Is the European Monetary Union an Endogenous Currency Area? The Example of the Labor Markets
IWH Discussion Papers,
Our study tries to find out whether wage dynamics between Euro member countries became more synchronized through the adoption of the common currency. We calculate bivarate correlation coefficients of wage and wage cost dynamics and run a model of endogenously induced changes of coefficients, which are explained by other variables being also endogenous: trade intensity, sectoral specialization, financial integration. We used a panel data structure to allow for cross-section weights for country-pair observations. We use instrumental variable regressions in order to disentangle exogenous from endogenous influences. We applied these techniques to real and nominal wage dynamics and to dynamics of unit labor costs. We found evidence for persistent asymmetries in nominal wage formation despite a single currency and monetary policy, responsible for diverging unit labor costs and for emerging trade imbalances among the EMU member countries.
The new social benefits scheme (Arbeitslosengeld II) and the Municipal Option Act
Wirtschaft im Wandel,
One of the most important reform measures of the German labor market relates to the harmonization of social welfare and unemployment assistence to the new ‘”Arbeitslosengeld-II”. In the context of these reform measures it is expected that local employment offices and local authorities should constitute working parties to facilitate the unemployed in finding new jobs. In the case that a local authority prefers to manage this job in its own responsibility she has the right to opt. The paper discusses possible advantages and disadvantages of this option.
Incentive effects of the corporate tax reform
Wirtschaft im Wandel,
Der Gesetzentwurf zur Reform der Unternehmensbesteuerung vom Februar des Jahres wird anhand einer mikroökonomischen Veranlagungssimulation für (westdeutsche) Personengesellschaften unterschiedlicher Größe analysiert. Der mikroökonomischen Untersuchung werden die erwarteten makroökonomischen Auswirkungen der Reform - ihre allokativen und distributiven Folgewirkungen - gegenübergestellt.