This paper aims to forecast the USD/ALL exchange rate volatility in short term period in Albanian market, being that the American dollar is considered a safe currency independently to the political context in the rest of the world. Furthermore, U SD is the second foreign currency after Euro (according to financial and commercial transactions) and it is characterized by a peculiar probabilistic volatility distribution. In particular, USD volatility represents a continuous concern for economic ag ents exposed to the exchange risk. It follows that the measurement of the USD/ALL exchange rate volatility may help in the assessment and maintenance of capital needed for coverage purposes. The common financial time series dynamic models such as ARMA (1;1), ARCH (1) an d GARCH (1;1) can be used to estimate the USD/ALL exchange rate volatility in short term period. Our results suggest that, in the presence of political factors as well as external shocks derived from country’s main trade partners, the best way to estimate and forecast the USD/ALL exchange rate volatility in the short term is the use of the MS - GARCH model.

Through an Overlapping Generations Model, this paper studies the e ects of migratory ows on a pay-as-you-go (PAYGO) pension system in the presence of linear increase in life expectancy over time. As a result, we obtain that immigration is likely to induce distributional con- ict between di erent groups in society. The increasing number of contributors due to immigration will result in higher pension bene ts for both retirees and older workers. Future immigrant's pension claims imply that younger workers will either gain or lose from immigration depending on the immigrants' labour productivity. In case of small increase in life expectancy immigration increases the welfare of the majority of population, given by retirees and older workers. On the other hand, in the presence of high increase in life expectancy immigration may a ect negatively the welfare of the majority of population in the absence of further parametric reforms of the pension system.