Open AccessAn Empirical Examination Of U.S. Pension Funds, Social Security, And Individual Savings
Author(s) -
Kofi A. Amoateng
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v17i2.2072
Subject(s) - pension , social security , economics , cointegration , style (visual arts) , error correction model , short run , monetary economics , finance , econometrics , archaeology , market economy , history
This article has used cointegration and Vector Error-Correction Models(VECM) to examine empirically the causation and/or relationships among pension funds, Social Security, and individual savings from 1980 to 1999. It finds that pension funds, Social Security, and individual savings tend to move together in the ling run. Pension funds influence individual savings in the short-run. In addition, individual savings seem to bear the brunt of adjustments in restoring long-term equilibrium to the retirement system. Finally, the interactive process of short-run (causality) and long-run equilibrium relationship shows that pension funds explain individual savings. Since individual savings bear the brunt of adjustment in restoring to long-run equilibrium it is the most important component in retirement planning.