Stages of the Global Financial Crisis: Is There a Wandering Asset Bubble?
Lucjan T. Orlowski
Wirtschaft im Wandel,
No. 9,
2008
Abstract
This study argues that the severity of the current global financial crisis is strongly influenced by changeable allocations of the global excess liquidity. This process is named a “wandering asset bubble”. Since its original outbreak induced by the demise of the subprime mortgage market and the mortgage-backed securities in the U.S., this crisis has reverberated across other credit areas, structured financial products and global financial institutions. Four distinctive stages of the crisis are distinguished: the meltdown of the subprime mortgage market, spillovers into broader credit market, the fallout of Bear Sterns with some contagion effects on other financial institutions, and the commodity price bubble. Monetary policy responses aimed at stabilizing financial markets are proposed.
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Die Wende in Mitteleuropa aus Sicht wirtschaftswissenschaftlicher Schulen
Ulrich Blum
Ein anderes Europa: Innovation – Anstöße – Tradition in Mittel- und Osteuropa,
2008
Abstract
The contribution inquires into the ability of different schools of economic thought to explain the decline, the transition and the later rise of the reform countries of Central and Eastern Europe. It shows that none of these disciplines, be they old or new institution economics or be they functionalist or structural schools, can provide a satisfactory complete explanation for decline and reconstruction. A consistent explanation rests on a transaction-cost approach extended to information economics. It sees false adaptations of institutions in the technological sense and with respect to incentive structures as main problems.
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Die volkswirtschaftliche Bedeutung von Private Equity
Ulrich Blum
Private Equity. Beurteilungs- und Bewertungsverfahren von Kapitalbeteiligungsgesellschaften,
2008
Abstract
Private equity is a very specific institutional way of providing private capital to enterprises. The contribution inquires why it increased its economic importance and public visibility over the last years. The role of private capital within the framework of the innovation theory, transaction cost theory and the risk theory is assessed. Private equity is a specific way of organizing the procurement with private capital for enterprises in risky markets in order to efficiently reducing transaction costs. More and above, it is important for credible market-entry strategies. As most markets are incomplete and because of tax regulations which cannot be considered to be efficient under present conditions, the economic role of private equity has increased. The increase economic role, but also importance in the firm, necessitates a steering of enterprises along value-oriented objectives. As the “hype” has decreased in summer 2007, the article ends with an assessment of future prospects.
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Improving Hartz IV after the Decision of the Federal Constitutional Court
Joachim Wilde
Wirtschaft im Wandel,
No. 8,
2008
Abstract
In 2005, the assistance for the long-term unemployed in Germany was restructured by the so-called „Hartz IV reform“. An important part of the reform was to replace the former different administrations by a single institution. However, in December 2007, the Federal Constitutional Court decided that the new institution is not consistent with the constitutional law of the Federal Republic of Germany. Thus, a reform of the institution or a change of the constitutional law is necessary.
Different reform ideas have been proposed. However, all of them only solve the juristic problem. Not one single reform tries to improve the system. Therefore, the article introduces a new concept of incentive ethics. It shows how the dependency on benefits can be left out by allocating so-called moral goods to the long-term unemployed. A first empirical result supports the concept. Pilot projects should be conducted to get more valid results.
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Globalisation Forces an Acceleration of Standardization Processes
Ulrich Blum, Henry Dannenberg
Wirtschaft im Wandel,
No. 8,
2008
Abstract
The increase in the intensity of competition in recent years, especially in markets for industrial products, has increased the pressure for businesses to innovate. This finds expression in an accelerated introduction of new products and processes, leading to a shortening of product life cycles. Equally, the pressure to innovate also increased the pressure on research and development processes of businesses.
For this reason, the patent system and the standardization system get under pressure, because these systems for codifying and saving intellectual property rights need time for necessary inspections and to reach a consensus on different proposed specifications. This article focuses on the standardization system. Under the condition of temporal pressure, there are three possibilities for standardization: abstaining from standardization, switch to non consensus-based industrial standardization or accelerate the standardization process. This article examines if standardization organisations have successfully accelerated their processes to survive in the sandwich position between shortened product cycles and accelerated market introduction of products. It turns out that the acceleration has succeeded – through a series of institutional reforms, such as a prioritization of international before the national standards by the beginning and middle of the last decade agreements.
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Wirtschaftspolitische Beratung im Zeichen der Transformation: das Institut für Wirtschaftsforschung Halle
Ulrich Blum, Martin T. W. Rosenfeld
Zeitschrift für Politikberatung,
2008
Abstract
The paper analyzes the role of scientific policy advice in modern democratic societies in general and the role of the Halle Institute for Economic Research as one of the major German economic research institutes in particular. It shows that public funded institutions must be politically independent in order to turn theory and evidence based knowledge into political advice. Typical communication channels are contract research and public hearings as well as publications in economic policy journals, a frequent presence in other print media, radio, television and internet.
The Halle Institute for Economic Research focuses on macroeconomic analyses and forecasting. In addition it scrutinizes structural change and transformation processes from a regional, innovation system, competition and urban perspective.
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How Does Industry Specialization Affect the Efficiency of Regional Innovation Systems?
Michael Fritsch, Viktor Slavtchev
Jena Economic Research Papers, Nr. 2008-058,
No. 58,
2008
Abstract
This study analyzes the relationship between the specialization of a region in certain industries and the efficiency of the region in generating new knowledge. The efficiency measure is constructed by relating regional R&D input and output. An inversely u-shaped relationship is found between regional specialization and R&D efficiency, indicating the presence of externalities of both Marshall and Jacobs’ type. Further factors influencing efficiency are spillovers within the private sector as well as from public research institutions. The impact of both the specialization and the additional factors is, however, different for regions at different efficiency levels.
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Consequences of the US-subprime Crisis Dampen Economic Growth in Germany
Wirtschaft im Wandel,
1. Sonderausgabe
2008
Abstract
The crises of the housing and the financial sector in the US and the turmoil on worldwide financial markets have clouded the prospects of the world economy for this and next year. In particular, conditions for financing consumption and investment will worsen. In addition, the price hikes for energy and food entail a redistribution of purchasing power from ordinary households to the producers of these goods. As a consequence of all this, the economy in the US will be more or less stagnating this year, and world growth will slow down. Firms in the nonfinancial sector, however, are generally in good financial condition, policy in the US takes strong measures to contain the crisis, and growth dynamics in emerging markets economies appear to be robust enough to withstand the dampening effects. In Germany, the economy is, in spite of the adverse effects from abroad and in particular the strong appreciation of the euro, still in good shape. Apparently, the economy has become more robust in the past years, partly due to increased competitiveness of German producers. Still, economic expansion will slow down, with annual growth rates of 1.8% for this year and 1.4% for 2009.
For the first time the forecast of the institutes comprises a medium term projection. For this, the potential growth rate of the German Economy is estimated to be 1.6%. As to policy recommendations, the institutes advise against the establishment of minimum wages in Germany, because they fear adverse effects for employment. In this point the IWH and its partners take a different view.
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An Assessment of Bank Merger Success in Germany
Michael Koetter
German Economic Review,
No. 2,
2008
Abstract
German banks have experienced a merger wave since the early 1990s. However, the success of bank mergers remains a continuous matter of debate.This paper suggests a taxonomy to evaluate post-merger performance on the basis of cost and profit efficiency (CE and PE). I identify successful mergers as those that fulfill simultaneously two criteria. First, merged institutes must exhibit efficiency levels above the average of non-merging banks. Second, banks must exhibit efficiency changes between merger and evaluation year above efficiency changes of non-merging banks. I assess the post-merger performance up to 11 years after the mergers and relate it to the transfer of skills, the adequacy to merge distressed banks and the role of geographical distance. Roughly every second merger is a success in terms of either CE or PE. The margin of success in terms of CE is narrow, as efficiency differentials between merging and non-merging banks are around 1 and 2 percentage points. PE performance is slightly larger. More importantly, mergers boost in particular the change in PE, thus indicating persistent improvements of merging banks to improve the ability to generate profits.
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16.04.2008 • 15/2008
2. Konferenz Regulatorische Risiken „Regulierung und Wettbewerbsfreiheit: Wem soll Wettbewerbspolitik nützen?“ am 21./22. April 2008
Am 21. und 22. April 2008 veranstalten das Institut für Wirtschaftsforschung Halle (IWH) und die Handelshochschule Leipzig (HHL) gemeinsam die 2. Konferenz Regulatorische Risiken: „Regulierung und Wettbewerbsfreiheit: Wem soll Wettbewerbspolitik nützen?“ im Konferenzraum des IWH, Kleine Märkerstraße 8, in Halle (Saale). Weitere wissenschaftliche Kooperationspartner sind die Martin-Luther-Universität Halle-Wittenberg und das CIRANO, ein gemeinsames wirtschaftswissenschaftliches Forschungsinstitut