Evaluating the German (New Keynesian) Phillips Curve
Rolf Scheufele
North American Journal of Economics and Finance,
2010
Abstract
This paper evaluates the New Keynesian Phillips curve (NKPC) and its hybrid variant within a limited information framework for Germany. The main interest resides in the average frequency of price re-optimization by firms. We use the labor income share as the driving variable and consider a source of real rigidity by allowing for a fixed firm-specific capital stock. A GMM estimation strategy is employed as well as an identification robust method based on the Anderson–Rubin statistic. We find that the German Phillips curve is purely forward-looking. Moreover, our point estimates are consistent with the view that firms re-optimize prices every 2–3 quarters. These estimates seem plausible from an economic point of view. But the uncertainties around these estimates are very large and also consistent with perfect nominal price rigidity, where firms never re-optimize prices. This analysis also offers some explanation as to why previous results for the German NKPC based on GMM differ considerably. First, standard GMM results are very sensitive to the way in which orthogonality conditions are formulated. Further, model mis-specifications may be left undetected by conventional J tests. This analysis points out the need for identification robust methods to get reliable estimates for the NKPC.
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“Gleichwertigkeit der Lebensverhältnisse“ zwischen Politik und Marktmechanismus: Zusammenfassende Bewertung der Befunde und Schlussfolgerungen für regionale Entwicklungsstrategien
Martin T. W. Rosenfeld
M. T. W. Rosenfeld, D. Weiß (Hrsg.), Gleichwertigkeit der Lebensverhältnisse zwischen Politik und Marktmechanismus. Empirische Befunde aus den Ländern Sachsen. Sachsen-Anhalt und Thüringen,
2010
Abstract
The principle of „Interregional Equality“ enjoys general acceptance today in Germany. However, there is a great deal of discusssion and heated debate regarding the „correkt“ interpretation of this principle and the „correct“ means for achieving it. This ist the background against which the article is evaluating the evidence from existing empirical studies on different aspects of „Interregional Equality“. It is shown that, in Germany, there is much more euqality between the cities and regions than one would expect by only looking at indicators which are derived from the official statistics. Most impressive is the fact that in many cases, there are mechanisms, driven by the market forces, which are leading to an equalization between the wealthier cities and regions and the poorer ones.
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Is there a Superior Distance Function for Matching in Small Samples?
Eva Dettmann, Claudia Becker, Christian Schmeißer
Abstract
The study contributes to the development of ’standards’ for the application of matching algorithms in empirical evaluation studies. The focus is on the first step of the matching procedure, the choice of an appropriate distance function. Supplementary o most former studies, the simulation is strongly based on empirical evaluation ituations. This reality orientation induces the focus on small samples. Furthermore, ariables with different scale levels must be considered explicitly in the matching rocess. The choice of the analysed distance functions is determined by the results of former theoretical studies and recommendations in the empirical literature. Thus, in the simulation, two balancing scores (the propensity score and the index score) and the Mahalanobis distance are considered. Additionally, aggregated statistical distance functions not yet used for empirical evaluation are included. The matching outcomes are compared using non-parametrical scale-specific tests for identical distributions of the characteristics in the treatment and the control groups. The simulation results show that, in small samples, aggregated statistical distance functions are the better
choice for summarising similarities in differently scaled variables compared to the
commonly used measures.
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Subsidized Vocational Training: Stepping Stone or Trap? An Evaluation Study for East Germany
Eva Dettmann, Jutta Günther
IWH Discussion Papers,
No. 21,
2009
Abstract
The aim of this paper is to analyze whether the formally equal qualifications acquired during a subsidized vocational education induce equal employment opportunities compared to regular vocational training. Using replacement matching on the basis of a statistical distance function, we are able to control for selection effects resulting from different personal and profession-related characteristics, and thus, to identify an unbiased effect of the public support. Besides the ‘total effect’ of support, it is of special interest if the effect is stronger for subsidized youths in external training compared to persons in workplace-related training. The analysis is based on unique and very detailed data, the Youth Panel of the Halle Centre for Social Research (zsh).
The results show that young people who successfully completed a subsidized vocational education are disadvantaged regarding their employment opportunities even when controlling for personal and profession-related influences on the employment prospects. Besides a quantitative effect, the analysis shows that the graduates of subsidized training work in slightly worse (underqualified) and worse paid jobs than the adolescents in the reference group. The comparison of both types of subsidized vocational training, however, does not confirm the expected stronger effect for youths in external vocational education compared to workplace-related training.
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Potential Effects of Basel II on the Transmission from Currency Crises to Banking Crises – The Case of South Korea
Tobias Knedlik, Johannes Ströbel
Journal of Money,
No. 13,
2010
Abstract
In this paper we evaluate potential effects of the Basel II accord on preventing the transmission from currency crises to banking crises by analyzing the South Korean crisis of 1997. We show that regulatory capital reserves under Basel II would have been lower than those under Basel I, and that therefore Basel II would have had adverse effects on the development of the crisis. Furthermore we investigate whether the behavior of rating agencies has changed since the East Asian crisis. We find no evidence that rating agencies have started to take micro-mismatches into account. Thus, we have reservations concerning the effectiveness of Basel II.
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Deutsche Einheit – ein wirtschaftlicher Gewinn
Ulrich Blum
MUT – Zeitschrift für Kultur,
2009
Abstract
20 years after the fall of the wall the interest in the evaluation of the economic development of Germany after unification has increased. The article shows that from a Western German perspective, unification generated large gains because in an expending fail of economic development highly qualified personal from East Germany could be attracted and triggered growth in the West. This also generated a modernization of industry. The perspective on the Eastern side is more mixed. After a first transitory face, an ultra-modern industry has emerged, but gaps in the headquarter functions still exist. They can only be closed within a context of a new technology cycle. From the perspective of unified Germany, the high transfers of 1.3 trillion Euros in the last 20 years, dominantly used for stabilizing social security systems in the East, could mostly be faced out of unification-related additional economic performance in West Germany.
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Entwicklung des Fachkräftebedarfs in Thüringen bis 2015
Herbert S. Buscher, Eva Dettmann, Christian Schmeißer, Dirk Trocka, Marco Sunder
IWH-Sonderhefte,
No. 2,
2009
Abstract
On behalf of the Thuringian Ministry of Economics, Technology, and Labor, the Halle Institute for Economic Research (IWH) has conducted a survey of current labor market conditions in Thuringia. We forecast changes in labor demand within occupation groups in the period 2009-2015. According to our predictions, 80 000 additional workers are required both to replace older workers reaching retirement age and to accommodate industrial growth resulting from structural change. While the size of the working-age population will be large enough to meet this demand, there is a risk of occupational mismatch and lack of labor market integration of certain groups. In this context we devise policy recommendations. In addition, we present results of a survey of approximately 1 000 Thuringian companies. Interviews were conducted by IWH in the summer of 2008 and cover topics on previous and future staffing policy. The questionnaire focuses on companies’ strategies to meet their demand for skilled labor and their evaluation of potential measures in the fields of education, labor market, and economic policy.
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Evaluating Communication Strategies for Public Agencies: Transparency, Opacity, and Secrecy
Axel Lindner
B.E. Journal of Macroeconomics,
2009
Abstract
This paper analyses in a simple global games framework welfare effects stemming from different communication strategies of public agencies if strategies of agents are complementary to each other: Communication can either be fully transparent, or the agency opaquely publishes only its overall assessment of the economy, or it keeps information completely secret. It is shown that private agents put more weight on their private information in the transparent case than in the case of opacity. Thus, in many cases, the appropriate measure against overreliance on public information is giving more details to the public instead of denying access to public information.
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A Multidimensional Evaluation of the Effectiveness of Business Incubators: An application of the PROMETHEE outranking method
Michael Schwartz, Maximilian Göthner
Environment and Planning C: Government and Policy,
2009
Abstract
Considerable public resources are devoted to the establishment and operation of business incubators (BIs), which are seen as catalysts for the promotion of entrepreneurship, innovation activities and regional development. Despite the vast amount of research that focused on the effectiveness of incubator initiatives and how to measure incubator performance, there is still a lack of understanding of how to determine incubators that are more effective than others. Based on data from 410 graduate firms, the present article concentrates on this crucial question and compares the long-term effectiveness of five BIs in Germany by applying the multi-criteria outranking technique PROMETHEE. In particular, we investigate whether PROMETHEE is a well suited methodological approach for the evaluation and comparisons in the specific context of business incubation.
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Co-existence of Unemployment and Skilled Labour Shortage? Evidence from Thuringia
Dirk Trocka, Marco Sunder
Wirtschaft im Wandel,
No. 4,
2009
Abstract
In the light of favourable business conditions during the previous years, business organizations have repeatedly cautioned about a skilled labour shortage that could constrain future development of enterprises. While shortages may be typical of phases of economic expansion, the skilled labour shortage might turn into a permanent phenomenon if one takes into account the shrinking of the working-age population. The demographic transition occurs at an especially rapid pace in Eastern Germany. At the same time, this region still exhibits high rates of chronic unemployment, which renders the possibility of a skilled labour shortage questionable.
We focus on the federal state of Thuringia and investigate two questions. Firstly, we evaluate to what extent occupation-specific bottlenecks exist both in Germany and in Thuringia, using a set of criteria based on official labour market statistics. We find evidence of high utilization of labour supply in technical and metalworking professions in Germany. In the majority of these occupations, the same is true for Thuringia. Hence, a high level of unemployment and skilled labour shortage may coexist, at least in a transition phase. Secondly, we investigate whether companies in Thuringia already expect problems when searching for skilled personnel in the near future. For this purpose, the IWH has conducted a survey among approximately 1 000 companies. It turns out that 61% of the interviewed companies anticipate such problems, with statistically significant differences with respect to the companies’ characteristics. In addition, we discuss selected policies that companies plan to implement in the field of human resource management when anticipating problems.
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