Funding inflation

Capital market inflation, financial derivatives and pension fund capitalism Jan Toporowski... 

The major operating difficulties that confronted Bergius s promising research on coal hydrogenation were not entirely technical, however. Obtaining sufficient research funds proved a serious problem in postwar, inflation-plagued Germany. To... 

One way to minimize the impact of these opportunity costs is to supplement R D spending to off-set the funds allocated to environmental protection research. Hence, it was expected that R D spending as a per cent of sales would increase from preregulation periods because of the necessity to conduct environmental protection research. However, the ratio of R D spending to sales has actually declined from. 0424 in 1970 to. 0297 in 1976. One possible explanation is that the inflation in chemical prices has exceeded the inflation in R D costs. Over this period,... 

The amount of personal savings you will need to fund your retirement depends on several variables including inflation, return on investments, and how long you will live. You already have an assumption about inflation. You should continue to use this number. You can expect investment returns to exceed inflation by 3-4 percent. You can be conservative and add 3 percent to your assumed inflation rate or be optimistic and add 4 percent. You can estimate your life expectancy from Table 3, which is based on the IRS life expectancy tables. A brief look at the table shows that for planning purposes, it is reasonable to plan to age 90 unless you have reason to adjust this number either up or down. 

This calculation gives you an idea of the capital you must accumulate to fund your estimated retirement income needs. However, there is one more issue to consider. Most pensions are not indexed for inflation. Therefore, you need to calculate the additional capital required to maintain your pension s purchasing power. 

If you want to be sure something is left when you die, here s a plan that will work for you. Harvard University s endowment fund developed a spending guideline in 1973 to ensure a person wouldn t prematurely run out of money. The rule assumes a balanced portfolio allocated half to stocks and half to bonds and cash equivalents. It limits the first-year withdrawal to four percent of the portfolio s total value. Then, in each following year, increase this amount by the previous year s rate of inflation. Continue in this manner from year to year. For example, if you have a 500,000 portfolio, you could withdraw 20,000 in the first year. If the rate of inflation were 3.5 percent that year, you could withdraw 20,700 the second year. 

In the USA the number of scientists has almost doubled between 1968 and 1989, whereas the amount of federal funding grew by only 20% (inflation adjusted) in the same amount of time (Lederman, 1991). Research funds from industry became increasingly important. Whereas in the 80 s industries and their investors funded more basic research, they will now have to tighten their budgets considerably, because the expected products and revenues have not come as early as expected. 

Despite economic difficulties common to many Asian states in late 1997 and early 1998, the country optimistically maintains a political stability for future growth. According to the International Monetary Fund (IMF) figures in 1998, the inflation rate was 10.5 percent with 4.3 percent projected for 1999. The growth rate, previously over 8 percent, was less than 1 percent in 1998, but was anticipated to recuperate to approximately 4 to 6 percent in July 1999. The Gross National Product (GNP) is over US 10,000 per capita with about 7.5 percent of the GNP currently spent on healthcare. The exchange rate of the national currency (the Won) has fallen to about 1204 Won to the US (Status July 1999, Bank of Korea). 

Inflation had begun even before the end of the war, as the German government began to print money to repay funds it had borrowed to finance the war. After the war ended, it accelerated. An item—in this case, one U.S. dollar—that cost 14 marks in July of 1919 cost nearly 200 marks hy the heginning of 1922. The mark falls constantly and the government is helpless Haher wrote to a friend. 

Economic problems (e.g., rampant and chronic inflation, currency fluctuation and/or devaluation, difficulty of withdrawing funds from a country once the funds have been invested)... 

For the purpose of actual expenditure control, and to determine the funding requirements of the project, allowance had to be made for inflation during the construction period, capitalised pre-operating expenses and capitalised interest during construction. To this end the JEC developed a "dollars of the day" estimate of US 1475 million as shown in the second part of Table 1. 

U.S. funding of chemistry is projected to continue to barely keep up with inflation and to be concentrated in emerging and interdisciplinary areas. Core research areas of chemistry, which underlie advances in the emerging areas of science, will in all likelihood not be as well funded. Support available for the installation and operation of a diverse range of facilities to support leading-edge research in chemistry will be equally stretched thin. 

The agreement provides that Folkman and Vallee each get a research sum of about 200,000 a year, guaranteed for the years remaining in the contract that amount is likely to rise to accommodate inflation as well as anticipated progress. Further, Harvard received an undisclosed sum, estimated to be at least 12 million in endowment money, to be used initially to support persons affiliated with the Folkman-Vallee research but ultimately to be used as general funds with no stipulations. Monsanto is also equipping one floor of Harvard laboratories at a cost of 1.4 million much of the rest can be accounted for by the materials which Monsanto is supplying for the research. 

---