asset price inflation
Tobias Knedlik, A. Knorr
Systeme monetärer Steuerung - Analyse und Vergleich geldpolitischer Strategien - Schriften zu Ordnungsfragen der Wirtschaft, Band 86,
No. 86,
2007
Abstract
Most of the influential central banks managed to bring inflation down to a sustainable path in the last two decades. However, during the same time asset prices increased significantly. From the perspective of economic policy, this development might constitute a problem in the case that price increases are not due to changes in fundamentals but are of a speculative nature. During the current past the number of asset price bubbles increased. The aim of this contribution is to analyze policy options with regard to asset price inflation. We identify the relevant markets, discuss their specific price mechanisms, discuss transmission mechanisms, and the usefulness of monetary policy and alternative instruments to deal with asset price inflation. We show that, once asset price inflation is present, monetary policy can do little to stop processes of speculative bubbles. It is the more important that that alternatives are considered. These include the analysis of monetary conditions, a straight forward communication, better regulation, and a strengthening of institutions that allow for diversifying risks to handle the necessary structural changes with lowest possible economic costs.
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Effects of European Competition Policy Reform for Central East Europe - an Institutional Perspective
Johannes Stephan, Jens Hölscher
Intellectual Economics,
No. 1,
2007
Abstract
With the Central and East European countries increasingly included into the international division of labour in the European Economic space, we are prompted to ask whether this integration operates on a level playing field with respect to competition policy. In fact, a comparison between the more advanced West European countries and countries in Central and East Europe reveals that effectiveness of implementation of competition law and policy and intensity of competition are lower in the East and in particular also in the new EU member countries of Central East Europe, where the institutional framework of the West had been taken over some years ago now. In this situation, the EU recently decided to reform competition policy by delegating some of its powers to national competition agencies. We discuss whether this reform will likely spur competition or whether this may turn out to be rather ill-designed for the particularities in post-socialist economies.
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Determinanten des Erfolgs im Transformationsprozess der mittel- und osteuropäischen Länder - eine empirische Würdigung der Beiträge von Karl Wohlmuth
Tobias Knedlik
Ökonomische Systeme im Wandel der Weltwirtschaft/Economic Systems in a Changing World Economy - Festschrift zum 65. Geburtstag von Professor Dr. Karl Wohlmuth,
2007
Abstract
In his academic career Prof Dr Karl Wohlmuth is, among others, concerned with questions of the economics of transformation. In early contributions regarding the transformation process of Eastern European countries, he deducts policy recommendations for a success-ful transformation process. The present paper summarizes the analyses of Wohlmuth and empirically evaluates - as an ex post analysis - determinants of success in the transforma-tion process. The central question is whether the determinants as identified by Wohlmuth had a significant influence on the success of transformation. The results are that the factors ‘reform of the private sector’, ‘liberalization of the labor market’, and ‘fiscal consolidation’ have been of special importance. It could therefore be shown that the factors that have been early identified by Wohlmuth played in deed an important role in the transformation proc-ess. Thus, his recommendations are of relevance for the ongoing process of transformation.
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Enhanced Cooperation in an Enlarged EU
Götz Zeddies, J. Ahrens, Renate Ohr
Jahrbuch für Wirtschaftswissenschaften,
No. 2,
2007
Abstract
The paper addresses the need for more flexibility in the integration process of the European Union after its recent eastward enlargement. The increasing number of decision-makers and the increasing heterogeneity of economic structures, financial constraints, societal preferences, and political interests impeded political decision making in the EU. In order to avoid a rank growth of integration and yet to strengthen the momentum of flexibility, so-called enhanced cooperation appears to be an appropriate instrument to be applied to the overall integration process. In this context the paper analyzes different possible developments of selected common policies in the EU if enhanced cooperation is practised by a sub-group of EU-members. Based on cluster analysis, similarities and distinctions among the EU members with respect to some specific policy realms are elaborated to identify clusters, or clubs, of countries which may apply the instrument of enhanced cooperation in the specific policy fields.
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The Economic Geography of Offshoring.
Ulrich Blum
Offshoring Journal,
No. 1,
2007
Abstract
Offshoring is defined as the moving of entrepreneurial functions or business functions to other places, mostly third countries, or ordering the respective services from an independent company in a third country. Today, offshoring activities are mostly interesting if they relate to the service, especially those parts in which digital processes play an important role. Also activities with low transaction costs and advantages of locations are best suited for offshoring. But the question of what to outsource and what to keep in-house is also related to the limits of the firm and the limits of a legal system.
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The East German Cement Cartel: Cartel Efficiency and Policy after Economic Transformation
Ulrich Blum
Eastern Economic Review,
2007
Abstract
In 2003 the German Antitrust Commission (GAC) proved the existence of a cartel in the German cement industry. The German cement producers involved in the case were fined € 661 million for having established quotas to extract additional rents. One of the main centers of this cartel was East Germany, where the East German Cement Combine with its giant facilities had been sold, in the early 1990s, to four large producers by Treuhand in the process of privatizing the economy. Only in respect to in this market did all defendants concede having had a part in forming a cartel.
In this paper, we challenge the argument of excess revenue that the GAC puts forward for the East German market. We argue that legal evidence does not necessarily translate into economic evidence. We show that demand for cement is realized in geographical and, to a more limited extent, in product space. Thus, in the absence of cartels we would expect monopolistic competition to prevail. We argue that any transition in the market regime, from the cartel to the post cartel period, must be traceable in the individual firm’s demand function which differs from the clients’ demand function because of costs for spatial and product differentiation. Within the framework of an econometric model, we cannot identify any structural changes in demand. Most likely, imports from Poland and the Czech Republic were dumped into the East German market and some medium sized producers were responsible for the cartel never working.
Finally the paper shows how difficult it is to generate competition in certain industries even under the umbrella of a well-established market economy, i.e. that of West Germany, and that the openness of the economy, i.e. trans-border shipments, are decisive.
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Book Review: Philippe Burger: Sustainable Fiscal Policy and Economic Stability, 2003
Tobias Knedlik
Africa – Commodity Dependence, Resource Curse and Export Diversification, African Development Perspectives Yearbook 2007, No. 12,
2007
Abstract
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Einkommenssicherung, Arbeitsmarktpolitik und Beschäftigung in Ostdeutschland
Herbert S. Buscher
Wirtschaft im Wandel,
No. 6,
2007
Abstract
The paper presents three approaches currently discussed, which might be useful attempts to protect income not to fall below a certain threshold. These concepts are either useful in the case of unemployment or for employees in the low wage sector of the economy. The approaches discussed have recently been published or have been discussed in the public. These are a minimum wage concept, a special variant of subsidized wages as favoured by the German Council of Economic Experts, and finally a workfare approach as suggested by the IZA Bonn. After briefly discussing the estimated employment effects of the various approaches, the paper addresses the question how the East German labour market will be affected by these measures.
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Demographic development and its economic consequences
Joachim Ragnitz, Lutz Schneider
Wirtschaft im Wandel,
No. 6,
2007
Abstract
Within the next decades, East Germany will continue to face strong demographic challenges. In addition to shrinking, the ageing of population and labour force will more and more affect the economic development of the new Länder. Against this background, the question rises whether the shift of workforce age structure will influence growth and innovation potential as well as structural change. The IWH recently has focused on this topic widely ignored by the research literature so far. On the basis of selected methods and data, the economic impact of workforce ageing was empirically evaluated. The first issue concerns the impact of age on productivity. Based on two separate empirical investigations, the conclusion can be drawn that above a certain stage, age diminishes productivity. But higher levels of experience might partly compensate for this reduction. Secondly, the innovation effects of ageing have been analyzed. Again, significant age effects arise. Employees at the age of about 40 years turn out to be the most innovative part of the workforce. Furthermore, the analysis shows that engineers are particularly subject to age effects. A third study sheds light on the challenging consequences of ageing on entrepreneurship potential. Hence, independently of the increasing problem of skill shortages, ageing itself will unfavourably affect growth, innovation and structural change. Though political options are limited due to the more or less fixed demographic trends, appropriate instruments regarding economic, family and education policy might lower the identified age effects.
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Effectiveness of Competition Law: A Panel Data Analysis
Franz Kronthaler
IWH Discussion Papers,
No. 7,
2007
Abstract
The paper explores what macroeconomic factors can tell us about the effectiveness of recently enacted national competition laws. Qualitative evidence suggests that numerous countries fall short in implementing competition law. Furthermore, there seems to be significant differences between countries. To examine what factors might contribute to the explanation of effectiveness of competition law panel regression analysis is used. The results indicate that the level of economic development matters, however the institutional learning curve is also relevant. Furthermore, larger countries should be more concerned with competition advocacy activities than smaller countries and it seems to be the case that the problem of capture of competition law is serious in countries with high levels of corruption.
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