Municipal Size, Administrative Structure and Election Turnout: Consequences of Municipal Reform for the Legitimisation of Political Decision-making Processes
Martin T. W. Rosenfeld, Claus Michelsen
Gebiets- und Verwaltungsstrukturen im Umbruch: Beiträge zur Reformdiskussion aus Erfahrungen in Sachsen, Sachsen-Anhalt und Thüringen,
No. 360,
2015
Abstract
In der politischen Diskussion wird immer wieder gefordert, die Gemeinden von ihrem Gebietszuschnitt her zu vergrößern und auf eine verwaltungsmäßige interne Untergliederung der kommunalen Einheiten zu verzichten, mithin das Modell der sogenannten Einheitsgemeinden und nicht jenes der föderativ verfassten Gemeinden zu verwirklichen. Dabei werden die „Kosten“ im Sinne von volkswirtschaftlichen Nachteilen dieses zentralistischen Modells zumeist nur am Rande erwähnt, was nicht zuletzt den Problemen der Quantifizierbarkeit dieser Kosten geschuldet ist. Der Beitrag unternimmt den Versuch einer entsprechenden Quantifizierung für einen Teilaspekt der volkswirtschaftlichen Nachteile von größeren und stärker zentralisierten kommunalen Einheiten, nämlich deren negativen Effekte auf die Höhe der Wahlbeteiligung. Im Ergebnis der empirischen Untersuchungen kann gezeigt werden, dass die theoretischen Vermutungen zutreffend sind, wonach (1.) die Wahl der Organisation kommunaler Verwaltungseinheiten Auswirkungen auf die Wahlbeteiligung hat, und (2.) der Organisationstyp der Einheitsgemeinden im Vergleich zu föderativ organisierten Gemeindetypen zu einer deutlich geringeren Wahlbeteiligung führt.
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Switching to Exchange Rate Flexibility? The Case of Central and Eastern European Inflation Targeters
Andrej Drygalla
FIW Working Paper,
No. 139,
2015
Abstract
This paper analyzes changes in the monetary policy in the Czech Republic, Hungary, and Poland following the policy shift from exchange rate targeting to inflation targeting around the turn of the millennium. Applying a Markovswitching dynamic stochastic general equilibrium model, switches in the policy parameters and the volatilities of shocks hitting the economies are estimated and quantified. Results indicate the presence of regimes of weak and strong responses of the central banks to exchange rate movements as well as periods of high and low volatility. Whereas all three economies switched to a less volatile regime over time, findings on changes in the policy parameters reveal a lower reaction to exchange rate movements in the Czech Republic and Poland, but an increased attention to it in Hungary. Simulations for the Czech Republic and Poland also suggest their respective central banks, rather than a sound macroeconomic environment, being accountable for reducing volatility in variables like inflation and output. In Hungary, their favorable developments can be attributed to a larger extent to the reduction in the size of external disturbances.
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Returns to Skills around the World: Evidence from PIAAC
Eric A. Hanushek, Guido Schwerdt, Simon Wiederhold, Ludger Woessmann
European Economic Review,
January
2015
Abstract
Existing estimates of the labor-market returns to human capital give a distorted picture of the role of skills across different economies. International comparisons of earnings analyses rely almost exclusively on school attainment measures of human capital, and evidence incorporating direct measures of cognitive skills is mostly restricted to early-career workers in the United States. Analysis of the new PIAAC survey of adult skills over the full lifecycle in 23 countries shows that the focus on early-career earnings leads to underestimating the lifetime returns to skills by about one quarter. On average, a one-standard-deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers. But this masks considerable heterogeneity across countries. Eight countries, including all Nordic countries, have returns between 12 and 15 percent, while six are above 21 percent with the largest return being 28 percent in the United States. Estimates are remarkably robust to different earnings and skill measures, additional controls, and various subgroups. Instrumental-variable models that use skill variation stemming from school attainment, parental education, or compulsory-schooling laws provide even higher estimates. Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.
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Do We Need New Modelling Approaches in Macroeconomics?
Claudia M. Buch, Oliver Holtemöller
Financial Cycles and the Real Economy: Lessons for CESEE Countries,
2014
Abstract
The economic and financial crisis that emerged in 2008 also initiated an intense discussion on macroeconomic research and the role of economists in society. The debate focuses on three main issues. Firstly, it is argued that economists failed to predict the crisis and to design early warning systems. Secondly, it is claimed that economists use models of the macroeconomy which fail to integrate financial markets and which are inadequate to model large economic crises. Thirdly, the issue has been raised that economists invoke unrealistic assumptions concerning human behaviour by assuming that all agents are self-centred, rationally optimizing individuals. In this paper, we focus on the first two issues. Overall, our thrust is that the above statements are a caricature of modern economic theory and empirics. A rich field of research developed already before the crisis and picked up shortcomings of previous models.
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15th IWH-CIREQ Macroeconometric Workshop: “Identification and Causality“
Matthias Wieschemeyer
Wirtschaft im Wandel,
No. 6,
2014
Abstract
Am 1. und 2. Dezember 2014 fand am IWH in Zusammenarbeit mit dem Centre interuniversitaire de recherche en économie quantitative (CIREQ), Montréal, und der Martin-Luther Universität Halle-Wittenberg (MLU) der 15. IWH-CIREQ Macroeconometric Workshop statt. Wissenschaftlerinnen und Wissenschaftler aus dem In- und Ausland folgten auch in diesem Jahr der Einladung, ihre neuesten Forschungsarbeiten auf dem Gebiet der angewandten Makroökonometrie vorzustellen.
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Linking Distress of Financial Institutions to Macrofinancial Shocks
Alexander Al-Haschimi, Stéphane Dées, Filippo di Mauro, Martina Jančoková
ECB Working Paper,
No. 1749,
2014
Abstract
This paper links granular data of financial institutions to global macroeconomic variables using an infinite-dimensional vector autoregressive (IVAR) model framework. The approach taken allows for an assessment of the two-way links between the financial system and the macroeconomy, while accounting for heterogeneity among financial institutions and the role of international linkages in the transmission of shocks. The model is estimated using macroeconomic data for 21 countries and default probability estimates for 35 euro area financial institutions. This framework is used to assess the impact of foreign macroeconomic shocks on default risks of euro area financial firms. In addition, spillover effects of firm-specific shocks are investigated. The model captures the important role of international linkages, showing that economic shocks in the US can generate a rise in the default probabilities of euro area firms that are of a significant magnitude compared to recent historical episodes such as the financial crisis. Moreover, the potential heterogeneity across financial firms.
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Taxes, Banks and Financial Stability
Reint E. Gropp
R. de Mooij and G. Nicodème (eds), Taxation and Regulation of the Financial Sector. MIT Press,
2014
Abstract
In response to the financial crisis of 2008/2009, numerous new taxes on financial institutions have been discussed or implemented around the world. This paper discusses the connection between the incidence of the taxes, their incentive effects, and policy makers’ objectives. Combining basic insights from banking theory with standard models of tax incidence shows that the incidence of such taxes will disproportionately fall on small and medium size enterprises. The arguments presented suggest it is unlikely that the taxes will have a beneficial impact on financial stability or raise significant amounts of revenue without increasing the cost of capital to bank dependent firms significantly.
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Does Proximity Matter in the Choice of Partners in Collaborative R&D Projects? – An Empirical Analysis of Granted Projects in Germany
Mirko Titze, Philipp Marek, , Clemens Fuhrmeister
IWH Discussion Papers,
No. 12,
2014
Abstract
This paper contributes to the discussion on the importance of physical distance in the emergence of cross-region collaborative Research and Development (R&D) interactions. The proximity theory, and its extensions, is used as a theoretical framework. A spatial interaction model for count data was implemented for the empirical analysis of German data from the period from 2005 to 2010. The results show that all tested proximity measurements (geographical, cognitive, social and institutional proximity) have a significant positive influence on collaboration intensity. The proximity paradox, however, cannot be confirmed for geographical, social and institutional proximity, but for cognitive proximity.
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Executive Compensation Structure and Credit Spreads
Stefano Colonnello, Giuliano Curatola, Ngoc Giang Hoang
Abstract
We develop a model of managerial compensation structure and asset risk choice. The model provides predictions about how inside debt features affect the relation between credit spreads and compensation components. First, inside debt reduces credit spreads only if it is unsecured. Second, inside debt exerts important indirect effects on the role of equity incentives: When inside debt is large and unsecured, equity incentives increase credit spreads; When inside debt is small or secured, this effect is weakened or reversed. We test our model on a sample of U.S. public firms with traded CDS contracts, finding evidence supportive of our predictions. To alleviate endogeneity concerns, we also show that our results are robust to using an instrumental variable approach.
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Euro Area External Imbalances and the Burden of Adjustment
Filippo di Mauro, Francesco Pappadà
Journal of International Money and Finance,
November
2014
Abstract
The objective of this paper is to explore the consequences of the correction of Euro area trade imbalances on real exchange rates. This analysis requires one additional dimension with respect to the standard Global Imbalances framework à la Obstfeld and Rogoff (2005), since the adjustment takes place within and outside the Euro area. Both types of adjustments are analyzed in a three-country general equilibrium model with a tradable and a non-tradable sectors, and heterogeneous firms built upon Pappadà (2011). ECB (CompNet) data are used to measure the differences in firm size and productivity dispersion across Euro area countries. With respect to the surplus country (Germany), countries running a trade deficit (Spain, Italy) are characterised by a productivity distribution with a lower mean and a less fat right tail. This increases the relative price movement associated with the external adjustment because of the limited role played by the extensive margin. We show that the real exchange rate movements are underestimated when the cross-country differences in terms of productivity distributions are neglected.
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