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This chapter talks about the simple life cycle model. There are several models which are concerning with bequeathing and the results of policy analysis depend on the motive for bequeathing. In a situation where the giving parent cares about the size of the bequest, the bequest acts like parental consumption and should be taxed under a consumption tax policy. On the contrary, if the giving parent cares about the full income of the offspring, then the bequest is more like an asset and should not be taxed under a consumption tax. This could maintain neutrality. However, if the population is made up of different people with different motives for bequeathing, it will be impossible to impose a consumption tax. Therefore, a proportional consumption tax will not be completely neutral with respect to decision-making in the existence of bequest.

Two of the central hypotheses associated with earlier versions of the product life‐cycle model are called into question. First, on the basis of 100 years of US Patent Office data on the patents granted to large European and American industrial firms, the author rejects the hypothesis that innovations almost always originate in the home country of the parent company; internationalization of industrial research is found to be neither insignificant nor a new phenomenon. The second hypothesis, that international investment is led by technology leaders, fares better, being consistent with the data. However, the author makes an extended interpretation in order to take account of more recent trends toward a much wider range of firms being engaged in internationalization, suggesting that technology leaders are now ahead in the globalization of technology, and that these firms would be most competent in exploiting the locationally differentiated potential of foreign centres of technological excellence. Technology leadership can then be said to manifest itself in superior management of internal international networks with multiple locations for innovation, rather than just in a wider geographical dispersion of investments.

Labor income is an asset, and for young investors the value of labor income usually dominates the rest of their financial holdings. An investor’s mix of assets changes as her labor income evolves over her life cycle, and an investor whose labor income is bond-like should reduce his holdings of equities as retirement approaches. While economic theory suggests that annuities are ideal for retirees, few hold them.

The executive branch departments and agencies of the national government have the key role in the implementation stage of the policy process. In the National Environmental Policy Act of 1969 (NEPA), the Council on Environmental Quality (CEQ) was assigned the task of providing an annual report on the condition of the nation’s environment, assessing the effects of national, state, and local governments’ efforts to protect the environment, and developing recommendations to improve environmental quality. The Environmental Protection Agency (EPA) was given the primary responsibility for implementing the pollution control laws Congress created between 1970 and 1980, amendments to those laws, and new laws enacted during the next three decades. Some scholars have maintained that the process of implementing a public law is “removed from the hurry and strife of politics,” since the important political and substantive matters have been decided in the law itself. Other scholars, however, describe the implementation stage of the policy process as a continuation of the political struggle that occurred over the creation of the law. The competition between these two views of policy implementation is one factor that makes the study of the “life cycles” of executive branch departments and agencies so important. If the first view is correct, the implementation of a public law should be a relatively smooth process in which the leadership, managers, and professionals in agencies like the CEQ and the EPA carry out their assigned statutory duties. Likewise, the life cycle of the executive branch agency should be relatively stable and long. Finally, absent serious flaws in the design of the policy itself, the prospects for successful implementation of the law might seem to be relatively high. If the alternative view of policy implementation is correct, however, the extent to which implementation of a public law actually occurs is likely to depend heavily on the health, vitality, and even survival of the implementing agency. In turn, the health and vitality of the executive branch agency is likely to depend on the leadership of the agency and the resources that Congress and the president appropriate for it.

Using a dynamic, life-cycle, general equilibrium model, this chapter investigates the interdependent demographic, fiscal, and economic transition paths of China, Japan, the United States, and the European Union, each of which is entering a period of rapid and significant aging that will require major fiscal adjustments. The life-cycle model takes into account various factors such as age-, region-, and year-specific fertility and mortality rates; lifespan uncertainty; age-, region-, and year-specific pension; disability, health care, and other government-transfer policies; region- and year-specific government purchases of goods and services; region-specific personal wage income, capital income, corporate income, and payroll taxes; international capital mobility; exogenously specified age-, earnings class-, region-, and year-specific immigration; and region- and cohort-specific time preference rates. Understanding how national aging and fiscal policy will affect the macroeconomies of these regions is important. If the macroeconomic response is favorable, governments can do less and take more time to deal with what is coming. If the opposite is true, they must do more and do it more quickly.

This chapter explores the way that the inequality of consumption behaves in a life-cycle model without bequests. It also investigates the consequences of Social Security reform for the inequality of consumption across individuals. Systems in which there is less sharing of earnings risk develop higher consumption inequality both before and after retirement. Asset inequality rises with age, but does so most rapidly in the cases where insurance is greatest, so that the differences in asset inequalities across the various schemes diminish with age. There is virtually no increase in consumption inequality before retirement, and very little after retirement, associated with assigning different consumers to different fixed interest rates. Moreover, assigning consumers to different but fixed rates of interest will not necessarily have the same influences as allowing the interest rate to vary randomly over time for individual consumers.

Early work on CASE environment integration concentrated on the mechanistic aspects of integration between tools. The process context in which those integrated tools would be used was less of a concern. In recent years, however, the process aspect of integration has grown in importance in the eyes of most members of the software community. The role of process, and hence of process integration, is now generally regarded as critical. Such issues as determining the impact of process on the choice of tools to be integrated, how those integrations should be implemented, and how a CASE environment will be used in the overall life of an enterprise are now increasingly seen as being of paramount importance. As an example, while one could assert that a particular analysis tool should be integrated with a documentation tool, this is of little real value. A more meaningful assertion is that the analysis tool must make use of documentation services to generate documentation in some standard life-cycle model form (e.g., DoD-STD-2167 document sets). The three-level model of integration proposed in this book reflects this interest in process. In our three-level model, process integration is orthogonal to mechanism- level integration and service-level integration. In this view, we see that integration is not just an amalgamation of related tools, but is the combination of several integrating mechanisms, used over some set of services (as implemented by tools) to achieve some specific process objective. Put another way, we view software processes as defining a design context, i.e., a set of integration requirements. When implemented, they can be expressed as a coordinated set of environment services, i.e., unified through a combination of control, data, and presentation mechanisms. In this chapter, we explore the broad subject of process integration in more detail. We first consider several divergent views on the nature of process integration itself, and particularly the question of process in the context of “process improvement.” We then examine the relationships between process integration and CASE tools and environments. We next look at some idealized examples of how processes and tools interact, and some issues raised by these examples.

In this chapter we use household income and consumption data to establish whether income shocks are temporary or permanent, and to what extent they translate into changes in consumption. To this end we use income micro-data from six European countries that differ in a number of respects, including their welfare systems, but also income and consumption panel data from Italy, Spain, and Denmark. We find that in some countries temporary shocks are reasonably well insured, but in all countries we consider permanent shocks are (to a large extent) not. We argue that this explains why we find it takes so long to recover from a financial hardship episode, and its effects take so many years to wear out.

This section covers the first steps of a the Machine Learning Life Cycle Model; how to specify a business problem, acquire subject matter expertise, define prediction target, define unit of analysis, identify success criteria, evaluate risks, and finally, decide whether to continue a project. Focus is on who will use the model, whether management is supportive, whether the drivers of the model can be visualized, and how much value a model can produce.

This chapter focuses on large N aggregation. It first briefly reviews the main aggregation problems studied in the literature. It then presents a general framework for micro/disaggregate behavioural relationships and develops a forecasting approach to derive the optimal aggregate function. This approach is applied to a large cross section aggregation of panel autoregressive distributed lag (ARDL) models and to the case of large factor augmented vector autoregressive (VAR) models in N cross section units, where each micro unit is potentially related to all other micro units, and where micro innovations are allowed to be cross-sectionally dependent. The optimal aggregate function is used to examine the relationship between micro and macro parameters to show which distributional features of micro parameters can be identified from the aggregate model. The chapter also derives and contrasts impulse response functions for the aggregate variables, distinguishing between the effects of composite macro and aggregated idiosyncratic shocks. Some of these findings are illustrated by Monte Carlo experiments and two applications are presented. The first application investigates the aggregation of life-cycle consumption decision rules under habit formation. The second application investigates the sources of persistence of consumer price inflation in Germany, France and Italy, and re-examines the extent to which ‘observed’ inflation persistence at the aggregate level is due to aggregation and/or common unobserved factors. Exercises are provided at the end of the chapter.

Designing partnerships for success is challenging. Many partnerships succumb to collaborative inertia; that is, they experience slow progress or truncate their efforts without any tangible outcomes. Factors that contribute to such inertia include distrust, framing conflicts, identity, process, and power differences. This chapter identifies several important process design issues that partnership leaders need to consider. Eight critical tasks that interveners can undertake to shift these forces in positive directions are introduced: Convening, managing the process, visioning, intervening in large groups, conflict handling, visioning to facilitate partners’ learning, gaining buy-in back home, and institution building. Detailed advice is offered for how partners should engage in each of these tasks to steer partnerships in positive directions. Factors that motivate and block collaborative efforts at each of four phases in a partnership’s life cycle are also explored and their appropriateness for each phase of a partnership’s life cycle is assessed.