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We study optimal compensation in a dynamic framework where the CEO consumes in multiple periods, can undo the contract by privately saving, and can temporarily inflate earnings. We obtain a simple closed-form contract that yields clear predictions for how the level and performance sensitivity of pay vary over time and across firms. The contract can be implemented by escrowing the CEO's pay into a \"Dynamic Incentive Account\" that comprises cash and the firm's equity. The account features state-dependent rebalancing to ensure its equity proportion is always sufficient to induce effort, and time-dependent vesting to deter short-termism.

From 1995 to 2005, the average urban household saving rate in China rose by 7 percentage points, to ¼ of disposable income. We use household-level data to explain the postponing of consumption despite rapid income growth. Tracing cohorts over time indicates virtually no consumption smoothing over the life cycle. Saving rates have increased across all demographic groups, although the age-profile of savings has an unusual U-shaped pattern, with saving rates being the highest among the youngest and oldest households in recent years. These patterns are best explained by the rising private burden of expenditures on housing, education, and health care.

The macroeconomic implications of a pension reform that substitutes a high-return fullyfunded system for a low-return pay-as-you-go system are discussed in an overlapping generations, neoclassical growth model. With forward-looking individuals, a debt-financed reform worsens the current account, while a tax-financed reform leaves the current account unchanged. With myopic individuals, a debt-financed reform leaves the current account unchanged, while a tax-financed reform improves the current account. Hence, tax-financing, which is equivalent to pre-funding, should be the preferred reform strategy in a small open economy with a weak current account position.

In the literature, increases in the ratio of current deficit to gross domestic product (GDP) are considered a crisis indicator, and budget and savings deficits are deemed to be significant causes of the current deficit. This situation, called the triple deficit hypothesis in the literature, is analyzed with the panel dynamic ordinary least square (panel DOLS) and fully modified ordinary least squares (FMOLS) using 2000-2019 data for Bulgaria, Czechia, Estonia, Latvia, Lithuania, Hungary, Malta, Romania, and Slovenia, which are generally referred to as the emerging economies of Europe. The results showed a long term relationship between the variables. Accordingly, budget and private savings deficits increase the current deficit in the long term. The causality analysis found a reciprocal causal relationship between the variables, such that while budget and private savings deficits cause an increase in the current deficit, increases in the current deficit also increase the budget and private savings deficits. Thus, the triple deficit hypothesis is valid in these countries.

This paper draws on macroeconomics, the economics of institutions and the economics of trust to explain private savings at the national level for 33 OECD (mostly European) countries from 2002 to 2012. More specifically, it raises two questions: (i) is it the quality of institutions or trust in institutions that drives private savings? (ii) if trust matters, what is the appropriate institutional level at which it operates? To answer these questions, we add to the usual explanatory variables of private savings three measures of institutional quality and six measures of institutional trust, distributed between the following institutional levels, presented in assumed hierarchical order: political, legal, financial and social. We find that trust in political institutions is the most significant driver of private savings. This contributes to the literature underlining the importance of subjectivity in social and economic phenomena and suggests, for private bank savings in countries having highly regulated banking systems, the existence of a hierarchy of trust in which trust in the highest-ranking institutions (political – and to a lesser extent legal – institutions) acts as a substitute for trust in every lower-ranking institution (financial institutions and social trust).

The paper empirically investigates the saving consequence of population aging, an issue that is important for policymaking and still far from uncontroversial. Rather than providing another piece of evidence to verify the positive or negative correlation between population aging and saving, the contribution of the paper is to consider the moderating role of financial development in the nexus. In a cross-country panel data setting, we find that population aging proxied by old-age dependency decreases saving, but the effect diminishes with financial development. The opposite is found for life expectancy. Financial development weakens the saving-increasing effect of life expectancy. The findings hold for different types of saving and controlling for per-capita income growth. The data suggest that life expectancy may offset the effect of old-age dependency, limiting the influence of population aging on saving. The evidence also suggests that financial development constrains the saving effect of population aging and the need to consider a country’s extent of financial development to address the saving consequence as a population ages.

The purpose of this paper is to examine factors that have constrained South Africa's growth since the end of apartheid by comparing its GDP components and its saving and investment performance with those of 10 faster-growing countries. The study finds that sluggish investment has undermined growth since 1996 and that the underinvestment is in part explained by limited saving. Thus, over the last decade, interactions between investment, saving, and production may have perpetuated slow growth in South Africa.

PurposeThe purpose of this study is to examine empirically the impacts of gender differences, telecommunication technology (ICT) and other determinants on private savings in 28 selected Asia–Pacific countries.Design/methodology/approachThis study employs the panel data from 2010 to 2017 across 28 selected Asia–Pacific countries. To enhance robustness and address the possibility of endogeneity issue, the present study utilises the fixed effect instrumental variable (IV) estimator to estimate the private savings model for Asia–Pacific region.FindingsThe present study finds that private savings is positively related to disposable income and ICT, but it is negatively associated with the degree of dependency. However, the association between interest rates and private savings are inconclusive as both positive substitution and negative income effects on private savings were observed. Moreover, the results also indicate that working females tend to save less than working males and that of the educated female, despite their impacts are varied across educational attainment levels.Originality/valueThis study provides a novel insight into private savings patterns by focussing upon the gender differences and ICT aspects. In stark contrast to previous literature on the issue, the authors find that working and educated females negatively impact private savings in Asia–Pacific economies due to income inequality and consumption habits. However, the results show that ICT accelerates private savings as it provides easy access to financial services and the requisite frameworks, such as e-business platforms, for generating passive income as well as provide the modalities for more cost-efficient shopping such as price and product comparison frames that yield costs savings which can then be potentially channelled into private savings.

Saving rates display considerable variation across countries and over time. This paper investigates empirically the policy and nonpolicy factors behind these saving disparities using a large, cross-country, time-series data set and following an encompassing approach including a number of relevant private saving determinants. The paper extends the literature in several dimensions. It uses the largest data set on aggregate saving assembled to date and explores both national and private saving determinants. It uses panel instrumental-variable techniques to correct for endogeneity and heterogeneity. Finally, it performs a variety of robustness checks to changes in estimation procedures, data samples, and model specification.