Description: Great damage is being done to the U.S. economy as a result of the widespread misunderstanding that the Consumer Price Index measures changes in the cost of living.

Description: Feature article discussing how market interest rates and bond yields dropped in response to the global financial crisis in late 2008, and they have struggled to return to their prior levels, in part because the Federal Reserve has made efforts to spur growth and lending in a sluggish U.S. economy.

Description: This essay explores the role that the emerging defined contribution retirement system may be playing in the growth of wealth inequality in the United States. The current system leaves many Americans with little or no retirement savings. Those with higher accumulation levels appear to invest proportionally more in equities, which may have an exponential effect of balances over long time periods. The author hypothesizes that willingness to take investment risk involves the relationship between the amount an investor has accumulated and what she/he needs in order to cover basic costs of living. This is one reason that investors with greater accumulation levels may be able to earn higher rates of return. The essay concludes by suggesting that the U.S. defined contribution system should include all workers and provide additional fiduciary guidance. Examples reforms, both in the U.S. and other countries, are provided.

Description: Reports the results of one application of a Future Research technique-in this case, forecasting future economic variables.

Description: Article from The Actuary, November 1971 – volume 5 - Issue 9 is an update on the current efforts of the ALC-LIAA Joint Actuarial Committee to bring about certain changes in the Standard Valuation Law and the Standard Non-forfeiture Law. These efforts may have an important influence on operations of life insurance companies in the United States.

Description: In this paper we investigate three investment-consumption problems for a risk averse investor: i an investment only problem that involves utility from only terminal wealth, ii an investment-consumption problem that involves utility from only consumption, and iii an extended investment-consumption problem that involves utility from both consumption and terminal wealth. We model these problems under a multiperiod setup that incorporates three types of uncertainties: the economic environment uncertainty, the asset return uncertainty, and the mortality uncertainty. By using dynamic programming, analytical expressions of the optimal investment consumption strategies to these problems are derived. Some economic implications on these results are also discussed.

Description: Discusses the effects of inflation and the impact on business. This article sites several challenges that business will encounter during times of inflation.

Description: This article is a summary of a November 1981 actuarial club presentation by Robert D. Shapiro. It begins with the rise of Universal Life in 1981 with the climate of high interest rates and minimization of company federal income tax and then discusses the year 1982 with declining interest rates and the changes made to UL.

Description: This is the second part of a 2 part series on Real options analysis (ROA). This article looks into the limitations of using financial option theory when doing real options analysis with projects that are long-dated and uncertain, such as: 1. First-degree homogeneity, 2. Uncertainty must derive from Brownian motion, and 3. Risk neutrality.

Description: This article draws attention to the competition for the Boleslaw Monic Prize. Prizes totalling Dutch florins 12,500, roughly US$4,500 are being offered for the three best papers submitted on: “The significance of inflation for the non-life insurance industry, with particular reference to the relationship between direct insurance and reinsurance the problems facing management and a suggested methodology for their solution.”