19.12.2017 • 40/2017
The medium-term economic development in Germany from 2017 to 2022 and opportunities for fiscal policies of a new federal government
Due to the cyclical upswing in Germany, in case of unaltered legislation, the general government would achieve considerable budget surpluses in the years ahead. As a consequence, there is large fiscal scope for a new federal government. With the fiscal policy simulation model of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association, the macroeconomic effects of various fiscal policy measures are analysed. The results show that additional government expenditures, like the expansion of social benefits, do have a stronger effect on GDP than revenue cuts, like for instance tax reliefs. „Due to the already high capacity utilisation, revenue cuts seem to be advantageous from a business cycle perspective. Moreover, a reduction of the high taxes and charges on labour would, in contrast to an expansion of social benefits, have a positive effect on potential output“, says Oliver Holtemöller, head of the Department of Macroeconomics and IWH vice president.
Oliver Holtemöller
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The Macroeconomic Development of the Soviet Occupied Zone/GDR (1949 until 1989) – a Balance
Udo Ludwig
Günther Heydemann, Karl-Heinz Paqué (Hrsg.): Planwirtschaft – Privatisierung – Marktwirtschaft. Wirtschaftsordnung und -entwicklung in der SBZ/DDR und den neuen Bundesländern 1945 - 1994. Vandenhoeck & Ruprecht,
2017
Abstract
Das Growth Accounting Model wird angewandt, um den Einfluss der Faktoren Arbeit und Kapital sowie des technischen Fortschritts auf das Wachstum des Bruttoinlandsprodukts der DDR in den verschiedenen Perioden abzuschätzen. Hauptergebnis ist die Erkenntnis, dass das Zentralplanungsmodell an der Modernisierung scheiterte und nur während der Wirtschaftsreformen in der zweiten Hälfte der Sechziger die totale Faktorproduktivität den entscheidenden Einfluss auf das Wirtschaftswachstum ausübte.
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R&D Collaborations and the Role of Proximity
Philipp Marek, Mirko Titze, Clemens Fuhrmeister,
Regional Studies,
No. 12,
2017
Abstract
R&D collaborations and the role of proximity. Regional Studies. This paper explores the impact of proximity measures on knowledge exchange measured by granted research and development (R&D) collaboration projects in German NUTS-3 regions. The results are obtained from a spatial interaction model including eigenvector spatial filters. Not only geographical but also other forms of proximity (technological, organizational and institutional) have a significant influence on the emergence of collaborations. Furthermore, the results suggest interdependences between proximity measures. Nevertheless, the analysis does not show that other forms of proximity may compensate for missing geographical proximity. The results indicate that (subsidized) collaborative innovation activities tend to cluster.
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Central Bank Transparency and the Volatility of Exchange Rates
Stefan Eichler, Helge Littke
Abstract
We analyze the effect of monetary policy transparency on bilateral exchange rate volatility. We test the theoretical predictions of a stylized model using panel data for 62 currencies from 1998 to 2010. We find strong empirical evidence that an increase in the availability of information about monetary policy objectives decreases exchange rate volatility. Using interaction models, we find that this effect is more pronounced for countries with a lower flexibility of goods prices, a lower level of central bank conservatism, and a higher interest rate sensitivity of money demand.
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Coming to Work While Sick: An Economic Theory of Presenteeism With an Application to German Data
Boris Hirsch, Daniel S. J. Lechmann, Claus Schnabel
Oxford Economic Papers,
No. 4,
2017
Abstract
Presenteeism, i.e. attending work while sick, is widespread and associated with significant costs. Still, economic analyses of this phenomenon are rare. In a theoretical model, we show that presenteeism arises due to differences between workers in (healthrelated) disutility from workplace attendance. As these differences are unobservable by employers, they set wages that incentivise sick workers to attend work. Using a large representative German data set, we test several hypotheses derived from our model. In line with our predictions, we find that bad health status and stressful working conditions are positively related to presenteeism. Better dismissal protection, captured by higher tenure, is associated with slightly fewer presenteeism days, whereas the role of productivity and skills is inconclusive.
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Macro-Financial Modelling of the Singapore Economy: a GVAR Approach
Alessandro Galesi, Filippo di Mauro
Monetary Authority of Singapore Macroeconomic Review,
October
2017
Abstract
Globalisation has greatly increased the degree of interdependence across countries. Macroeconomic policy must therefore take a global perspective, particularly in the case of small open economies such as Singapore. From a modeller’s point of view, this requires considering many countries, regions and markets, as well as multiple channels of transmission, including trade and financial linkages. Cross-country interdependencies are increasingly reflected in the effects of global shocks, to oil or food prices for example, as well as technology and policy uncertainty spillovers.
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Pricing Sin Stocks: Ethical Preference vs. Risk Aversion
Stefano Colonnello, Giuliano Curatola, Alessandro Gioffré
Abstract
We develop a model that reproduces the return and volatility spread between sin and non-sin stocks, where investors trade off dividends with the ethical assessment of companies. We relax the assumption of boycott behaviour and investigate the role played by the dividend share of sin stocks on their return and volatility spread relative to non-sin stocks. We empirically show that the dividend share predicts a positive return and volatility spread. This pattern is reproduced by our model when dividends and ethicalness are complementary goods and investors are sufficiently risk averse.
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Criminal Network Formation and Optimal Detection Policy: The Role of Cascade of Detection
Liuchun Deng, Yufeng Sun
Journal of Economic Behavior and Organization,
September
2017
Abstract
This paper investigates the effect of cascade of detection, how detection of a criminal triggers detection of his network neighbors, on criminal network formation. We develop a model in which criminals choose both links and actions. We show that the degree of cascade of detection plays an important role in shaping equilibrium criminal networks. Surprisingly, greater cascade of detection could reduce ex ante social welfare. In particular, we prove that full cascade of detection yields a weakly denser criminal network than that under partial cascade of detection. We further characterize the optimal allocation of the detection resource and demonstrate that it should be highly asymmetric among ex ante identical agents.
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07.09.2017 • 33/2017
Reformvorschlag: Renten künftig an Verbraucherpreise koppeln
Bislang orientiert sich die jährliche Anpassung der Renten in Deutschland vor allem an der Entwicklung der Bruttolöhne und -gehälter. Ein Nachhaltigkeitsfaktor in der Rentenanpassungsformel berücksichtigt zudem den demographischen Wandel, dämpft also die Rentenanpassung bei einer Alterung der Bevölkerung – allerdings bislang nicht genug, um trotz eines sinkenden Rentenniveaus einen deutlichen Anstieg der Beiträge in der Zukunft zu verhindern. Zu dem bestehenden System gibt es durchaus Alternativen. So könnte das Rentenniveau bei Renteneintritt auf dem heutigen Niveau oder sogar etwas darüber fixiert werden und dennoch der Beitragsanstieg gedämpft werden, wenn die Renten derjenigen, die bereits in Rente sind, nur noch mit der Inflationsrate steigen. Der Lebensstandard bliebe dadurch erhalten, so lautet ein Vorschlag Oliver Holtemöllers, Leiter der Abteilung Makroökonomie und Vizepräsident am Leibniz-Institut für Wirtschaftsforschung Halle (IWH).
Oliver Holtemöller
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07.09.2017 • 32/2017
The German economy: Growing strongly
In the summer of 2017, the upswing in Germany continues. „For this year, we forecast gross domestic product to expand by 1.9%, as it did in 2016, and for 2018 by 2.0%” says Oliver Holtemöller, head of the Department Macroeconomics and IWH vice president.
Oliver Holtemöller
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