Fixed Income for Retirement Saving: TIAA
Traditional’s Lessons on Quality, Duration, Risk, and Gradual
Withdrawals. A version with some minor wording changes, no use of
color, and no URL's in the bibliography is forthcoming in the Journal
of Retirement, 2020. Mathematica output in PDF form for the
code underlying this paper is here, with brief
investigations of the Sharpe Ratios here.
Financing Retirement using U.S. Treasury
Bonds: Safe Withdrawal Rates, Mean/Standard-Deviation Frontiers, and
Endpoint-Dependence of the Safest Maturity.
Constant-Duration Bond Portfolios' Initial (Rolling)
Yield Forecasts Return Best at Twice Duration and its associated
Excel spreadsheets for locally-flat
and for sloped yield curves; and brief
Mathematica output for the proof of
Proposition 5. (The first Excel worksheet in each file is a basic
summary, and contains the value of "F" to which all other worksheets
A Simple Approach to Choice of a Parameter When
Stochastic-Decision-Making Errors have Asymmetric Costs.
The Hotelling Rule for Entropy-Constrained Economic
Growth. Forthcoming, Ecological Economics.
Risk-Minimizing Portfolio when Planning to Buy a Fixed
The Lake Powell Pipeline (pro bono
- The Washington County Water Conservancy District's model.
I corrected and extended their model here.
The Economists' September 2016 letter
critiquing the Washington County Water Conservancy District's model, and
the report accompanying that
letter. The January 2017 letter
refuting the District's criticisms of our analysis.
- June 13, 2018: At the Utah Executive Water Finance Board's meeting,
the Washington County Water Conservancy District's consultant made this
slide presentation, and I made this
one. Some preliminary remarks by me on the District's presentation
are here. To show that Slide
85 of the District's presentation demonstrates that the District
is still not planning on reimbursing the State for the entire present
value of pipeline construction costs, compare the present value
calculations I added in italics to the District's calculations of State
payments (cell M25's $1,514,697,114 if
the interest rate is 4%) to the present value calculations I added in
italics to the District's calculations of the District's repayments
(cell K45's $990,854,183 if the interest rate is 4%). According to
those two figures, the District is only planning to repay 2/3 of the
project cost's present value.
- July 2018: This explanatory document
gives the derivations of the formulas which generate some of the entries
in the LPP spreadsheet linked in the first bullet point. It also
explains the formulas needed to derive an analogous spreadsheet
for the case of the retail price being a constant pass-through over
the wholesale price (instead of being a constant percentage markup
over the wholesale price, which the earlier spreadsheet assumed).
- Here is a screen shot of the
constant-markup spreadsheet's results for the case of a $1.3 billion
construction cost, 4% interest rate, 10 initial payment-free years,
and 75% of the cost burden put on Impact Fees versus 25% put on
water rates. As the screen shot shows, the constant-markup
model predicts prices (both wholesale and retail) must rise by a
factor of 3.95 and impact fees must rise by a factor of 3.36, to
$20,506 (in 2013 dollars).
- Here is a screen shot of
the constant pass-through spreadsheet's results for the same
scenario. The constant-pass-through model predicts that retail
prices must rise by a factor of 1.70, wholesale prices by a factor
of 2.60, and impact fees again rise to $20,506.
- By contrast the District, in its June 13, 2018 presentation,
contemplates an increase in wholesale price from $0.45 per thousand
gallons (Slide 104) to potentially as high as $3.45 (Slide 68), a
factor of 7.6, and the District plans to raise the impact fee to
approximately $17,000 in 2026 (this is $12,803 in 2017 dollars
[which is 75% of $17,071, as explained on pp. 4--6 here;
cf. p. 20 here],
and about $12,000 in 2013 dollars).
- Since 2013, the price per thousand gallons of water charged by the
City of St. George in the "15,000 to 20,000 gallons per month" tier
has already increased from $1.00
- October 2018: As mentioned in the July 2018 bullet point, the District
plans on increasing impact fees to approximately "$12,000 in 2013
dollars" by 2026. The District also claims it is putting 75% of
the burden of paying for the Pipeline onto impact fees. This
one-page analysis, based on the
spreadsheets in the previous bullet point, shows that these two claims
cannot both be true: if 75% of the burden of paying for the Pipeline is
placed onto impact fees, impact fees have to be quite a bit higher than
"$12,000 in 2013 dollars" (and retail water rates would have to rise
somewhere between 60% and 300% from their 2013 level); and if the impact
fee really is "$12,000 in 2013 dollars," then that is placing less than
37% of the burden on impact fees, and the resulting required retail
water price hikes (from 2013 levels) are between 200% and 1300%.
(The latter analysis requires applying of Excel's Solver routine in a
way I have not built into the spreadsheets; screenshots of results are
available for the low-cost constant percentage markup case,
the high-cost constant percentage markup case,
the low-cost constant dollar markup case,
and the high-cost constant dollar markup case.)
All of the price increases described in this paragraph are so large that
no water from the Lake Powell Pipeline would actually be bought by
anyone until some time after 2060.
The Bear River Development
Presentation, Nov. 2019
Spreadsheet, Sept. 2019
of the Spreadsheet
Presentation, Feb. 2020
Early 2020 Update
of Report incorporating analysis of the State's October 2019 report;
its supporting Excel file and Mathematica
file in Wolfram notebook and PDF
formats; and a slide presentation on this
Severance Taxes in Utah.
Depletion, National Income Accounting, and the Value of
Optimal Dynamic Programs.”
Resource and Energy Economics 17 (1995), 137–154.
“Entropy and the Economic
A different version of this paper, including less bibliographic
information and no footnotes, appears in Cutler J. Cleveland, ed.,
Encyclopedia of Energy, 2004, Volume 2, 471–478. Amsterdam:
A LaTeX macro
file modifying the JAMTimes package (expanded (widened)
Times-Roman-like fonts used by the Journal
d'Analyse Mathématique) in various ways, among them making
the width of plus and minus signs equal to each other. Boris
Veytsman, author of the JAMTimes package, saw some merit in this
macro file. (Original version 2015; current, greatly
simplified version April 2020, reflecting version 1.625 (2020/03/02)
of Michael Sharpe's newtxmath.sty
from the newtx package at the CTAN