National Institute Economic Review

When to give? A note on the timing of gifts and bequests

We generalise the standard joy-of-giving bequest motive by including inter vivos gifts. Within a life-cycle framework, we analyse the implications of the choice of different discount factors for the utility of gifts and bequests. For a linear utility of giving, we characterise the gift and bequest pattern of a liquidity constrained individual over the life-cycle.

Saving and life insurance holdings at Boston University - a unique case study

This study examines the saving and insurance behaviour of 386 Boston University (BU) employees who volunteered to receive financial planning based on ESPlanner (Economic Security Planner) - a detailed life-cycle financial planning model developed by Economic Security Planning, Inc. Because the employees received their own financial plan, they had a strong incentive to provide full and accurate financial information. Hence, the data appear to be of particularly high quality for studying saving and life insurance decisions.

Household saving rates and the design of public pension programmes: cross-country evidence

I argue that the offsetting effect of public pension contributions on household retirement saving depends on how closely the public pension programme imitates a private retirement saving plan (i.e. the 'actuarial' content of the public pension programme) - the closer the design of the programme to a private retirement saving plan, the higher the offset. I estimate the determinants of household saving rates in a cross-country panel, augmenting standard measures of public pension programme generosity and cost by indicators that proxy the actuarial component of the programme.

Migration in Europe

In order to assess the economic impact of immigration, we have used our macro model, NiGEM to simulate an increase in Polish emigration amounting to about 4 per cent of the population of that country towards Germany and the UK. We have demonstrated that both host countries adjust to immigration flows in a similar way, although Germany reacts somewhat more slowly than the UK. Both economies settle to new equilibria with higher output and no permanent change to the unemployment rate.

UK Economy Forecast

¥ GDP is forecast to grow by 2.5 per cent this year and 2.6 per cent in 2007.<br />

¥ Inflation measured by the CPI is expected to be 2.6 per cent per annum in the fourth quarter of 2006, falling back to 2 per cent per annum by the end of 2007.<br />

¥ The interest rate should rise to 5 per cent per annum next month and 5_ per cent per annum early next year.<br />

¥ The Golden Rule is expected to be broken over the cycle as defined by HM Treasury.<br />

The UK Savings Gap

We set out a framework for measuring the adequacy of saving in the United Kingdom by assessing the absolute level of savings based on individual preferences of different ages. We examine this relationship between age and savings using data from the United Kingdom Expenditure and Food Survey 2004-5. We show that while the level of national saving is about 8.4 percentage points of net national income lower than is required if one assumes that each cohort pays its own way, wealth holdings are considerably higher than are required on the same basis.

Savings and the Economy - Introduction

There are two key microeconomic decisions which mark the interface between the micro and the macroeconomy. One is the work/leisure decision which has an immediate impact on the level of economic activity. The other is the consumption/saving decision. This is one of the factors which determines income growth with other factors being the rate of total factor productivity growth and any trends in labour supply. Low-saving countries are likely to experience low income growth.