of nursing home stays and the source of payment for nursing home care. They conclude that the incentive effects of the subsidies of nursing home care may play an important role in what type of nursing home care is most often used. Finally, transitions in and out of nursing homes are considered by Edward C. Norton, who analyzes data from an experiment that tested the effects of performance-based reimbursement on the quality and cost of nursing home care.

In the late 1990s, economic and financial crises raged through East Asia, devastating economies that had previously been considered among the strongest in the developing world. The crises eventually spread to Russia, Turkey, and Latin America, and impacted the economies of many industrialized nations as well. In today's increasingly interdependent world, finding ways to reduce the risk of future crises--and to improve the management of crises when they occur--has become an international policy challenge of paramount importance. This book rises to that challenge, presenting accessible papers and commentaries on the topic not only from leading academic economists, but also from high-ranking government officials (in both industrial and developing nations), senior policymakers at international institutions, and major financial investors. Six non-technical papers, each written by a specialist in the topic, provide essential economic background, introducing sections on exchange rate regimes, financial policies, industrial country policies, IMF stabilization policies, IMF structural programs, and creditor relations. Next, personal statements from the major players give firsthand accounts of what really went on behind the scenes during the crises, giving us a rare glimpse into how international economic policy decisions are actually made. Finally, wide-ranging discussions and debates sparked by these papers and statements are summarized at the end of each section. The result is an indispensable overview of the key issues at work in these crises, written by the people who move markets and reshape economies, and accessible to not just economists and policymakers, but also to educated general readers. Contributors: Montek S. Ahluwalia, Domingo F. Cavallo, William R. Cline, Andrew Crockett, Michael P. Dooley, Sebastian Edwards, Stanley Fischer, Arminio Fraga, Jeffrey Frankel, Jacob Frenkel, Timothy F. Geithner, Morris Goldstein, Paul Keating, Mervyn King, Anne O. Krueger, Roberto Mendoza, Frederic S. Mishkin, Guillermo Ortiz, Yung Chul Park, Nouriel Roubini, Robert Rubin, Jeffrey Sachs, Ammar Siamwalla, George Soros

The twentieth century saw significant increases in both life expectancy and retirement rates-changes that have had dramatic impacts on nearly every aspect of society and the economy. Forecasting future trends in health and retirement rates, as we must do now, requires investigation of such long-term trends and their causes. To that end, this book draws on new data-an extensive longitudinal survey of Union Army veterans born between 1820 and 1850-to examine the factors that affected health and labor force participation in nineteenth-century America. Contributors consider the impacts of a variety of conditions-including social class, wealth, occupation, family, and community-on the morbidity and mortality of the group. The papers investigate and address a number of special topics, including the influence of previous exposure to infectious disease, migration, and community factors such as lead in water mains. They also analyze the roles of income, health, and social class in retirement decisions, paying particular attention to the social context of disability. Economists and historians who specialize in demography or labor, as well as those who study public health, will welcome the unique contributions offered by this book, which offers a clearer view than ever before of the workings and complexities of life, death, and labor during the nineteenth century.

The contributors to this volume analyze the growth experiences of Japan, Korea, China, Hong Kong, Singapore, and Taiwan in light of the recently developed endogenous growth theory to provide an understanding of the economic boom in East Asia. The theory explored in this volume attributes the phenomenal economic success of these countries to, among other factors, the role of an outward orientation - a focus on exporting rather than on protecting home markets. In addition, the importance of exchange rate behavior, of the supportive role of government policy, and of the accumulation and promotion of physical and human capital are explored in detail. This collection also makes significant contributions to recent work examining the extent to which growth in each country became self-sustaining once it began. This fourth volume in the NBER-East Asia Seminar on Economics series demonstrates the relevance of endogenous growth theory for studying this important region and will be invaluable for economists and for those interested in East Asian affairs.

During the first three decades following the Second World War, an increasingly open international trading system contributed to unprecedented economic growth throughout the world. But in recent years, that openness has been threatened by increased protectionism, regional trading arrangements - Europe 1992 and the U.S.-Canada Free Trade Agreement - and setbacks in negotiations on the General Agreement on Tariffs and Trade. In Trade and Protectionism, American and East Asian scholars consider the dangers of this trend for East Asian countries in particular and the world economy in general. The first two papers in the volume look at the context in which East Asian trading relations with the United States take place. The papers focus on the role of GATT, the importance of an open multilateral trading system, and the current threats to it. An analysis of the United States' regional trading arrangements is also included. The second set of papers addresses sensitive sectoral issues that have led to frictions in Japanese-American semiconductor trade and agricultural protection among Japan, Korea, and Hong Kong. In the third group of studies, the authors examine U.S.-Japanese trade issues, the impact of U.S.-administered protection on Korean exports, and the openness of the Japanese market to exports from other Asian countries. Next, aspects of international economic relations among Asian countries are considered. Two studies explore foreign direct investment relations between Japan and other Asian countries, and the relationship between Japanese foreign direct investment and trade flows among Asian countries. The final five papers analyze how political-economic interaction affects levels ofprotection, focusing on the political economy of protection in Korea and Taiwan. This is the second volume in the series to come from the National Bureau of Economic Research-East Asia Seminar on Economics. The first volume, The Political Economy of Tax Reform, addresses tax reform in the global economy.

This timely volume addresses important recent trends in the internationalization of equity markets. These trends include increasing securitization as many countries come to rely more than ever before on markets in equities and bonds, extensive market integration through foreign investment and resulting links among stock prices around the world, and the opening of national financial systems of newly industrializing countries to international financial flows and institutions as governments remove capital controls and other barriers. Eight essays examine such issues as the current extent of international market integration, gains to U.S. investors through international diversification, fundamental macroeconomic determinants of securities prices, home-country bias in investing, securities transactions taxes, the role of time and location around the world in stock trading, and the behavior of country funds. Other long-standing questions about equity markets are also addressed, such as market efficiency and the accuracy of models of expected returns, including a particular focus on variances, covariances, and the price of risk, as in the Capital Asset Pricing Model. The Internationalization of Equity Markets will interest academic and business economists concerned with stock market behavior around the world.