This paper discusses the nature of the uncertainty faced by central banks and considers three approaches to dealing … with uncertainty(1) formal optimization models and robust rules based on such models; (2) informal rules like the Taylor …

This paper examines the risk aspects of a fully phased-in investment-based defined contribution Social Security plan … system. A higher saving rate provides a cushion' that reduces the risk of unacceptably low benefits. For example, saving 6 … annuity exceeds 92 percent of the benchmark benefit. We also study a modified plan in which retirees face no risk of …

Ranguelova that examined the implication of portfolio risk after the transition to an investment-based system has been completed … system that is completely investment-based. We model intergenerational guarantees and assess the risk of such guarantees to … combinations of taxes and saving deposits in the later years. The extra risk to retirees and/or taxpayers is relatively small …

This paper examines the risk aspects of an investment-based defined contribution Social Security plan. We focus on the … risk after the plan is fully phased in. Individuals deposit a fraction of wages to a Personal Retirement Account (PRA … uncertainty, a 5.5 percent log return would permit the benchmark benefits to be purchased with PRA deposits of 3.1 percent of …

current law. Calculations of expected utility show that these risk reduction techniques can raise expected utility relative to … the plans with no guarantees. The ability to do so depends on the individual's risk aversion level. This underlines the … idea that different individuals would rationally prefer different investment strategies and risk reduction options …