Quid Pro Quo? Political Ties and Sovereign Borrowing
Gene Ambrocio, Iftekhar Hasan
Journal of International Economics,
November
2021
Abstract
Do stronger political ties with a global superpower improve sovereign borrowing conditions? We use data on voting at the United Nations General Assembly along with foreign aid flows to construct an index of political ties and find evidence that suggests stronger political ties with the US is associated with both better sovereign credit ratings and lower yields on sovereign bonds especially among lower income countries. We use official heads-of-state visits to the White House and coalition forces troop contributions as additional measures of the strength of political ties to further reinforce our findings.
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Trade Shocks, Labour Markets and Elections in the First Globalisation
Richard Bräuer, Wolf-Fabian Hungerland, Felix Kersting
Abstract
This paper studies the economic and political effects of a large trade shock in agriculture – the grain invasion from the Americas – in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today’s data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation.
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O Brother, Where Start Thou? Sibling Spillovers on College and Major Choice in Four Countries
Adam Altmejd, Andrés Barrios-Fernández, Marin Drlje, Joshua Goodman, Michael Hurwitz, Dejan Kovač, Christine Mulhern, Christopher Neilson, Jonathan Smith
Quarterly Journal of Economics,
No. 3,
2021
Abstract
Family and social networks are widely believed to influence important life decisions, but causal identification of those effects is notoriously challenging. Using data from Chile, Croatia, Sweden, and the United States, we study within-family spillovers in college and major choice across a variety of national contexts. Exploiting college-specific admissions thresholds that directly affect older but not younger siblings’ college options, we show that in all four countries a meaningful portion of younger siblings follow their older sibling to the same college or college-major combination. Older siblings are followed regardless of whether their target and counterfactual options have large, small, or even negative differences in quality. Spillover effects disappear, however, if the older sibling drops out of college, suggesting that older siblings’ college experiences matter. That siblings influence important human capital investment decisions across such varied contexts suggests that our findings are not an artifact of particular institutional detail but a more generalizable description of human behavior. Causal links between the postsecondary paths of close peers may partly explain persistent college enrollment inequalities between social groups, and this suggests that interventions to improve college access may have multiplier effects.
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International Trade Barriers and Regional Employment: The Case of a No-Deal Brexit
Hans-Ulrich Brautzsch, Oliver Holtemöller
Journal of Economic Structures,
No. 11,
2021
Abstract
We use the World Input–Output Database (WIOD) combined with regional sectoral employment data to estimate the potential regional employment effects of international trade barriers. We study the case of a no-deal Brexit in which imports to the United Kingdom (UK) from the European Union (EU) would be subject to tariffs and non-tariff trade costs. First, we derive the decline in UK final goods imports from the EU from industry-specific international trade elasticities, tariffs and non-tariff trade costs. Using input–output analysis, we estimate the potential output and employment effects for 56 industries and 43 countries on the national level. The absolute effects would be largest in big EU countries which have close trade relationships with the UK, such as Germany and France. However, there would also be large countries outside the EU which would be heavily affected via global value chains, such as China, for example. The relative effects (in percent of total employment) would be largest in Ireland followed by Belgium. In a second step, we split up the national effects on the NUTS-2 level for EU member states and additionally on the county (NUTS-3) level for Germany. The share of affected workers varies between 0.03% and 3.4% among European NUTS-2 regions and between 0.15% and 0.4% among German counties. A general result is that indirect effects via global value chains, i.e., trade in intermediate inputs, are more important than direct effects via final demand.
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Projektion der Ausgaben für die Beamtenversorgung in Deutschland bis zum Jahr 2080
Oliver Holtemöller, Götz Zeddies
Wirtschaft im Wandel,
No. 2,
2021
Abstract
Seit einigen Jahren steigt die Zahl der Pensionäre in Deutschland. Der demographische Wandel dürfte die Versorgungsausgaben von Bund, Ländern und Gemeinden in den kommenden Jahren und Jahrzehnten deutlich zunehmen lassen. In diesem Beitrag wird die Zahl der Versorgungsempfänger bis zum Jahr 2080 vorausgeschätzt und die Versorgungsausgaben werden projiziert. Im Ergebnis zeigt sich ein teilweise deutlicher Anstieg der Versorgungsausgaben der Gebietskörperschaften. Im Verhältnis zum erwarteten Zuwachs des Steueraufkommens fällt dieser jedoch beim Bund vergleichsweise moderat und auch bei Ländern und Gemeinden nicht übermäßig hoch aus. Dies geht unter anderem auf die Annahme zurück, dass der Anteil der Beamten an der Gesamtbevölkerung in Zukunft konstant bleibt. Dagegen steht die gesetzliche Rentenversicherung größeren finanziellen Herausforderungen gegenüber, weil der Anteil der Rentenempfänger an der Gesamtbevölkerung in den kommenden Jahren zunehmen wird.
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Projektion der Ausgaben für die Beamtenversorgung in Deutschland bis zum Jahr 2080
Oliver Holtemöller, Götz Zeddies
IWH Technical Reports,
No. 2,
2021
Abstract
In den vergangenen Jahren hat die Zahl der Pensionäre (ehemalige Beamte, Richter und Soldaten) in Deutschland deutlich zugenommen. Damit gehen immer höhere Versorgungsausgaben einher, die Bund, Länder und Gemeinden aufbringen müssen. Der demographische Wandel könnte in Zukunft nicht nur ausgabeseitig eine Herausforderung aufgrund weiter steigender Versorgungsausgaben darstellen, sondern auch auf der Einnahmeseite, weil die Versorgungslasten von immer weniger Steuerzahlern getragen werden müssen. Im Folgenden werden mit Hilfe eines Kohorten-Komponenten-Modells die Zahl der Versorgungsempfänger und die daraus resultierenden Versorgungsausgaben für Bund, Länder und Gemeinden bis zum Jahr 2080 geschätzt und die Konsequenzen für die öffentlichen Haushalte abgeleitet. Es zeigt sich, dass die Versorgungsausgaben der Gebietskörperschaften zwar ansteigen, die Versorgungs-Steuerquote insgesamt allerdings relativ stabil bleibt. Da die Zahl der Versorgungsempfänger bei Ländern und Gemeinden bis zum Jahr 2080 kaum zunehmen und beim Bund sogar zurückgehen wird, stehen die Gebietskörperschaften infolge der Pensionslasten vor weitaus kleineren finanziellen Herausforderungen als die gesetzliche Rentenversicherung angesichts des wachsenden Anteils der Rentenempfänger an der Gesamtbevölkerung.
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Measuring and Accounting for Innovation in the Twenty-First Century
Carol Corrado, Jonathan Haskel, Javier Miranda, Daniel Sichel
NBER Studies in Income and Wealth,
2021
Abstract
Measuring innovation is challenging both for researchers and for national statisticians, and it is increasingly important in light of the ongoing digital revolution. National accounts and many other economic statistics were designed before the emergence of the digital economy and the growing importance of intangible capital. They do not yet fully capture the wide range of innovative activity that is observed in modern economies.
This volume examines how to measure innovation, track its effects on economic activity and prices, and understand how it has changed the structure of production processes, labor markets, and organizational form and operation in business. The contributors explore new approaches to, and data sources for, measurement—such as collecting data for a particular innovation as opposed to a firm, and the use of trademarks for tracking innovation. They also consider the connections between university-based R&D and business startups, and the potential impacts of innovation on income distribution.
The research suggests potential strategies for expanding current measurement frameworks to better capture innovative activity, such as more detailed tracking of global value chains to identify innovation across time and space, and expanding the measurement of the GDP impacts of innovation in fields such as consumer content delivery and cloud computing.
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Introduction to "Measuring and Accounting for Innovation in the Twenty-First Century"
Javier Miranda
Measuring and Accounting for Innovation in the Twenty-First Century,
NBER Studies in Income and Wealth, Vol 78 /
2021
Abstract
Measuring innovation is challenging both for researchers and for national statisticians, and it is increasingly important in light of the ongoing digital revolution. National accounts and many other economic statistics were designed before the emergence of the digital economy and the growing importance of intangible capital. They do not yet fully capture the wide range of innovative activity that is observed in modern economies. This volume examines how to measure innovation, track its effects on economic activity and prices, and understand how it has changed the structure of production processes, labor markets, and organizational form and operation in business. The contributors explore new approaches to, and data sources for, measurement—such as collecting data for a particular innovation as opposed to a firm, and the use of trademarks for tracking innovation. They also consider the connections between university-based R&D and business startups, and the potential impacts of innovation on income distribution. The research suggests potential strategies for expanding current measurement frameworks to better capture innovative activity, such as more detailed tracking of global value chains to identify innovation across time and space, and expanding the measurement of the GDP impacts of innovation in fields such as consumer content delivery and cloud computing.
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Staggered Completion of the European Banking Union: Transposition Dates of the BRRD
Michael Koetter, Thomas Krause, Eleonora Sfrappini, Lena Tonzer
IWH Technical Reports,
No. 1,
2021
Abstract
In May 2014, the European Commission published the Bank Recovery and Resolution Directive (BRRD). The directive introduces rules on bank resolution and restructuring including a bailin tool. It constitutes the legal foundation underlying the Single Resolution Mechanism (SRM). Member countries of the European Union (EU) had to transpose this directive into national law by 31 December 2014 and implement the rules on resolution and restructuring of failing banks from 1 January 2015 onwards. However, many countries delayed the implementation. We assemble a dataset on national transposition dates of the BRRD across the EU-27 countries.
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Benchmarking New Zealand's Frontier Firms
Guanyu Zheng, Hoang Minh Duy, Gail Pacheco
IWH-CompNet Discussion Papers,
No. 1,
2021
Abstract
New Zealand has experienced poor productivity performance over the last two decades. Factors often cited as reasons behind this are the small size of the domestic market and distance to international partners and markets. While the distance reason is one that is fairly insurmountable, there are a number of other small advanced economies that also face similar domestic market constraints. This study compares the relative performance of New Zealand’s firms to those economies using novel cross-country microdata from CompNet. We present stylised facts for New Zealand relative to the economies of Belgium, Denmark, Finland, Netherlands and Sweden based on average productivity levels, as well as benchmarking laggard, median and frontier firms. This research also employs an analytical framework of technology diffusion to evaluate the extent of productivity convergence, and the impact of the productivity frontier on non-frontier firm performance. Additionally, both labour and capital resource allocation are compared between New Zealand and the other small advanced economies. Results show that New Zealand’s firms have comparatively low productivity levels and that its frontier firms are not benefiting from the diffusion of best technologies outside the nation. Furthermore, there is evidence of labour misallocation in New Zealand based on less labour-productive firms having disproportionally larger employment shares than their more productive counterparts. Counter-factual analysis illustrates that improving both technology diffusion from abroad toward New Zealand’s frontier firms, and labour allocation across firms within New Zealand will see sizable productivity gains in New Zealand.
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