Banking Deregulation and Household Consumption of Durables
IWH Discussion Papers,
We exploit the spatial and temporal variation of the staggered introduction of interstate banking deregulation across the U.S. to study the relationship between credit constraints and consumption of durables. Using the American Housing Survey from 1981 to 1993, we link the timing of these reforms with evidence of a credit expansion and household responses on many margins. We find robust evidence that households are more likely to purchase new appliances and invest in home renovations and modifications after the deregulation. These durable goods allowed households to consume less electricity and spend less time in domestic activities after the reforms.
The Economic Record of the Government and Sovereign Bond and Stock Returns Around National Elections
Journal of Banking & Finance,
This paper investigates the role of the fiscal and economic record of the incumbent government in shaping the price response of sovereign bonds and stocks to the election outcome in emerging markets and developed countries. For sovereign bonds in emerging markets, we find robust evidence for higher cumulative abnormal returns (CARs) if a government associated with a relatively low primary fiscal balance is voted out of office compared to elections where the fiscal balance was relatively high. This effect of the incumbent government's fiscal record is significantly more pronounced in the presence of high sovereign default risk and strong political veto players, whereas the quality of institutions does not explain differences in effects for different events. We do not find robust effects of the government's fiscal record for developed countries and stocks.
Physical Climate Change Risks and the Sovereign Creditworthiness of Emerging Economies
IWH Discussion Papers,
I show that rising temperatures can detrimentally affect the sovereign creditworthiness of emerging economies. To this end, I collect long-term monthly temperature data of 54 emerging countries. I calculate a country’s temperature deviation from its historical average, which approximates present day climate change trends. Running regressions from 1994m1-2018m12, I find that higher temperature anomalies lower sovereign bond performances (i.e. increase sovereign risk) significantly for countries that are warmer on average and have lower seasonality. The estimated magnitudes suggest that affected countries likely face significant increases in their sovereign borrowing costs if temperatures continue to rise due to climate change. However, results indicate that stronger institutions can make a country more resilient towards temperature shocks, which holds independent of a country’s climate.
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Structural Stability of the Research & Development Sector in European Economies Despite the Economic Crisis
Journal of Evolutionary Economics,
When an external shock such as the economic crisis in 2008/2009 occurs, the interconnectedness of sectors can be affected. This paper investigates whether the R&D sector experienced changes in its sectoral integration through the recession. Based on an input-output analysis, it can be shown that the linkages of the R&D sector with other sectors remain stable. In some countries, the inter-sectoral integration becomes even stronger. Policy makers can be encouraged to use public R&D spending as a means of fiscal policy against an economic crisis.
IWH FDI Micro Database
IWH FDI Micro Database The IWH FDI Micro Database (FDI = Foreign Direct...
12.04.2017 • 20/2017
Auch der Osten ist im moderaten Aufschwung – Implikationen der Gemeinschaftsdiagnose Frühjahr 2017 für Ostdeutschland
Für das Jahr 2017 prognostiziert das Leibniz-Institut für Wirtschaftsforschung Halle (IWH) einen Anstieg des ostdeutschen Bruttoinlandsprodukts mit Berlin um 1,7% (Gemeinschaftsdiagnose für Deutschland insgesamt: 1,5%). Maßgeblicher Treiber ist wie in Deutschland insgesamt die Binnennachfrage. Insbesondere profitiert die Wirtschaft von der hohen Dynamik in Berlin und Sachsen. Die Produktion pro Einwohner bzw. Einwohnerin dürfte in diesem Jahr im Osten wohl erneut etwas schneller als im Westen steigen; somit setzt sich die Tendenz kleiner Fortschritte bei der ökonomischen Konvergenz fort.
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