Bank Response to Higher Capital Requirements: Evidence from a Quasi-natural Experiment
Reint E. Gropp, Thomas Mosk, Steven Ongena, Carlo Wix
Abstract
We study the impact of higher capital requirements on banks’ balance sheets and its transmission to the real economy. The 2011 EBA capital exercise provides an almost ideal quasi-natural experiment, which allows us to identify the effect of higher capital requirements using a difference-in-differences matching estimator. We find that treated banks increase their capital ratios not by raising their levels of equity, but by reducing their credit supply. We also show that this reduction in credit supply results in lower firm-, investment-, and sales growth for firms which obtain a larger share of their bank credit from the treated banks.
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European Bank Efficiency and Performance: The Effects of Supranational Versus National Bank Supervision
Rients Galema, Michael Koetter
T. Beck, B. Casu (eds): The Palgrave Handbook of European Banking, London,
2016
Abstract
This chapter explores European bank efficiency and performance. First, the authors provide an overview of the key estimation methods for efficiency and discuss selected applications to the European banking sector. Second, they apply stochastic frontier analysis to investigate the extent to which the reallocation of supervisory powers is associated with efficiency differences between European banks. In doing so, the discussion focuses particularly on whether direct supervision by the Single Supervisory Mechanism (SSM) as opposed to national competent authority (NCA) is related to cost and profit efficiency.
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Alternatives to GDP - Measuring the Impact of Natural Disasters using Panel Data
Jörg Döpke, Philip Maschke
Journal of Economic and Social Measurement,
No. 3,
2016
Abstract
A frequent criticism of GDP states that events that obviously reduce welfare of people can nevertheless increase GDP per capita. We use data of natural disasters as quasi experiments to examine whether alternatives to GDP (Human Development Index, Progress Index, Index of Economic Well-Being and a Happiness Index) lead to more plausible responses to disasters. Applying a Differences-in-Differences approach and estimates from various panels of countries we find no noteworthy differences between the response of real GDP per capita and the responses of suggested alternative welfare measures to a natural disaster except for the Human Development Index.
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Gender Wage Discrimination: Does the Extent of Competition in Labor Markets Explain why Female Workers are Paid Less than Men?
Boris Hirsch
IZA World of Labor,
No. 310,
2016
Abstract
There are pronounced and persistent wage differences between men and women in all parts of the world. A significant element of these wage disparities can be attributed to differences in worker and workplace characteristics, which are likely to mirror differences in worker productivity. However, a large part of these differences remains unexplained, and it is common to attribute them to discrimination by the employer that is rooted in prejudice against female workers. Yet recent empirical evidence suggests that, to a large extent, the gaps reflect “monopsonistic” wage discrimination—that is, employers exploiting their wage-setting power over women—rather than any sort of prejudice.
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Foreign Funding Shocks and the Lending Channel: Do Foreign Banks Adjust Differently?
Felix Noth, Matias Ossandon Busch
Finance Research Letters,
November
2016
Abstract
We document for a set of Latin American emerging countries that the different nature of foreign funding accessed by foreign and local banks affected their lending performance after September 2008. We show that lending growth was weaker for shock-affected foreign banks compared to shock-affected local banks. This evidence represents valuable policy information for regulators concerned with the stability and well-functioning of banking sectors.
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Taxation and the International Mobility of Inventors
Ufuk Akcigit, Salomé Baslandze, Stefanie Stantcheva
American Economic Review,
No. 10,
2016
Abstract
We study the effect of top tax rates on “superstar” inventors’ international mobility since 1977, using panel data on inventors from the US and European Patent Offices. We exploit the differential impact of changes in top tax rates on inventors of different qualities. Superstar inventors' location choices are significantly affected by top tax rates. In our preferred specification, the elasticity to the net-of-tax rate of the number of domestic superstar inventors is around 0.03, while that of foreign superstar inventors is around 1. These elasticities are larger for inventors in multinational companies. An inventor is less sensitive to taxes in a country if his company performs a higher share of its research there.
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The Macroeconomic Risks of Undesirably Low Inflation
Jonas Arias, Christopher J. Erceg, Mathias Trabandt
European Economic Review,
2016
Abstract
This paper investigates the macroeconomic risks associated with undesirably low inflation using a medium-sized New Keynesian model. We consider different causes of persistently low inflation, including a downward shift in long-run inflation expectations, a fall in nominal wage growth, and a favorable supply-side shock. We show that the macroeconomic effects of persistently low inflation depend crucially on its underlying cause, as well as on the extent to which monetary policy is constrained by the zero lower bound. Finally, we discuss policy options to mitigate these effects.
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On the Distribution of Refugees in the EU
Oliver Holtemöller, Axel Lindner, Andreas Schmalzbauer, Götz Zeddies
Intereconomics,
No. 4,
2016
Abstract
The current situation regarding the migration of refugees can only be handled efficiently through closer international cooperation in the field of asylum policy. From an economic point of view, it would be reasonable to distribute incoming refugees among all EU countries according to a distribution key that reflects differences in the costs of integration in the individual countries. An efficient distribution would even out the marginal costs of integrating refugees. In order to reach a political agreement, the key for distributing refugees should be complemented by compensation payments that distribute the costs of integration among countries. The key for distributing refugees presented by the EU Commission takes account of appropriate factors in principle, but it is unclear in terms of detail. The compensation payments for countries that should take relatively high numbers of refugees for cost efficiency reasons should be financed by reallocating resources within the EU budget.
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Losing Work, Moving Away? Regional Mobility After Job Loss
Daniel Fackler, Lisa Rippe
Abstract
Using German survey data, we investigate the relationship between involuntary job loss and regional mobility. Our results show that job loss has a strong positive effect on the propensity to relocate. We also analyze whether the high and persistent earnings losses of displaced workers can in part be explained by limited regional mobility. Our findings do not support this conjecture as we find substantial long lasting earnings losses for both movers and stayers. In the short run, movers even face slightly higher losses, but the differences between the two groups of displaced workers are never statistically significant. This challenges whether migration is a beneficial strategy in case of involuntary job loss.
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