bluuebunny/crossref_metadata_2025 huggingface dataset:
Impact of Non-smoking Ordinances on Hospitality Revenues: The Case of Germany
Authors: Ahlfeldt Gabriel M. , Maennig Wolfgang
Published: April 2016

Non-smoking ordinances are among the most popular albeit controversial public health-care legislations worldwide. This article provides an empirical assessment of the impact of nonsmoking ordinances on bar and restaurant revenues in German Federal States. By application of a standard panel regression approach and a quasi-experimental research design, we find no compelling evidence for a significant impact of the introduction as well as the weakening of the legislation on revenues of bars and restaurants. Consumption pattern has either not changed at all or any reduction in spending by smokers is compensated for by a corresponding increase by non-smokers. These findings support the German - and similar - non-smoking legislations in the sense that positive externalities resulting from reduced health care cost are likely to outweigh the risk to businesses in the hospitality sector.
Who Gets the Money?
Authors: Aschhoff Birgit
Published: April 2016

In this paper I analyze which firms receive R&D project grants and how this public support evolves over time by considering in particular firm’s previous participation. The extent of the dynamics of firms’ participation within the funding scheme gives information about the openness of the scheme towards non-participating firms. Using firm-level data on German manufacturing and knowledge-intensive service firms, it turns out that participation in the funding scheme shows a rather high level of continuity. This is also confirmed by applying a multivariate approach. Firms which received funding in the past are more likely to be selected for public funding again. Moreover, a firm’s size and knowledge capabilities increase the probability of entering the scheme.
Z-Tests in Multinomial Probit Models under Simulated Maximum Likelihood Estimation: Some Small Sample Properties
Authors: Ziegler Andreas
Published: April 2016

This paper analyzes small sample properties of several versions of z-tests in multinomial probit models under simulated maximum likelihood estimation. Our Monte Carlo experiments show that z-tests on utility function coefficients provide more robust results than z-tests on variance covariance parameters. As expected, both the number of observations and the number of random draws in the incorporated Geweke-Hajivassiliou-Keane (GHK) simulator have on average a positive impact on the conformities between the shares of type I errors and the nominal significance levels. Furthermore, an increase of the number of observations leads to an expected decrease of the shares of type II errors, whereas the number of random draws in the GHK simulator surprisingly has no significant effect in this respect. One main result of our study is that the use of the robust version of the simulated z-test statistics is not systematically more favorable than the use of other versions. However, the application of the z-test statistics that exclusively include the Hessian matrix of the simulated loglikelihood function to estimate the information matrix often leads to substantial computational problems.
Drobisch’s Legacy to Price Statistics
Authors: Auer Ludwig von
Published: April 2016

This paper attempts to establish a greater awareness among researchers for the noteworthy contributions to price index theory made by Moritz Wilhelm Drobisch (1802-1896), a German mathematician and philosopher at the Universita¨ t Leipzig. Few economists and statisticians are aware of the fact that neither Étienne Laspeyres nor Hermann Paasche originally devised the well-known price indices that presently carry their names. Moritz Wilhelm Drobisch was the first to publish them in 1871 in a treatise and, shortly thereafter, in an abridged version that appeared in this very journal. He rejected them, however, because in his view they were inappropriate measures of inflation. Instead, he devised the unit value index, which he regarded as superior to all other price index formulas. This paper contains a description of his pioneering scientific achievements together with a synopsis of his personal and professional life. Its purpose is to give credit where credit is due, but more importantly, it attempts to recognize these seminal contributions in light of the factors that have tarnished them in the recorded annals of price index history. It attempts to put them into their proper perspective.
Information or Institution?
Authors: Döhrn Roland , Schmidt Christoph M.
Published: April 2016

The accuracy of macroeconomic forecast depends on various factors, most importantly the mix of analytical methods used by the individual forecasters, the way that their personal experience is shaping their identification strategies, but also their efficiency in translating new information into revised forecasts. In this paper we use a broad sample of forecasts of German GDP and its components to analyze the impact of institutions and information on forecast accuracy. We find that forecast errors are a linear function of the forecast horizon, which serves as an indicator of the information available at the time a forecast is produced. This result is robust over a variety of different specifications. As better information seems to be the key to achieving better forecasts, approaches for acquiring reliable information early seem to be a good investment. By contrast, the institutional factors tend to be small and statistically insignificant. It has to remain open, whether this is the consequence of the efficiency-enhancing competition among German research institutions or rather the reflection of an abundance of forecast suppliers.
A Factor Model for Euro-area Short-term Inflation Analysis
Authors: Lenza Michele , Warmedinger Thomas
Published: April 2016

This paper develops a factor model for forecasting inflation in the euro area. The model can handle variables with different timeliness, sample size and frequency. We show that the forecasts based on the factor model outperform naïve random walk forecasts, a hard to beat benchmark for euro area inflation forecasts in recent years, at horizons of and beyond nine months ahead. They are also comparable, in terms of accuracy, to the judgemental forecasts prepared in the context of the Eurosystem macroeconomic projection exercises. The factor model is therefore a very suitable tool to extract the signal on current and future euro area inflation from new data releases.
Forecasting Nonlinear Aggregates and Aggregates with Time-varying Weights
Authors: Lütkepohl Helmut
Published: April 2016

Despite the fact that many aggregates are nonlinear functions and the aggregation weights of many macroeconomic aggregates are time-varying, much of the literature on forecasting aggregates considers the case of linear aggregates with fixed, time-invariant aggregation weights. In this study a framework for nonlinear contemporaneous aggregation with possibly stochastic or time-varying weights is developed and different predictors for an aggregate are compared theoretically as well as with simulations. Two examples based on European unemployment and inflation series are used to illustrate the virtue of the theoretical setup and the forecasting results.
Global Warming Induced Water-Cycle Changes and Industrial Production – A Scenario Analysis for the Upper Danube River Basin
Authors: Jeßberger Christoph , Sindram Maximilian , Zimmer Markus
Published: April 2016

Using the environmental decision support system DANUBIA, we analyze the effects of climate change on industry and compare the effectiveness of different adaptation strategies. The observed area covers Germany and Austria up to 2025. Since the main effects of climate change in this region are expected to be caused by changes in the water-cycle, we place a special focus on the exemplary region of the upper Danube catchment area. Industry is the main regional user of water resources.Water is an essential production factor and is used in almost every production process of a manufactured good. We apply estimates of regional production functions, based on AFiD-panel micro-data for Germany, to calibrate regional industrial production and water usage within DANUBIA. Thus, we are able to simulate region-specific effects of climate change and the impact of social scenarios using an innovative model of the reciprocal influences of a huge network of interdisciplinary research areas. Simulation results show wide regional differences in production site reactions as well as between differing scenarios. Comparing scenarios of moderate and serious climate change, we are able to illustrate the severe environmental effects in some regions and to determine considerable economic effects on regional economic growth.
Extending the Case for a Beneficial Brain Drain
Authors: Bertoli Simone , Brücker Herbert
Published: April 2016

Several destination countries still adopt general immigration policies, and are characterized by lower returns to education than the countries of origin of the migrants. These two stylized facts challenge the literature on the beneficial brain drain which demonstrates that migration can increase the average human capital in the sending countries if immigration policies are selective, or the skill premium at destination is higher than at origin. We propose a model with empirically sensible assumptions on immigration policies and skill premia, where individuals face heterogeneous and correlated education and migration costs. The model is consistent with a robust stylized fact, namely that the rate of migration increases with schooling, and it shows that the average level of education of the stayers can be increasing in the probability to migrate even in such a setting. Our simulation results prove that these findings hold for reasonable parameter values. This extends the case for a beneficial brain drain in a further direction.
Purchasing-power-dependent Preferences as a New Explanation of Giffen Behaviour: A Note
Authors: Heuson Clemens
Published: April 2016

This paper develops an example beyond traditional microeconomic theory that provides a new explanation of Giffen behaviour. Maslow’s hierarchy of needs suggests that an individual’s preferences are not fixed but, rather, depend on purchasing power. A decrease in purchasing power with respect to low-hierarchy goods (e.g., bread) is likely to augment an individual’s preferences for such goods and to weaken preferences for high-hierarchy goods (e.g., books). By introducing a simple purchasing-power-dependent utility function that satisfies the standard assumptions, it is shown that the preference-shifting effect can provoke Giffen behaviour.
Changes in Import Pricing Behaviour: Evidence for Germany
Authors: Stahn Kerstin
Published: April 2016

Since changes in import prices feed into consumer prices and thus might affect monetary policy decisions, policymakers need to establish whether or not German importers’ long-run pricing behaviour has changed. Of particular interest are any shifts in the importance of cost pass-through and pricing-to-market for import pricing in Germany that may have ocurred since the 1990s. We analyse pricing in single equations for 11 product categories because the factors influencing the pricing behaviour, eg competitive pressure,may well have developed differently on the individual product markets. The Saikkonen (1991) approach is applied to test the import price levels for changes in the impact of their determinants. After aggregating the findings for the individual product categories, we find that, on the whole, pricing-to-market has increased, whereas cost pass-through via foreign costs and exchange rates is lower, but not via commodity prices.
Robust Estimation of Linear Fixed Effects Panel Data Models with an Application to the Exporter Productivity Premium
Authors: Verardi Vincenzo , Wagner Joachim
Published: April 2016

In empirical studies often the values of some variables for some observations are much larger or smaller than the values for the other observations in the sample. These extreme observations, or outliers, often have a large impact on the results of statistical analyses. Conclusions based on a sample with and without these units may differ drastically. While applied researchers are usually aware of this the detection of outliers and their appropriate treatment is often dealt with in a rather sloppy manner. One reason for this habit seems to be the lack of availability of appropriate canned programs for robust methods that can be used in the presence of outliers. Our paper intents to improve on this situation by presenting a highly robust method for estimation of the popular linear fixed effects panel data model and to supply Stata code for it. In an application from the field of the micro-econometrics of international firm activities we demonstrate that outliers can indeed drive results.
Diskussionsbeitrag / Discussion Paper. Finanzverwaltung von innen: Neue Ansätze ihrer empirisch-ökonomischen Erforschung
Authors: Schöbel Enrico
Published: April 2016

Unlike economic theories of tax law enforcement, real income tax law application requires thorough interpretation of the law and the actual facts with regard to tax purposes. The automatic assessment produced by a computer program in German tax offices suggests the existence of a mechanically operated taxation akin to a weaving mill. However, empirical studies of tax administrations in the USA, the Netherlands, and Switzerland, as well as examinations carried out by the German Courts of Audit shed light on a subjective information revealing and decision making process. Unfortunately, the German tax administration does not provide individual tax assessment and tax compliance data which could be empirically analysed in comparison with the findings from abroad. Empirical economic studies are required to answer the question of how the German income tax law is applied. Thus, an expert questionnaire was developed and successfully pre-tested in tax offices with the aim of encouraging a nationwide study. A research proposal suggested interviewing tax advisers on their professional experience with tax offices. The German Federal Ministry of Finance initiated an online survey addressed to the tax advisers. The study and its results are critically reviewed with regard to methodology, previous insights, and the earlier proposal.
The Production of Historical “Facts”: How the Wrong Number of Participants in the Leipzig Monday Demonstration on October 9, 1989 Became a Convention
Authors: Opp Karl-Dieter
Published: April 2016

This paper deals with the demonstration in Leipzig on October 9, 1989, an important episode in the history of the East German Revolution. It is generally held that 70,000 demonstrators participated. This paper shows that this number is clearly wrong. The paper describes briefly the results of a survey that were inconsistent with this number and how the authors of the study proceeded to make a new estimate. The paper further outlines how the original estimate was made and found its way into the media and historical accounts. Finally, some general lessons are drawn from the case. The case study this paper focuses on is not an example of the faking of data, but rather of negligent data handling. However, it is argued that the lessons from this case discussed in the final section hold for faked data as well.
“True Believers” or Numerical Terrorism at the Nuclear Power Plant
Authors: Krämer Walter , Arminger Gerhard
Published: April 2016

For decades, there has been a heated debate about whether or not nuclear power plants contribute to childhood cancer in their respective neighbourhoods, with statisticians testifying on both sides. The present paper points to some flaws in the pro-arguments, taking a recent study prepared for the political party “Bündnis 90 /Grüne” as a specimen. Typical mistakes include an understatement of the size of tests of significance, disregard of important covariates and extreme reliance on very few selected data points.
What Fuels Publication Bias?
Authors: Auspurg Katrin , Hinz Thomas
Published: April 2016

Significance tests were originally developed to enable more objective evaluations of research results. Yet the strong orientation towards statistical significance encourages biased results, a phenomenon termed “publication bias”. Publication bias occurs whenever the likelihood or time-lag of publication, or the prominence, language, impact factor of journal space or the citation rate of studies depend on the direction and significance of research findings.

Although there is much evidence concerning the existence of publication bias in all scientific disciplines and although its detrimental consequences for the progress of the sciences have been known for a long time, all attempts to eliminate the bias have failed. The present article reviews the history and logic of significance testing, the state of research on publication bias, and existing practical recommendations. After demonstrating that more systematical research on the risk factors of publication bias is needed, the paper suggests two new directions for publication bias research. First, a more comprehensive theoretical model based on theories of rational choice and economics as well as on the sociology of science is sketched out. Publication bias is recognized as the outcome of a social dilemma that cannot be overcome by moral pleas alone. Second, detection methods for publication bias going beyond meta-analysis, ones that are more suitable for testing causal hypotheses, are discussed. In particular, the “caliper test” seems well-suited for conducting theoretically motivated comparisons across heterogeneous research fields like sociology. Its potential is demonstrated by testing hypotheses on (a) the relevance of explicitly vs. implicitly stated research propositions and on (b) the relevance of the number of authors on incidence rates of publication bias in 50 papers published in leading German sociology journals.
The Identification and Prevention of Publication Bias in the Social Sciences and Economics
Authors: Weiß Bernd , Wagner Michael
Published: April 2016

Systematic research reviews have become essential in all empirical sciences. However, the validity of research syntheses is threatened by the fact that not all studies on a given topic can be summarized. Research reviews may suffer from missing data, and this is especially crucial in those cases where the selectivity of studies and their findings affects the summarized result. So-called publication bias is a type of missing data and a phenomenon that jeopardizes the validity of systematic or quantitative, as well as narrative, reviews. Publication bias exists if the preparation, submission or publication of research findings depend on characteristics of just these research results, e. g. their direction or statistical significance. This article describes methods to identify publication bias in the context of meta-analysis. It also reviews empirical studies on the prevalence of publication bias, especially in the social and economic sciences, where publication bias also seems to be prevalent. Several proposals to prevent publication bias are discussed.
Benford’s Law as an Instrument for Fraud Detection in Surveys Using the Data of the Socio-Economic Panel (SOEP)
Authors: Schräpler Jörg-Peter
Published: April 2016

This paper focuses on fraud detection in surveys using Socio-Economic Panel (SOEP) data as an example for testing newly methods proposed here. A statistical theorem referred to as Benford’s Law states that in many sets of numerical data, the significant digits are not uniformly distributed, as one might expect, but adhere to a certain logarithmic probability function. In order to detect fraud, we derive several requirements that should, according to this law, be fulfilled in the case of survey data.We show that in several SOEP subsamples, Benford’s Law holds for the available continuous data. For this analysis, we developed a measure that reflects the plausibility of the digit distribution in interviewer clusters. We are thus able to demonstrate that several interviews that were known to have been fabricated and therefore deleted in the original user data set can now be detected using this method. Furthermore, in one subsample, we use this method to identify a case of an interviewer falsifying ten interviews not previously detected by the fieldwork organization.
Measuring the Knowledge Economy – Intangible Spending and Investment in Germany
Authors: Berger Florian
Published: April 2016

Intangible assets are largely ignored by the “traditional” System of National Accounts (SNA), although they play an increasingly important economic role. The reasons for this are the substantial measurement and valuation problems. This article applies a methodology based on Hulten (1979) and Corrado et al. (2005) to provide some indications on the amount of investment in intangible goods in the German economy. I discuss the proposed categorization approach and quantify the different components for the German economy, drawing on a number of different data sources. I show that the amount of investment in intangibles is significant. An inclusion into the SNA would add around Euro 142.4 bn to total investment in the German economy in 2004. This corresponds to an increase of almost 70%. However, an international comparison shows that Germany falls short in terms of intangible spending relative to the US and UK.
Armut im Alter – Ursachenanalyse und eine Projektion für das Jahr 2023
Authors: Kumpmann Ingmar , Gühne Michael , Buscher Herbert S.
Published: April 2016

Several factors bring about a rise in old age poverty in Germany, especially in East Germany. Using data from the German Socio-economic Panel (SOEP) we examine causes and extent of old age poverty in Germany. We begin our inquiry with a cross section regression in order to determine the impact of several factors on retirement incomes in Germany. In the second step we performan income projection of today’s 50 to 55 year-old people for the year 2023. In doing so, we take into account different sources of income, including several forms of capital income and the calculated rent of owner-occupied houses and flats.We find a significant rise in old age poverty especially in East Germany as a consequence of rising unemployment after the German unification.
Der Coupon-Handelsansatz als Modell für eine subjektbezogene Finanzierung der Kinderbetreuung / The Coupon Trading Approach as a Model for a Subject-based Financing System of Early Childhood Education and Care Services
Authors: Egbert Henrik , Hildenbrand Andreas
Published: April 2016

Improving early childhood education and care (ECEC) services is one of the challenging duties of public authorities in Germany.We think that inefficiency with respect to the quantity as well as the quality of ECEC services is caused by the prevalent object-based financing system. In this article, we tackle the issue by providing a positive analysis to the ongoing discussion about the future of publicly financed ECEC services. We present a model of a subject-based financing system for ECEC services with tradable vouchers. On the basis of this model, it is shown that by introducing tradable vouchers a more efficient allocation of resources is possible. Further, the model indicates that tradable vouchers also improve the quality of ECEC services.
Are the Real Exchange Rates of the New EU Member Countries in Line with Fundamentals? – Implications of the NATREX Approach
Authors: Frenkel Michael , Koske Isabell
Published: April 2016

This paper derives equilibrium real exchange rates for the EU member countries that joined in 2004 and in 2007. Our analysis is based on the natural real exchange rate approach and uses data for the period 1980-2007. We employ a two-step estimation strategy to deal with the limited availability and reliability of data from these countries. We first estimate the model for a panel of 17 OECD countries and then apply the estimated relationship to the new EU member countries. While the model does not support the appreciation of some of the examined currencies in 2005-2007, the development of several other currencies of the CEECs appears to be fairly in line with our NATREX estimates.
The Employment of Mothers – Recent Developments and their Determinants in East and West Germany
Authors: Hanel Barbara , Riphahn Regina T.
Published: April 2016

We apply German Mikrozensus data for the period 1996 to 2004 to investigate the employment status of mothers. Specifically, we ask whether there are behavioral differences between mothers in East and West Germany, whether these differences disappear over time, and whether there are differences in the developments for high vs. low and medium skilled females. We find substantial differences in the employment behavior of East and West German mothers. German family policy sets incentives particularly for low income mothers not to return to the labor market after birth. East German mothers’ employment outcomes matches that expected based on these policy incentives: over time East German mothers with low earnings potentials appear to adopt West German low employment patterns.
Empirical Evidence on the “Never Change a Winning Team” Heuristic
Authors: Nüesch Stephan , Haas Hartmut
Published: April 2016

“Never change a winning team” is a well-known heuristic that recommends not altering the composition of successful teams. Using game-level observations of the highest German soccer league over a period of seven seasons, we find that the number of changes in the starting line-up is significantly lower after wins than after losses, taking suspensions and unobserved team heterogeneity into account. We show that teams of coaches who follow the heuristic do not win significantly more often, and that coaches significantly decrease the number of changes in the starting line-up even after wins caused by the exogenous home field advantage. These results provide first suggestive evidence that coaches may be influenced by behavioural concerns when following the heuristic to not change winning teams.
A Market’s Reward Scheme, Media Attention, and the Transitory Success of Managerial Change
Authors: Süssmuth Bernd , Wagner Stefan
Published: April 2016

Against the background of growing media interest in professional soccer, this paper proposes a moral hazard model with costly state verification to explain how rule changes affecting the reward scheme of team performance impact on the success of managerial change. As has been shown recently based on four decades of data from the German soccer premiership by Wagner (2010), the incentive change in professional soccer leagues enacted by the FIFA in 1995/96 rendered the drastic measure of firing a coach a more efficient instrument in the clubs’ striving for success. In contrast to existing approaches, our model by accommodating the role of media interest is able to jointly explain (i) the impact of introducing an asymmetric reward scheme, (ii) of managerial turnover and (iii) of the perceived degree of ambition of a club on the athletic output of the team. It is shown that the rule change induces a higher agency cost, which is temporarily economized by clubs that change their management. This cost reducing effect temporarily enhances the efficiency of generating athletic output for top league clubs.
Employment Effects of the 2002 Winter Olympics in Salt Lake City, Utah
Authors: Baumann Robert , Engelhardt Bryan , Matheson Victor A.
Published: April 2016

Local, state, and federal governments, along with the Salt Lake City Organizing Committee, spent roughly $1.9 billion in planning and hosting the 2002 Winter Olympic Games. Event promoters suggested that the Games would increase employment in the state by 35,000 job-years. We investigate whether the 2002 Winter Olympics actually increased employment finding that the Games’ impact was a fraction of that claimed by the boosters.While the Salt Lake City Olympics did increase employment overall by between 4,000 and 7,000 jobs, these gains were concentrated in the leisure industry, and the Games had little to no effect on employment after 12 months.
The Optimal Size of German Child Care Centers and the Impact of Regulation: Estimating the Cost Function of a Regulated Multi-Product Firm
Authors: Bönisch Peter , Tagge Sven
Published: April 2016

Using a unique data set on German child care centers, we estimate a long-run multi-product cost function for child care provision in Germanywhile taking into account legal minimal labor input restrictions. For a representative child care center we find economies of scale, a U-shaped average cost curve, and indications of diseconomies of scope. The legally stipulated minimum child-to-staff ratio is manifested in a positive Lagrange multiplier, showing that modeling legal restrictions is necessary to avoid misspecification error. Our study provides a useful tool for policymakers in estimating the effects of future demographic change on child care costs.
Eine verteilungspolitische Beurteilung aktueller Reformkonzepte zur deutschen Einkommensbesteuerung / A Distributional Analysis of Recent Reform Proposals on the German Income Tax Rate
Authors: Struch Georg
Published: April 2016

The present paper investigates potential fiscal and distributional effects which emerge due to four reform scenarios on the German income tax rate. The analysis is based on a static simulation model for the German tax system using income tax micro-data. The data shows that changing the present progressive tax system to a flat-tax, which was proposed by the FDP in 2010, could reduce the tax revenue by 15 billion Euro. Such a tax regime would increase the unequal distribution and polarisation of net incomes. The IW Köln suggested an alternative tax rate in 2008. This regime would increase unequal distribution and polarisation of disposable incomes to a greater extent than the FDP-tax rate. An implementation of this income tax scale would go along with losses in tax revenue of 18.8 billion Euro. Likewise, the implementation of a 2009 SPD tax rate proposal would reduce tax revenue by 14.8 billion Euro. Although this regime would reduce unequal distribution, the effect on the polarization of disposable incomes is not definitely predictable. In contrast to all the other scenarios, the realisation of the recent SPD tax rate proposal from 2011 could enlarge tax revenue by 4.7 billion Euro. This tax regime would reduce unequal distribution and polarisation of disposable incomes even more than the present tax system.
Social Learning Theory, Cigarette Taxes and Adolescent Smoking Behavior
Authors: Ali Mir M.
Published: April 2016

In this paper we evaluate the effectiveness of cigarette taxes as a mechanism to reduce smoking rates among adolescents. In our model, we categorize individuals by their smoking frequencies and intensities instead of relying on the widely used dichotomous measure of smoking. Using data of a nationally representative sample of adolescents, we use an endogenity corrected model with school-level fixed effects to obtain our estimates. Moving beyond the conventional definition of smoking to a definition that recognizes the complex nature of addiction by categorizing smoking into various stages and also by controlling for peer and family effects together, we learn that adolescents are not necessarily the most responsive to taxes. Influence from peers and family plays a more significant role in influencing adolescent smoking.
FIRE for the Euro: A Superior Way to Bond Market Stabilization
Authors: Heinemann Friedrich
Published: April 2016

Government bond markets within the euro zone may have fallen victim to a self-fulfilling crisis of confidence. Eurobonds may contribute to stabilization in the short-run but would imply destructive disincentives and incalculable risks for joint and several guarantors. Monetary interest rate equalization through the ECB government bond purchase program poses risks for central bank credibility and price stability. This contribution proposes fiscal interest rate equalization (FIRE) as an alternative. With FIRE, countries that benefit from low interest rates as a consequence of market panics would transfers some of their savings to subsidize the borrowing of crisis countries within a conditional fiscal scheme. The paper presents FIRE’s principles and discusses its advantages over alternative stabilization approaches. Furthermore, a simulation of a FIRE specification is presented which would shield Italy and Spain against interest rates above 5 percent.
Schumpeter, Marshall, and Neo-Schumpeterian Evolutionary Economics
Authors: Rahmeyer Fritz
Published: April 2016

The focus of evolutionary economics is a process of continuous and irreversible economic and organizational change over time. Currently there is no agreement on the explanation of economic evolution.

From the perspective of the history of economic thought, at first the theoretical approaches of Schumpeter and Marshall with regard to economic development or evolution are dealt with in detail. For both authors technical and economic innovations are the engine of economic change. According to Schumpeter, they are created through newly established firms as the agents of change. For Marshall, innovations and economic development are a side effect of the manufacturing process and the division of labour. Technical and economic changes go off both gradually (Marshall) or discontinuously (Schumpeter).

After that, a concept of neo-Schumpeterian evolutionary economics is elaborated. Evolution is understood as a process of change that leads to the adaptation of complex systems, the result of the causal interaction between variation, selection and retention of variety leading to continuity over time. It has gained wide application to the theory of innovation and later to resource-based theories of the firm. Modern evolutionary economics includes the determinants of new knowledge and innovations into its analysis. Business enterprises not only follow their routine behaviour, in a dynamic view they also show capabilities to restructure their given resources and to build new ones. To sum up, technical and economic evolution are both the result of the unintentionalmarket selection through competitive forces of the environment, and of the intentional, voluntary entrepreneurial choices, based on the firm’s resources and dynamic capabilities.
Oil Price Dynamics and Monetary Policy in a Heterogeneous Monetary Union
Authors: Clausen Volker , Wohltmann Hans-Werner
Published: April 2016

This paper analyzes the dynamic effects of oil price increases in a small two-country monetary union with asymmetric wage adjustment equations. Common oil price shocks lead during the adjustment process to temporary divergences in output and inflation and also to reversals in the relative cyclical position across the monetary union. We distinguish between three types of oil price shocks: (1) an unanticipated permanent shock, (2) an unanticipated temporary shock and (3) an anticipated permanent shock.We illustrate the macroeconomic effects of these shocks by means of dynamic simulations and examine the respective stabilization role of monetary policy. While permanent oil price hikes always lead to stagflation, temporary shocks are associated with deflation in the very short run as the reduction of real income lowers the demand for the domestically produced good. The implications for monetary policy are also shock-specific. Monetary policy faces a signal extraction problem as it needs to determine whether oil price shocks are transitory or permanent in order to make appropriate decisions not only about the strength, but also the direction of monetary policy.
Körperschaftsbesteuerung und Unternehmensverschuldung: Evidenz aus einem Europäischen Firmenpanel / Capital Structure and Corporate Taxation: Empirical Evidence from European Panel Data
Authors: Stöckl Matthias , Winner Hannes
Published: April 2016

This paper analyzes the impact of corporate taxation on a firm’s debt policy. We contribute to the existing literature in two ways: (i) we explicitly model persistence in the debt-to-asset ratio, and (ii) we incorporate firm heterogeneity with respect to firm size and legal form. Empirically, this implies the use of dynamic panel data econometrics.We employ a panel of about 110,000 firms from 22 countries of the European Union between 1999 and 2007. First, we find that capital structures exhibit a substantial degree of persistence over time. Second, and in line with theoretical expectations, we find that the debt ratio is positively affected by the statutory corporate income tax rate. Specifically, we observe a marginal effect of around 0.3 in our baseline specification, translating into a short-run (long-run) elasticity of about 0.2 (0.3-1.5). Finally, our empirical results show that large firms react more sensitively to the incentives of corporate taxation, while this effect is smaller for public limited companies.
Demand for Live Orchestral Music – The Case of German Kulturorchester
Authors: Zieba Marta , O’Hagan John
Published: April 2016

This paper estimates a demand function for orchestras in Germany and in the process provides estimates of the impact of various determinants of demand for live orchestral music. Price and income are shown to be highly significant as are the quality factors included. The price elasticity is around -0.3 indicating price-inelastic demand and the income elasticity roughly 1.0 which is shown to be the net effect of two opposing forces, a gross income effect and a price-of-leisure effect. Additionally, two objective output characteristics which can positively influence concert attendance are examined. This analysis was undertaken by applying an exceptionally large panel data set for 79 orchestras over the period from 1972 to 2004 (1,313 observations). No previous study of orchestra demand was based on such a rich data set, nor used such a range of extensive variables. Some policy implications are considered in the concluding section.
Monetary Theory and Monetary Policy: Reflections on the Development over the last 150 Years
Authors: Issing Otmar , Wieland Volker
Published: April 2016

In this paper, we provide some reflections on the development of monetary theory and monetary policy over the last 150 years. Rather than presenting an encompassing overview, which would be overambitious, we simply concentrate on a few selected aspects that we view as milestones in the development of this subject.We also try to illustrate some of the interactions with the political and financial system, academic discussion and the views and actions of central banks.
Inter-industrial Relations and Sectoral Employment Development in German Regions
Authors: Kowalewski Julia
Published: April 2016

This paper analyses the impact of cluster structures on employment development in Germany according to the hypothesis of Porter (1998). It develops a new way of measuring the co-location of suppliers and buyers of intermediate goods in a region based on an input-output approach. The resulting indicator is implemented in a shift-share regression in order to analyse the importance of input-output linkages for the employment development in individual industries. One advantage of this approach is that the results can be compared to earlier studies on localization advantages according to Marshall (1890).

The results show that the availability of suppliers and customers in the same region was a major engine for job creation in specific industries in the past. In the period 1998 to 2007 this was particularly observed for service sectors, such as Air Transport or Health and Social Work but also for some manufacturing industries as well as for Agriculture and Construction. It becomes apparent from the comparison with earlier findings that agglomeration advantages are not realizable within a single industry. Positive effects rather result from the right composition of different industries that have the possibility to establish common production chains. However, for a lot of industries the intensity of inter-industrial interdependence did not play a significant role for their employment development.
Ein nutzungskostenbasierter Ansatz zur Messung des Faktors Kapital in aggregierten Produktionsfunktionen / A User Cost Approach to Capital Measurement in Aggregate Production Functions
Authors: Knetsch Thomas A.
Published: April 2016

A method is proposed to measure capital services in production. This means that productive assets are weighted according to their user costs. The user costs of the individual asset classes are estimated based on data from the national accounts and other sources. The results show that, in the observation period between 1991 and 2011, enterprises’ capital services expand faster than the officially published capital stock. For the economy as a whole, this applies only to phases of cyclical expansion. As the capital stock is aggregated using asset prices, the differences can be explained by the different weighting methods in conjunction with the varying speeds at which the individual asset types have accumulated over time. In growth accounting, different estimates of total factor productivity emerge. The methodological difference, however, does not significantly affect the estimates of parametric production function specifications.
Modified Scheffé’s Prediction Bands
Authors: Staszewska-Bystrova Anna
Published: April 2016

The formula for the Scheffé prediction bands proposed by Jordà and Marcellino (2010) is reconsidered. It is demonstrated, that in many cases of practical interest, the bands fail to satisfactorily approximate the uncertainty associated with a path-forecast. A modification of the Scheffé method is proposed which improves the coverage properties of the bands.
Die ökonomische Bewertung kleiner Reisezeiteinsparungen / The Economic Valuation of Small Travel Time Savings
Authors: Obermeyer Andy , Wieland Bernhard , Evangelinos Christos
Published: April 2016

Travel time savings are usually the most important utility component in transport infrastructure project evaluation. One of the controversial issues in research on the valuation of travel time savings is the assessment of small time savings. This article goes into this matter with specific focus on indifference thresholds in discrete choice models. Our research shows, if such thresholds exist, valuation of time savings should be differentiated according to the size of the time saving. In particular, small time savings should be valued at a lower rate than large ones. Consequences and criticism regarding this procedure are discussed. We find similarities to the currently applied evaluation methodology in the German Federal Infrastructure Plan.
Zusatzbeiträge in der Gesetzlichen Krankenversicherung / Income-independent Surcharges in German Statutory Health Insurance
Authors: Kallweit Manuel , Kohlmeier Anabell
Published: April 2016

Expenditure of the German statutory health insurance scheme will increase significantly in the future. In order to keep the system financially sound, current law plans to levy income independent surcharges. These will be complemented by a tax-financed social compensation scheme. In this paper, we analyse the effects of such surcharges on revenue on Germany’s statutory health insurance using a general equilibrium model with overlapping generations. Afterwards, we further develop the surcharges up to a flat rate employee contribution and ascertain their financial consequences and their employment and growth effects. The allocative effects of such a further development are positive. They will be more considerable if the introduction begins earlier and ends quickly. A moderate expenditure increase and a smaller shape of the compensation scheme will intensify these effects.
Liquidity and the Value at Risk
Authors: Großmaß Lidan
Published: April 2016

We introduce an intuitive method of enhancing low-frequency volatility measures used to compute Value-at-Risk (VaR) by incorporating intradaily liquidity information from the limit order book. Using the quote slope of Hasbrouck and Seppi (2001), a compound liquidity measure comprising the dimensions of bid-ask spread and log depths, as a proxy for latent liquidity, we assign states of liquidity that the asset instantaneously resides in to allow only extremal liquidity shocks to influence volatility. To forecast the liquidity states, we use the autoregressive conditional multinomial model of Liesenfeld et al. (2006). We test the method on a number of stocks and find that (1) for stocks in financial and technological sectors, only the extremal shocks to liquidity affect volatility significantly and such a liquidity-state adjusted volatility is likely to improve VaR forecasts; (2) the volatility of stock returns in most other sectors are less affected by extremal shocks to liquidity but the continuous liquidity proxy is able to explain some of the dynamics of volatility and (3) the inclusion of liquidity in VaR becomes increasingly important as the quantile under consideration becomes more extreme.
Comment on ‘‘Unemployment Compensation and Wages: Evidence from the German Hartz Reforms’’ by Stefan Arent and Wolfgang Nagl
Authors: Ludsteck Johannes , Seth Stefan
Published: April 2016

Arent and Nagl (2013) use the BA Employment panel 1998-2007 to identify effects of the German Hartz reform and find that it caused a considerable reduction of wages. Our replication study suggests that their clear and strong conclusions are based on implausible assumptions regarding the error structure of their regression models and on a too coarse modelling of the time effects. They become blurred and weak once better estimates of the standard errors are obtained and the development of wages is investigated at a finer time grid. Furthermore, Arent and Nagl’s reform effects shrink considerably when a more appropriate price index is used to deflate the wages and when the censoring of wages is treated correctly. Methodological considerations suggest that their conclusions depend on several further daring and untested assumptions.
International Investment and Firm Performance: Empirical Evidence from Small Open Economies
Authors: Siedschlag Iulia , Kaitila Ville , McQuinn John , Zhang Xiaoheng
Published: April 2016

The global financial and economic crisis has severely affected foreign direct investment, particularly the cross-border mergers and acquisitions in advanced economies. This paper examines the effects of foreign mergers and acquisitions on labour productivity and employment growth over the period 2001-2009 in six small open economies in the European Union: Austria, Belgium, Denmark, Finland, the Netherlands and Sweden. We show that the severity of the crisis has been uneven across these six economies. Taken together, our estimates suggest that foreign direct investment had stronger effects on firm performance in services than in manufacturing.
How Fast Can Firms Grow?
Authors: Murmann Johann Peter , Korn Jenny , Worch Hagen
Published: April 2016

Building on recent research on dynamic, high-growth firms - so-called “gazelles” - this paper explores a simple question that is important in both theoretical and practical terms: What is the fastest rate at which firms can grow? Based on a sample of seven high-growth firms (Cisco, GM, IBM, Microsoft, Sears, Starbucks, and US Steel), we find that 162% is the maximum sales growth rate in any one year that an established company can grow without mergers and acquisitions, while the maximum rate of employee growth is approximately 115% even including some mergers and acquisitions. All of the companies in our sample attained a maximum sales growth rate of above 50%, with most hovering around 75%. Furthermore, the firms’ growth rates exhibit similar patterns. No company experienced its maximum sales growth rate toward the latter part of its history. Every company experienced its slowest employee growth rate after attaining its maximum employee growth rate, usually within a decade of one another. Most importantly, all firms show an average sales growth that exceeds the average employee growth. This finding is an indication that successful growing firms have a superior capability to continuously improve employment efficiency and adjust organizational structures to suit an increasing workforce.