Climate policies do not operate in isolation but propagate through global production networks, affecting industries beyond national borders. This paper combines international input-output data with a granular instrumental variable approach to capture how foreign regulations transmit through upstream and downstream linkages. Distinguishing between market-based policies, non-market regulations, and technology support, the analysis shows that foreign climate policies can enhance domestic productivity, with effects shaped by industry characteristics and operating through technological adjustment along supply chains. The results underscore the importance of accounting for international spillovers when evaluating the economic impact of environmental regulation.

We exploit staggered real estate transaction tax (RETT) hikes across German states to identify the effect of house price changes on mortgage credit supply. Based on approximately 33 million real estate online listings, we construct a quarterly hedonic house price index (HPI) between 2008:q1 and 2017:q4, which we instrument with state-specific RETT changes to isolate the effect on mortgage credit supply by all local German banks. First, a RETT hike by one percentage point reduces HPI by 1.2%. This effect is driven by listings in rural regions. Second, a 1% contraction of HPI induced by an increase in the RETT leads to a 1.4% decline in mortgage lending. This transmission of fiscal policy to mortgage credit supply is effective across almost the entire bank capitalization distribution.

This paper examines the impact of complex yet precise language, particularly financial jargon, on information dissemination and ultimately market efficiency. As a natural laboratory, we analyze the information exchanged during earnings conference calls, where we instrument jargon with the Plain Writing Act of 2010. Our findings suggest that the Act‘s promotion of plain language usage results in a reduction in complex financial jargon for US firms. However, in contrast to the presumed benefits of accessible language, this reduction in jargon is associated with a decrease in market efficiency, implying that the Act may inadvertently hinder information flow. This finding is particularly important at the juncture where human-generated information is received by machines, which are known to be vunerable to ambiguous inputs.

We investigate how global banks’ macroeconomic expectations for borrower countries influence their credit supply. Utilizing granular data on varying expectations among banks lending to the same firm at the same time, combined with an instrumental variable approach, we find that more optimistic GDP growth expectations for a borrower country are strongly linked to increased credit supply. Specifically, a one standard deviation increase in a lender’s GDP growth expectation for the borrower’s country corresponds to an increase of 8.46 percentage points in the loan share, equivalent to approximately 0.75 standard deviations of the loan share and $75.35 million in loan amount. In contrast, global banks’ short-term inflation expectations do not show a significant impact on their credit supply.

Accurate macroeconomic forecasts are essential for effective policy decisions, yet their precision depends on the accuracy of the underlying assumptions. This paper examines the extent to which assumption errors affect forecast accuracy, introducing the average squared assumption error (ASAE) as a valid instrument to address endogeneity. Using double/debiased machine learning (DML) techniques and partial linear instrumental variable (PLIV) models, we analyze GDP growth forecasts for Germany, conditioning on key exogenous variables such as oil price, exchange rate, and world trade. We find that traditional ordinary least squares (OLS) techniques systematically underestimate the influence of assumption errors, particularly with respect to world trade, while DML effectively mitigates endogeneity, reduces multicollinearity, and captures nonlinearities in the data. However, the effect of oil price assumption errors on GDP forecast errors remains ambiguous. These results underscore the importance of advanced econometric tools to improve the evaluation of macroeconomic forecasts.

Mit Antrag vom 11. März 2025 fordert die BSW-Fraktion im Sächsischen Landtag, gesetzliche Renten bis zu einer Höhe von 2.000 Euro im Monat steuerlich freizustellen, um die hohen Preissteigerungen der vergangenen Jahre für diese Personengruppe auszugleichen. Ein Blick auf die Einkommenssituation von Rentnern und Arbeitnehmern zeigt allerdings, dass ein Fokus allein auf die gesetzliche Rente zu kurz greift, weil Rentnerhaushalte im Durchschnitt über weitere Einnahmequellen verfügen. Zudem müssten die Einnahmeausfälle gegenfinanziert werden, wodurch andere gesellschaftliche Gruppen zusätzlich belastet würden. Schließlich würde die steuerliche Freistellung von niedrigen und mittleren Renteneinkommen deren Empfänger gegenüber Arbeitnehmern besserstellen. Auch die Arbeitsanreize für Ältere würden gemindert. Mit der Grundsicherung im Alter steht ein zielgenaueres Instrument zur Unterstützung bedürftiger Haushalte zur Verfügung.

This paper analyzes the impact of reduced tax incentives for equity financing on banks' regulatory capital ratios under the Basel III regime. We are particularly interested in a recent interest rate cut in the Italian corporate equity allowance, which reduces the relative tax advantage of equity financing. The results show that banks respond to this increased tax disparity by significantly reducing their regulatory capital while at the same time reducing their risk-taking. The decline in capital is more pronounced for small banks and outweighs the initial capital gains from the introduction of this tax instrument. Our results challenge the use of equity allowances, in that financial stability gains persist only as long as costly tax subsidies remain intact and diminish as the size of the subsidy is reduced.

We study the aggregate, distributional, and welfare effects of fiscal policy responses to Germany’s energy crisis arising in 2022 using a novel ten-agent new Keynesian (TENK) model. The crisis, compounded by the COVID-19 pandemic, led to sharp price increases and significant consumption disparities. Our model, calibrated to Germany’s income and consumption distribution, evaluates key policy interventions. We find that untargeted transfers had the largest short-term aggregate impact, while targeted transfers for lower-income households were most cost-effective. Other instruments yielded comparably limited welfare gains. The results highlight how targeted fiscal measures can address distributional effects and stabilize consumption during crises.

Arbeitsplatzzusagen stellen eine häufig genutzte industriepolitische Maßnahme dar. Die zugrundeliegende Studie evaluiert die Wirkungen von Arbeitsplatzzusagen zum Zeitpunkt der Privatisierung der Unternehmen in Ostdeutschland nach der Wiedervereinigung. Diese industriepolitische Maßnahme verlangte von den neuen Eigentümern der Unternehmen, sich zu Beschäftigungszielen zu verpflichten, wobei Strafen für Nichteinhaltung vertraglich vereinbart waren. Die Studie zeigt, dass Arbeitsplatzzusagen zu einer Polarisierung und Fehlallokation führen. Während Unternehmen mit geringer Produktivität aus dem Markt gedrängt werden, führt das industriepolitische Instrument zu Verzerrungen in der Unternehmensgröße. Um diese Verzerrungen abzubauen, haben Unternehmen einen Anreiz, in Produktivität zu investieren. Im Vergleich mit produktivitätssteigernden Subventionen zeigen sich Arbeitsplatzzusagen langfristig als weniger nachhaltig und generieren geringere Beschäftigungseffekte.