Police Reorganization and Crime: Evidence from Police Station Closures
Sebastian Blesse, André Diegmann
Abstract
Does the administrative organization of police affect crime? In answering this question, we focus on the reorganization of local police agencies. Specifically, we study the effects police force reallocation via station closures has on local crime. We do this by exploiting a quasi-experiment where a reform substantially reduced the number of police stations. Combining a matching strategy with an event-study design, we find no effects on total theft. Police station closures, however, open up tempting opportunities for criminals in car theft and burglary in residential properties. We can rule out that our effects arise from incapacitation, crime displacement, or changes in employment of local police forces. Our results suggest that criminals are less deterred after police station closures and use the opportunity to steal more costly goods.
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Banks' Funding Stress, Lending Supply and Consumption Expenditure
H. Evren Damar, Reint E. Gropp, Adi Mordel
Abstract
We employ a unique identification strategy linking survey data on household consumption expenditure to bank-level data to estimate the effects of bank funding stress on consumer credit and consumption expenditures. We show that households whose banks were more exposed to funding shocks report lower levels of nonmortgage liabilities. This, however, only translates into lower levels of consumption for low income households. Hence, adverse credit supply shocks are associated with significant heterogeneous effects.
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04.04.2019 • 9/2019
Joint Economic Forecast Spring 2019: Significant cooling of the economy – Political risks high
Berlin, April 4 – Germany’s leading economics research institutes have revised their forecasts for economic growth in 2019 significantly downward. They expect Germany’s gross domestic product to increase by 0.8%. This is more than one percentage point less than in autumn 2018, when the forecast was still for 1.9% growth. In contrast, the institutes confirm their previous forecast for the year 2020: gross domestic product is expected to increase by 1.8%. These are the results of the Joint Economic Forecast for spring 2019, which will be presented in Berlin on Thursday.
Oliver Holtemöller
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Connecting to Power: Political Connections, Innovation, and Firm Dynamics
Ufuk Akcigit, Salomé Baslandze, Francesca Lotti
NBER Working Paper,
No. 25136,
2018
Abstract
How do political connections affect firm dynamics, innovation, and creative destruction? To answer this question, we build a firm dynamics model, where we allow firms to invest in innovation and/or political connection to advance their productivity and to overcome certain market frictions. Our model generates a number of theoretical testable predictions and highlights a new interaction between static gains and dynamic losses from rent-seeking in aggregate productivity. We test the predictions of our model using a brand-new dataset on Italian firms and their workers, spanning the period from 1993 to 2014, where we merge: (i) firm-level balance sheet data; (ii) social security data on the universe of workers; (iii) patent data from the European Patent Office; (iv) the national registry of local politicians; and (v) detailed data on local elections in Italy. We find that firm-level political connections are widespread, especially among large firms, and that industries with a larger share of politically connected firms feature worse firm dynamics. We identify a leadership paradox: when compared to their competitors, market leaders are much more likely to be politically connected, but much less likely to innovate. In addition, political connections relate to a higher rate of survival, as well as growth in employment and revenue, but not in productivity – a result that we also confirm using a regression discontinuity design.
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27.09.2018 • 18/2018
Joint Economic Forecast Autumn 2018: Upturn Loses Momentum
Berlin, 27 September – Germany’s leading economics research institutes have downwardly revised their forecasts for 2018 and 2019. They now expect economic output to increase by 1.7 percent in 2018, and not 2.2 percent as forecast in spring. They also scaled back their 2019 forecast slightly from 2.0 to 1.9 percent. These are the results of the Joint Economic Forecast for autumn 2018 that will be presented in Berlin on Thursday.
Oliver Holtemöller
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Upturn Loses Momentum – World Economic Climate Grows Harsher: Joint Economic Forecast Autumn 2018
Externe Monographien,
No. 2,
2018
Abstract
The economic upturn in Germany is entering its sixth year, but is losing momentum. This is due to both demand and supply side factors. On the one hand, Germany’s key sales markets have weakened in line with the slowdown in world trade. On the other hand, a growing number of companies are apparently facing production-side bottlenecks, especially in terms of labour and sourcing intermediate goods. This overlaps with problems in the automotive industry related to the introduction of the new World Harmonised Light Vehicle Test Procedure (WLTP), which has clearly impacted gross domestic product (GDP) growth due to the branch’s economic weight. Adjustment problems, however, should be overcome in the course of the winter half year. Stimuli from fiscal policy measures will also take effect as of the beginning of 2019. After 1.7% growth this year, economic output will increase at rates of 1.9% in 2019 and 1.8% in 2020. Employment will continue to expand clearly, although at a slower pace. The number of registered unemployed persons will approach the 2 million-mark by the end of the forecasting horizon. Inflation will pick up from an average rate of 1.8% this year to 2.0% in 2019 and 1.9% in 2020. Despite its expansionary fiscal stance, the German government will continue to post a budget surplus, although this can be expected to fall from 54 billion euros to around 40 billion euros.
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31.07.2018 • 16/2018
Fairness pays off
When companies arbitrarily cut their wages, the motivation and productivity of the employees decrease – this is clear. Less obvious, however: employees also become less productive even if it is their colleagues who are treated unfairly and not them. This was confirmed by a research group led by Sabrina Jeworrek at the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association.
Sabrina Jeworrek
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25.05.2018 • 12/2018
The resistance of employers against works councils
Germany votes. However, this time it’s not about the politicians – instead it’s about the works councils. It’s certainly worthwhile: Many studies have shown that works councils all in all have a positive impact on productivity, wages and profits. Despite this, employers are sometimes very resistant to the idea of staff involvement in company decision-making. A common argument is that such participation limits managerial freedom and that employers are willing to sacrifice the benefits of staff participation in return for greater room for manoeuvre. Steffen Müller from the Halle Institute for Economic Research Halle (IWH) – Member of the Leibniz Association now provides an alternative economic justification for employer resistance: Employer associations are dominated by small and medium-sized enterprises, and in these works councils – in contrast to large firms – often produce no positive economic benefits.
Steffen Müller
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Urban Occupational Structures as Information Networks: The Effect on Network Density of Increasing Number of Occupations
Shade T. Shutters, José Lobo, Rachata Muneepeerakul, Deborah Strumsky, Charlotta Mellander, Matthias Brachert, Teresa Farinha, Luis M. A. Bettencourt
Plos One,
forthcoming
Abstract
Urban economies are composed of diverse activities, embodied in labor occupations, which depend on one another to produce goods and services. Yet little is known about how the nature and intensity of these interdependences change as cities increase in population size and economic complexity. Understanding the relationship between occupational interdependencies and the number of occupations defining an urban economy is relevant because interdependence within a networked system has implications for system resilience and for how easily can the structure of the network be modified. Here, we represent the interdependencies among occupations in a city as a non-spatial information network, where the strengths of interdependence between pairs of occupations determine the strengths of the links in the network. Using those quantified link strengths we calculate a single metric of interdependence–or connectedness–which is equivalent to the density of a city’s weighted occupational network. We then examine urban systems in six industrialized countries, analyzing how the density of urban occupational networks changes with network size, measured as the number of unique occupations present in an urban workforce. We find that in all six countries, density, or economic interdependence, increases superlinearly with the number of distinct occupations. Because connections among occupations represent flows of information, we provide evidence that connectivity scales superlinearly with network size in information networks.
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19.04.2018 • 7/2018
Joint Economic Forecast Spring 2018: Germany’s Economic Experts Raise Forecast Slightly
Berlin, 19 April – Germany’s leading economic experts raised their forecasts for 2018 and 2019 slightly in their Spring Joint Economic Forecast released on Thursday in Berlin. They now expect economic growth of 2.2 percent for this year and 2.0 percent for 2019, versus 2.0 percent and 1.8 percent respectively in their autumn forecast. “The German economy is still booming, but the air is getting thinner as unused capacities are shrinking“, notes Timo Wollmershaeuser, ifo Head of Economic Forecasting. Commenting on the new German government’s economic policy, he adds: “It is precisely when the government’s coffers are full that fiscal policy should reflect the implications of its actions for overall economic stability and the sustainability of public finances. The extension of statutory pension benefits outlined in the coalition agreement runs counter to the idea of sustainability.”
Oliver Holtemöller
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