The East-West German Gap in Revenue Productivity: Just a Tale of Output Prices?
Matthias Mertens, Steffen Müller
Journal of Comparative Economics,
forthcoming
Abstract
East German manufacturers’ revenue productivity is substantially below West German levels, even three decades after German unification. Using firm-product-level data with product quantities and prices, we analyze the role of product specialization and show that the prominent “extended work bench hypothesis” cannot explain these sustained productivity differences. Eastern firms specialize in simpler product varieties generating less consumer value and being manufactured with less or cheaper inputs. Yet, such specialization cannot explain the productivity gap because Eastern firms are physically less productive for given product prices. Hence, there is a genuine price-adjusted physical productivity disadvantage of Eastern compared to Western firms.
Read article
Measuring Market Expectations
Christiane Baumeister
NBER WORKING PAPER SERIES,
2021
Abstract
Asset prices are a valuable source of information about financial market participants' expectations about key macroeconomic variables. However, the presence of time-varying risk premia requires an adjustment of market prices to obtain the market's rational assessment of future price and policy developments. This paper reviews empirical approaches for recovering market-based expectations. It starts by laying out the two canonical modeling frameworks that form the backbone for estimating risk premia and highlights the proliferation of risk pricing factors that result in a wide range of different asset-price-based expectation measures. It then describes a key methodological innovation to evaluate the empirical plausibility of risk premium estimates and to identify the most accurate market-based expectation measure. The usefulness of this general approach is illustrated for price expectations in the global oil market. Then, the paper provides an overview of the body of empirical evidence for monetary policy and inflation expectations with a special emphasis on market-specific characteristics that complicate the quest for the best possible market-based expectation measure. Finally, it discusses a number of economic applications where market expectations play a key role for evaluating economic models, guiding policy analysis, and deriving shock measures.
Read article
Homepage
War drives up energy prices ‒ High inflation weighs on economy Supply bottlenecks weigh on the manufacturing sector,...
See page
IWH Bankruptcy Research
IWH Bankruptcy Research The Bankruptcy Research Unit of the Halle Institute for...
See page
Overview, Contact and Opening Hours
Library The IWH scientific library is specialized in economics, corresponding to...
See page
Joint Economic Forecast
Joint Economic Forecast The joint economic forecast is an instrument for evaluating...
See page
15.04.2021 • 12/2021
Economy in East Germany shrank less than in the West, but will have weaker momentum when pandemic disappears – Implications of the Joint Economic Forecast Spring 2021 and new data for East Germany
At 3%, the increase in gross domestic product in eastern Germany in 2021 is likely to be lower than in Germany as a whole (3.7%), as the slump due to the pandemic was smaller in 2020. In the course of the economic recovery in the second half of the year, the unemployment rate is expected to fall slightly.
Oliver Holtemöller
Read press release
Courses
Courses Courses are organised in coordination with partner institutions within the...
See page
Study Programme
Study Programme The course programme is a structured curriculum that provides...
See page
DPE Course Programme Archive
DPE Course Programme Archive 2021 2020 2019 2018 2017...
See page
