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Since 1940, many attempts to model oil production have been proposed. These approaches, using increasing complexity, consider growing and decay of production independently of external, time-varying, causes. It is here proposed to extend the production equation by a dynamic dependency between oil and Energy Return on Energy Invested (ERoEI). The model is based on mass and energy conservation and can be applied to all extracted liquid fossil fuels. After comparison with oil extraction and ERoEI dynamics, it highlights the existence of an external, controlling parameter: the investment rate, which account for the re-investment in newly operated liquid fuel sources. Its dynamic provides explanations about the oil shock and some explanations about the peak prediction issues of the Hubbert model. Studying this evolution suggests an attempt to control the oil production in order to sustain a globally linear production, starting around 1943: at short time scale (shorter than 28-36 years), the investment rate evolved linearly. However, in order to keep a linearly growing production at long time scale, the investment rate had to evolve exponentially: this was achieved through a piecewize linear control, where the investment rate and its derivative doubled every 28-36 years. The link between this control and the oil shocks suggests the next oil shock will occur around 2035-2040.The model also allows to highlight a major issue in liquid fossil fuel production: even if gross product can be controlled and keeps growing linearly, net product, which account for the energy delivered by the oil industry to the consumer, can decrease before the gross product peaks, due to the decay of ERoEI. At this point, the energy benefit of the oil industry will inevitably decrease and oil production will slow down. Based on the present model and a sensibility study on its parameters, this tipping point will happen between 2026 and 2039. Net product of fossil liquid fuels could therefore keep growing linearly until this point, where a steep decay is expected. Hence production will be strongly asymmetric regarding the peak, contrary to the prediction suggested by Hubbert’s model. Production will finally be close to zero around 2063-2072.

Different methods to achieve zero-energy and low carbon on the scale of a building are shown by most of the research works. Despite this, the recommendations generally offered by researchers do not always correspond to the realities found during the construction of new buildings in a determined region. Therefore, a standard may not be valid in all climate regions of the world. Being aware of this fact, a study was carried out to analyse the design of new buildings respecting the “zero-energy and low carbon emission” concept in tropical climatic regions when they are compared with a base case of temperate regions. To reach this objective, the comparison between real and simulated data from the different buildings studied was developed. The results showed that the renovation of existing residential buildings allows for reducing up to 35% of energy demand and a great quantity of CO2 emissions in both climate types. Despite this, the investment rate linked to the construction of zero-energy buildings in tropical zones is 12 times lower than in temperate zones and the payback was double. In particular, this effect can be related to the efficiency of photovoltaic panels, which is estimated to be, at least, 34% higher in tropical zones than temperate zones. Finally, this study highlights the interest and methodology to implement zero-energy buildings in tropical regions.

Open Unemployment is a labor force that truly does not have a job. This study was conducted aiming to examine the effect of inflation and investment on open unemployment in Indonesia from 2002 to 2019. The data used are time series data. The analysis technique used in this study is the classical assumption testing, hypothesis testing and multiple regression analysis. The analysis shows that partially positive and significant effect on open unemployment means that the higher the inflation, the higher the open unemployment will be, and vice versa. Investment is partially negative and significant effect on open unemployment means that the higher the investment, the open unemployment will decrease, and vice versa. And inflation and investment simultaneously have a significant effect on open unemployment. The results can be expected to provide input to the government so that it can maintain a stable inflation and investment rate so that the level of open unemployment can remain stable.Keywords: Inflation, Investment, and Open Unemployment.

The large majority of the work published on firm investment is done in the neoclassical frame of a rational optimizing firm attempting to achieve optimal size. While this frame addresses one important consideration in firm investment, it has two important shortcomings that this paper will address. First, it doesn't have a clear interpretation of how the cashflows are affecting the firm investment decisions. Second, the standard approach operates on an "average firm," which in fact is significantly different from a firm with modal investment behavior. This study employs a Bayesian quantile regression model that yields two significant results. First concerning the relative responsiveness of these two neglected factors, it determines that the firms with higher investment rates have higher responsiveness to the valuation ratio and lower responsiveness to the profit rate. Second and of broader political economic note, it finds a decline in the responsiveness of firm investment to these factors that is consistent with the widely discussed macroeconomic "secular stagnation" of the US economy, and within that consistency, that the decline varies across sectors, and is more pronounced in firms with higher investment rates.

Since 1940, many attempts to model world oil production have been proposed. These approaches, using increasing complexity, consider the growing and decay of production independently of external, time-varying, causes. It is here proposed to extend the production equation by modelling a dynamic dependency between oil production and its Energy Return on Energy Invested (ERoEI), based on mass and energy conservation. The ERoEI equation is derived according to the second principle. It leads to a Lotka-Volterra set of equations, which can be applied to all liquid fossil fuels. The model obtained, after comparison with oil extraction and ERoEI evolution on the period 1960-2010, illustrates the production dynamic and the existence of an external, controlling parameter: the investment rate, which account for the re-investment in newly operating liquid fuel sources. The evolution of this parameter provides some possible explanations about the progress of the oil shocks and also some possible explanations about the peak prediction issues of the classical Hubbert model. Studying this evolution also suggests an attempt to control the liquid fuel production in order to obtain a linear time evolution on the period 1960-2010 through an apparently linearly growing investment rate: the oil game. Unfortunately, in order to keep a linearly growing production at long time scale, the investment rate has actually to evolve exponentially: the linear growth is in fact a short time scale approximation of the control required to play the oil game. The model also allows to highlight a major issue in liquid fuel production: even if the gross product can be controlled and keeps growing linearly, the net product, which account for the energy delivered by the oil industry to the world, is falling down faster and faster, due to the decrease of ERoEI. At some point, the net energy benefit will be equal to zero and liquid fuel production will stop, except if energy is given to the oil industry to keep extracting oil. In anyway, liquid fuels would become an energy sink instead of an energy source. Based on the model presented in this study, this will happen between 2027 and 2033. Production of liquid fuels could therefore keep growing linearly until this point, where a quick collapse is expected. Hence production will be strongly asymmetric regarding the peak, contrary to the prediction suggested by Hubbert’s model.

International audience; In view of the Feldstein–Horioka (1980) puzzle, this study examines the relationship between the investment rate and the saving rate using annual data from Norway for 1830 to 2017. The nonlinear version of the autoregressive distributed lag (ARDL) cointegration methodology developed by Shin (2014), based on the linear ARDL bounds cointegration testing approach of Pesaran et al. (2001), is implemented. The findings show that there is a long-term cointegration relationship between the saving rate and investment rate. The nonlinear ARDL model indicates that there are short-run but no long-run asymmetric effects. It is concluded that Norway respects its intertemporal budget constraint and that international capital mobility is high.

In recent years, the expansion of sugarcane cultivation in Brazil and its growing importance in the Brazilian economy have been driven by a sharp increase in fuel alcohol production. This increase in fuel alcohol production was accompanied by increasing interest regarding the impacts of fuel crops in Brazil. In this study, regions of sugarcane expansion into deforested areas in the Atlantic Forest were studied by applying the emergy theory and indices. Environmental and economic inputs and the sustainability of the sugarcane production system were evaluated with the emergy method. The transformity (TR) was equal to 1.78E+11 seJ kg-1, the yield rate (EYR) was equal to 1.30, the investment rate was equal to 3.29, the environmental load rate was equal to 4.33, the renewability rate was equal to 18.77, and the exchange rate was equal to 1.09. The emergy indices of corn, cassava, wheat, and sugarcane (as raw materials for ethanol production) were used. In Brazil, sugarcane production for ethanol production was more emergetically sustainable based on the analysed emergy indices. RESUMO A expansão da cana de açúcar no Brasil nos últimos anos e sua crescente importância na economia brasileira a partir do início do ano 2000, impulsionada pelo aumento vertiginoso da produção de álcool combustível, trás à tona o interesse em estudar os impactos dessa cultura no território brasileiro. A partir desta premissa, usou-se como campo de estudo as regiões de expansão da cana de açúcar em áreas desmatadas de mata atlântica. A teoria e os índices emergéticos foram aplicados. As entradas ambientais e econômicas e de sustentabilidade do sistema de produção da cana de açúcar foram avaliados usando a metodologia emergética. A transformidade (TR) foi igual a 1,78E+11 Sej kg-1, a taxa de rendimento (EYR) igual 1,30, a taxa de investimento de 3,29, a taxa de carga ambiental foi igual a 4,33, a taxa de renovabilidade de 18,77 e a taxa de intercâmbio de 1,09. Os índices emergéticos de quatro culturas usadas como matéria prima para produção de etanol foram comparados, o milho, a mandioca, o trigo e a cana de açúcar. De acordo com os índices a produção de cana de açúcar como matéria prima na produção de etanol no Brasil é mais sustentável emergeticamente considerando os índices emergéticos analisados.

For the past nearly forty years, China has experienced average annual real GDP growth of close to ten percent, much of it driven by investment and capital accumulation. By 2014, gross capital formation had reached 46 percent of aggregate expenditures. This paper documents the role of investment in driving economic growth in China, questions how much longer China can sustain a relatively high investment rate, and examines the arguments that have been offered for an impending drastic reduction in investment. It also notes that investment in China remains broad-based across all economic sectors, with little specialization; the size of the Chinese economy may allow continued comprehensive development across all economic sectors. At the same time, the relative size of foreign investment in China has become negligible and the China growth story thus has become a domestic one.

The investment-intensive growth model of the People's Republic of China (PRC) is often viewed as state-driven and ultimately unsustainable. But largely unnoticed, a shift has taken place. This paper examines the changes in investment patterns since 2003 and the potential impact of industrial policies on these patterns. The point of view is macroeconomic, based on economy-wide data with various breakdown. Significant shifts in investment patterns across sectors and ownership forms have occurred over time, supporting a new growth model with a reduced role of the state, and these shifts appear driven more by market factors than by government policies.

The investment-intensive growth model of the People’s Republic of China (PRC) is often viewed as state-driven and ultimately unsustainable. But largely unnoticed, a shift has taken place. This paper examines the changes in investment patterns since 2003 and the potential impact of industrial policies on these patterns. The point of view is macroeconomic, based on economy-wide data with various breakdown. Significant shifts in investment patterns across sectors and ownership forms have occurred over time, supporting a new growth model with a reduced role of the state, and these shifts appear driven more by market factors than by government policies.

This paper examines the impact of dynamic retailer investments in green operations while considering the reference price effect. A replenishment problem based on joint pricing, dynamic investment in green operations, preservation technology, and optimal replenishment times for deteriorating items is considered as a way to maximize retailer profit. In this problem, the demand rate depends on the sales and reference prices as well as green concern level. Optimal control theory is employed to obtain a dynamic investment rate, and a simulated annealing algorithm is used to find the solution of the nonlinear constraint optimization problem, which determines the price, preservation technology investment, and replenishment cycle time. In addition, computational simulations and sensitivity analyses are carried out to offer managerial insights. The findings suggest that continuous investment in green operations and preservation technology can significantly improve the retailer's financial performance. The consumer reference price is an important influence on the retailer's decision to invest in green operations. Furthermore, results show that the higher price sensitivity of the market always discourages the retailer from investing in green operations. The retailer needs to invest more in green operations for products with relatively high unit value.

The paper regards the link between the population of enterprises carrying out economic activity and pursuing investment projects of all sorts. The business demography statistics focusing on real enterprises population’s events (such as births and deaths) is analyzed in terms of its descriptive statistical appearance in Romania to point out the divergent patterns as compared to some aggregates at the European Union level. Starting from the evidence that business dynamics revealed by the business demography statistics is a key source of information for analyzing the prospects of business and entrepreneurial activity, the paper suggests using a well known statistical measure – the z score to address the subject of the specific historical pattern in the companies’ demography in Romania. The usage of enterprise birth rates, death rates and the two-year survival rates is chosen for statistical analysis as they are part of the structural indicators used to monitor the progress of the Europe 2020 agenda. The investment rate which is one of the key indicators for economic sector is provided for the euro area and some EU state members.

Impact of population on economic growth had been questioned a long time ago, Classical economist, Adam Smith, emphasizes that high rate of population growth would support economic growth through specialization and division of labor. In other hand, Thomas R. Mathus, another classical economist, emphasizes the negatives effect of population investment rate and in turn results in a lower of economic growth.

This paper explores the links between economic growth and human development, identifying two chains, one from economic growth to human development, and the other, conversely, from human development to economic growth. The various links in each chain are explored, together with a review of some existing empirical material on their importance. The paper examines the significance of the relationships, for the chains as a whole and for particular links in them, with the help of cross-country statistics for the period 1970-92. It finds that there exists a strong positive relationship in both directions and that public expenditure on social services and female education are especially important links determining the strength of the relationship between economic growth and human development, while the investment rate and income distribution are significant links in determining the strength of the relationship between human development and economic growth. The existence of these chains gives rise to the potential for virtuous or vicious cycles of development, with good or bad performance on HD and economic growth reinforcing each other over time. The paper concludes by classifying the actual performance of developing countries into these virtuous and vicious cycles, as well as identifying lop- sided performers, with good performance in one dimension but not the other, and explores how country classification can change over time. We find that lop-sided development almost never persists: countries which are initially lop-sided favoring economic growth always lapse into the vicious category; but countries where HD is favored can move into the virtuous category. This has strong sequencing implications, implying that, while ideally both HD and economic growth should be jointly promoted, HD should be given priority where a choice is necessary.

This paper proposes and illustrates a methodology to assess the economic cost of the sovereign risk finance instruments available to the Government of Ethiopia and its development partners for financing the shock-responsive scalability component of the Productive Safety Net Programme. The methodology involves: (i) specifying rules for when additional expenditures would be triggered in each woreda; (ii) specifying alternative risk finance strategies; and (iii) analyzing the costs of each risk financing strategy, including sensitivity and scenario testing of the results. The methodology is applied to a hypothetical set of rules for drought-responsive scalability, and a range of potential risk finance strategies.

As stated by the New Institutional Economics theory, transaction costs play a relevant role in economics and, according to the extent of such costs, agents make investment decisions. Actually, transaction costs may represent a disincentive to entrepreneurship. This work aims to verify whether transaction costs are related to investment rate and foreign direct investment rate (FDI) in different business environments. The results suggest that foreign investors do not have precise information about other countries as domestic investors do; as it is observed, only the relation between transaction costs and investment rate is significant. Furthermore, there is evidence that the business environments of BRIC countries are less developed when compared to business environments of other countries in the study

Evidence illustrates that investment in infrastructure is essential to accelerate inclusive growth. Indeed, a number of Sub-Saharan African (SSA) countries have begun to devote greater resources to large-scale public investment projects. Nevertheless, while massive projects can potentially generate large benefits there are considerable risks. Cost overruns, poor implementation quality, inadequate operational and maintenance capacity, and negative social or environmental impacts can severely undercut a project’s anticipated social and economic returns. Moreover, projects, which are expensive to develop and maintain can impact on debt dynamics and in some cases macroeconomic stability. Yet, given the complex nature of such projects it is often difficult to ascertain whether it is worthwhile to proceed with a project and if so, how should it be financed and implemented. Historically, computable general equilibrium (CGE) models have been used to assess the prospective impacts of large public investment projects. However, such models are a complex and time-consuming process and are often too broad to precisely capture the localized impact of specific projects. This paper proposes a simple, but more user-friendly model. By inputting information on the project’s construction, operation, and anticipated returns, the user is able to assess the project’s net impact on the economy and weigh up the costs and benefits of different approaches. The model was developed in response to a request from the Nigerien authorities to assess the macroeconomic impact of Niger’s Kandaji Dam project. It found that while costs would equal more than 10 percent of 2013 GDP during 2014-48, the expansion of domestic production spurred by increased demand during the construction phase will increase GDP by 0.25 percent above the baseline projection and boost fiscal revenues by an additional 0.45 percentage points of GDP.

This second edition covers the year 2014 and the first quarter of 2015 and presents the economic outlook for 2015–2017. Beyond the review of recent economic developments, the report highlights the main results of the World Bank’s analytical work in the Republic of Congo with the aim to promote the consistency of the country’s economic policies in the medium and long term. This edition covers a variety of macroeconomic topics, from policies and economic indicators for the real sector to public finance, the monetary position and the external sector. It shows that Congo’s economy grew strongly in 2014 despite the significant decline in the price of oil. The lower oil prices will have an even greater impact in 2015 as they bring down domestic demand. Moreover, this edition looks in particular at the impact of volatile oil prices on the country’s economy, emphasizing the most appropriate fiscal policies in this context.

Ethiopia has experienced a growth acceleration over the past decade on the back of an economic strategy emphasizing public infrastructure investment and supported by heterodox macro-financial policies. To analyze the country’s growth performance during 2000–13, the paper employs a neoclassical cross-country System Generalized Method of Moments regression model. The analysis finds that accelerated growth was driven by public infrastructure investment and restrained government consumption, and supported by a conducive external environment. Macroeconomic challenges arising from declining private credit, real currency overvaluation, and relatively high inflation held back some growth. The model accurately predicts Ethiopia’s growth over the period of analysis and is robust to country-specific parameter heterogeneity and alternative infrastructure variables. Looking ahead, model simulations under alternative policy scenarios are indicative that growth may decelerate in the coming decade, making it challenging for Ethiopia to attain its middle-income country target by 2025. Although simulated growth rates do not vary much by policy scenario, the paper discusses some of the emerging risks associated with a continued reliance on the current infrastructure financing model and potential future adjustments.

First in a series, which aims to analyze the recent economic and financial situation in Côte d'Ivoire, this report analyzes the main macroeconomic developments and structural policies of the country from 2013 until mid-2014. It also reflects on the underlying factors of the strong economic recovery in Côte d'Ivoire since the end of the post-election crisis, to assess the likelihood of sustained economic growth and significant poverty reduction in the country. Finally, the report analyzes the effects of declining oil prices and the appreciation of the dollar against the euro and the CFA franc on the Ivorian economy. This edition does not examine the impact of strong economic growth on the Ivoirian population's well-being indicators such as, poverty, employment and inequality. Within the scope of this report, the objective is to understand the factors contributing to the strong economic recovery in Côte d'Ivoire. This economic update is targeted toward a larger audience, in order to stimulate constructive debate on public policy in the country and between the country and its development partners.

All the Governments of Croatia should acknowledge the importance of the economic policythat will encourage higher saving rates thus enabling correlation with the investment rate withthe scope of reaching important macroeconomic goals, such as the GDP and employmentrates increase, etc., without in any way endangering the macroeconomic stability of thenational economy. Regardless of the great impact savings had on the investments, theimplementation of the economic or investment policy on behalf of the Right-wingGovernment of Croatia had a great impact in creating the discrepancy in thesaving-investment ratio, than it was the case with the Left-wing Government of Croatia. If theRight–wing Government of Croatia starts implementing the economic policy with the solescope of reaching higher saving rates than the former ones, complying with their ideology,and focusing less on how to opportunistically reach middle voters, they will influenceeffectively the saving and investment correlation, thus lessening the saving-investment gapand reaching the macroeconomic stability. However, if the Right-wing Governmentopportunistically turn to the “middle voters” instead of following their ideology`s programme,this could lead to the decrease in efficiency of some economic policy measures with the goalof reaching a certain saving-investment correlation. On the other hand, with the growth insaving rates, Left-wing Government of Croatia can influence effectively its correlation withthe investment rates, but still in a lesser proportion compared to the Right–wing Governmentof Croatia. With the Left–wing Government of Croatia opportunistically orienting on the“middle voters” that would facilitate their position in achieving the macroeconomic stabilityand thus enforcing their influence on the saving-investment correlation, as would not be thecase if only complying with their left oriented party`s programme.

The paper takes advantage of the Italian experience in the Lehman crisis to test the effects of banking shocks on the real decisions of client firms. The analysis exploits plant-level data and models the magnitude of the shock with banks’ pre-crisis holding of Dollar-denominated assets and liabilities. After controlling for demand conditions I document the existence of a bank-lending channel affecting the investment rate, the amount of borrowing, and the probability of financial constraints of client firms. This transmission mechanism is characterized by a flight to quality away from risky borrowers, with stronger effects for undercapitalized and illiquid banks or financial institutions that depend more upon bank-based sources of finance. JEL classification: E22, G01, G21.

The paper focuses on the actuarial models of defined contribution pension plan. Through assumptions and calculations, the expected replacement ratios of three different defined contribution pension plans are compared. Specially, more significant considerable factors are put forward in the further cost and risk analyses. In order to get an assessment of current status, the paper finds a relationship between the replacement ratio and the pension investment rate using econometrics method. Based on an appropriate investment rate of 6%, an expected replacement ratio of 20% is reached.

This paper includes three parts: external economic environment, part one includes: global environment, regional environment, and risks. Vietnam's recent economic development, part two includes: a relatively stable macroeconomic situation, growth at record low, booming exports despite a slowing economy, sharp turnaround in external accounts, inflation dynamics, monetary policy, fiscal policy, and near-term outlook. Structural reforms and medium-term outlook, part three includes: context, restructuring of state-owned enterprises, banking Sector development, and poverty reduction.

Since 2004 (Ethiopian Fiscal Year (EFY) 1997), Ethiopia has experienced strong and generally broad-based real economic growth of around 10.6 percent on average between then and 2011. Growth over the last nine years was far beyond the growth rates recorded in aggregate terms for Sub-Saharan Africa (SSA), which on average only reached 5.2 percent, less than half of Ethiopia's average real gross domestic product (GDP) growth rate during that period. Inspired by the East Asian experiences for a comparison of selected indicators and policies of Ethiopia and China/Korea), growth was induced through a mix of factors including agricultural modernization, the development of new export sectors, strong global commodity demand, and government-led development investments. The initial double digits growth rates have now manifested slightly lower but remain at high single-digit levels. The economy is expected to stabilize at around seven to eight percent in 2012, largely owing to improved performance in the agriculture sector. GDP growth is likely to stay around that margin up until 2016 (EFY 2008) driven by rising foreign investment and exports (Economist Intelligence Unit 2012). High inflation persists, but is on a slightly decreasing trend. Economic growth brought with it positive trends in reducing poverty, in both urban and rural areas. Ethiopia follows a strategy of increasing exports to facilitate growth. This is appropriate given the currently limited size of its domestic market and it is consistent with the development experience of some of the recently successful countries, particularly in East Asia. Export of goods growth is to a good extent driven by volume growth across a variety of product groups, which indicates that this growth is a result of recent efforts to increase and diversify the export base. Overall export and import developments result in a significantly increased trade deficit by 43 percent, up from US$5.5 billion in 2010/11 to US$7.9 billion.

Despite an unfavourable global economy, economic growth in Bangladesh is projected at close to 6 percent in fiscal 2013 (FY13). Adverse external demand and domestic supply constraints continue to be a drag on growth. Shortfalls in exports and investments due to a possible protracted crisis in the euro area and internal supply constraints may underpin the moderation of growth. Investment targets of the medium term budget framework 2013 to 2017 face major obstacles in shortage of electricity and gas supplies, and poorly functioning roads and ports. One positive prospect on the investment front is the increase in foreign direct investment in FY12, which surpassed the US$ 1 billion for the second time in Bangladesh's history. Fiscal policy is back on track. Fiscal performance in FY12 was favourable, notwithstanding increasing subsidies. The overall budget deficit in FY12 is estimated at 4.5 percent of Gross Domestic Product (GDP). Domestic financing of the deficit declined to 3.2 percent of GDP, from 3.5 percent in FY11. Lower government borrowing from the banking system in the second half of FY12 was a welcome reversal from worrying trends in the first half of the year. The FY13 budget deficit target 5 percent of GDP is modest, though higher than the estimated 4.5 percent of FY12, and is likely to be undershot primarily because of a shortfall in the implementation of the ambitious Tk 550 billion annual development programs, by now a familiar pattern. However, the financing of the deficit may be a challenge with a projected US$2.2 billion net external financing need, substantially more than the $1.4 billion of the revised FY12 budget. The rest of the deficit is projected to be financed from domestic sources, with a still heavy 69 percent reliance on bank borrowing. Bangladesh's economic outlook is subject to several near-term risks. Possible intensification of the euro area crisis may deepen Bangladesh's export slump of the last six months; escalation of global food prices may reverse the recent decline in food inflation; global oil price shock will place the balance of payments under pressure again and shrink fiscal space; banks are susceptible to credit and market risk and the global economic vulnerabilities; and increased political instability and labour unrest may depress investments further.

This policy note examines Thailand's programs for preventing poverty among the elderly, and suggests options for improving the effectiveness of these programs. The number of elderly people in Thailand will increase dramatically over the next 30 years, and the elderly already have a higher poverty rate than the population as a whole. Although Thailand currently has a total of eight pension programs, the majority of the benefits go to those who are not poor. In addition, unlike most countries, Thailand lacks a pension and provident fund supervision agency or a consolidated financial institution regulator, and does not appear to have a well-articulated national pension policy. This has led to the development of two major sets of pension programs, with one group sponsored by the ministry of labor and the social security office, and the other by the ministry of finance and the securities commission. These are also supplemented by an assortment of social assistance and community programs sponsored by the ministry of social development and human security and the ministry of interior. This policy note will examine the above issues in more detail and recommend policy options to simplify and coordinate the various pension and social assistance programs aimed at preventing poverty among the elderly, target more spending at the elderly poor, and assure long-term fiscal sustainability.

In 2011, India's economic growth has slowed to below 7 percent and the stock markets mirrored the weakening economic conditions, but recovered somewhat in early 2012. Industrial sector output growth briefly slipped into negative territory. On the demand side, fixed investment and consumption growth slowed. India's exports were growing very strongly through 2011 despite the worsening economic conditions in Europe, which continued to be India's most important export market. The balance of payments continued to be in surplus during April-September 2011, but the Reserve Bank of India (RBI) reserves declined by a small amount since then. The rupee nevertheless depreciated by 20 percent between August and December, before recovering somewhat in early 2012. Macroeconomic policies presented a mixed picture: the central government is likely to miss the ambitious target for fiscal consolidation it had set in the FY2011-12 budget by about one percent of Gross Domestic Product (GDP). Slippages are due to lower-than-expected revenues and increasing outlays on subsidies, which had been given low budgetary allocations in anticipation of strong policy changes, which failed to materialize. In India, the slowdown in GDP growth witnessed over the last two quarters is likely to extend into the coming fiscal year because of the weakness in investment. In FY2011-12 and FY2012-13, GDP growth is forecast to reach around 7-7.5 percent, a significant slowdown from the 9-10 percent growth in the run-up to the global financial crisis. The slowdown is at least partly caused by structural problems (power projects facing delays due to the lack of coal and gas feedstock, mining and the telecom sectors hit by corruption scandals, unavailability of land and infrastructure).