FZID discussion papers

Permanent URI for this collectionhttps://hohpublica.uni-hohenheim.de/handle/123456789/15823

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A behavioral macroeconomic model with endogenous boom-bust cycles and leverage dynamcis
(2011) Scheffknecht, Lukas; Geiger, Felix
We merge a financial market model with leverage-constrained, heterogeneous agents with a reduced-form version of the New-Keynesian standard model. Agents in both submodels are assumed to be boundedly rational. The financial market model produces endogenously arising boom-bust cycles. It is also capable to generate highly non-linear deleveraging processes, fire sales and ultimately a default scenario. Asset price booms are triggered via self-fulfilling prophecies. Asset price busts are induced by agents' choice of an increasingly fragile balance sheet structure during good times. Their vulnerability is inevitably revealed by small, randomly occurring shocks. Our transmission channel of financial market activity to the real sector embraces a recent strand of literature shedding light on the link between the active balance sheet management of financial market participants, the induced procyclical fluctuations of desired risk compensations and their final impact on the real economy. We show that a systematic central bank reaction on financial market developments dampens macroeconomic volatility considerably. Furthermore, restricting leverage in a countercyclical fashion limits the magnitude of financial cycles and hence their impact on the real economy.
A direct test of socially desirable responding in contingent valuation interviews
(2011) Börger, Tobias
A taxonomy of innovation networks
(2012) Pyka, Andreas; Schön, Benjamin
In this discussion paper we develop a theory-based typology of innovation networks with a special focus on public-private collaboration. This taxonomy is theoretically based on the concept of life cycles which is transferred to the context of innovation networks as well as on the mode of network formation which can occur either spontaneous or planned. The taxonomy distinguishes six different types of networks and incorporates two plausible alternative developments that eventually lead to a similar network structure of the two types of networks. From this, important conclusions and recommendations for network actors and policy makers are drawn.
Ageing and productivity
(2013) Bloom, David E.; Sousa-Poza, Alfonso
Anwendung des öffentlichen Vergaberechts auf moderne IT-Softwareentwicklungsverfahren
(2011) Kirn, Stefan; Müller-Hengstenberg, Claus D.
Die öffentliche Hand ist der größte Auftraggeber in Deutschland, Europa und wohl auch in anderen Ländern der Welt wie USA und England. Nach der ?International Market Scoreboard-Statistik July 2009? betrug das Gesamtvolum aller EU-weit ausgeschriebenen öffentlichen Aufträge 2 Billionen Euro. Damit besitzt die öffentliche Hand eine beträchtliche Marktmacht, die geeignet ist, massiven Einfluss auf die Wettbewerbsverhältnisse auf den Märkten zu nehmen. Angesichts dieser Gefahr für den Wettbewerb hat das öffentliche Vergaberecht (§§ 100 f GWB, VOB/A,VOL/A usw.) die Aufgabe, diese Marktmacht der öffentlichen Auftraggeber in Grenzen zu halten und den Wettbewerb auf den Beschaffungsmärkten zu schützen. Absolute Priorität der Vergabeordnungen (§ 101 GWB) hat daher die öffentlichen Vergabe im Wettbewerb. Besondere Vergabeprobleme zeigen sich immer wieder bei der öffentlichen Vergabe von IT Anwendungsentwicklungen. Hierbei werden aus betriebswirtschaftlichen Gründen zunehmend Technologiekonzepte (iterative Verfahren) verwandt, bei denen die wirtschaftlichen und technischen Ziele erst in Form eines iterativen Prozesses zwischen Anbieter und Kunde erarbeitet und realisiert werden. Der nachfolgende Beitrag gibt einen Überblick über die öffentlichen Vergabearten und behandelt die Frage, ob und in welcher Weise Software-Entwicklungsprozesse mit den Vergabearten der öffentlichen Hand in Einklang stehen oder gebracht werden können.
Assessing uncertainty in Europe and the US : is there a common factor?
(2012) Sauter, Oliver
This paper aims an empirical investigation of uncertainty in the Euro Zone as well as the US. For this purpose I conduct a factor analysis of uncertainty measures starting in 2001 until the end of 2011. I use survey-based data provided by the ECB and the Federal Reserve Bank of Philadelphia as well as the stock market indices VSTOXX and VIX, both measures of implied volatility of stock market movements. Each measure shows an increase in uncertainty during the last years marked by the financial turmoil. Given the rise in uncertainty, the question arises whether this uncertainty is driven by the same underlying factors. For the Euro Zone, I show that uncertainty can be separated into factors of short and long-term uncertainty. In the US there is a sharp distinction between uncertainty that drives stock market and ?real? variables on the one hand and inflation (short and long-term) on the other hand. Combining both data sets, factor analysis delivers (1) an international stock market factor, (2) a common European uncertainty factor and (3) an US-inflation uncertainty factor.
Asymmetric obligations
(2011) Schildberg-Hörisch, Hannah; Riedel, Nadine
We use a laboratory experiment to investigate the behavioral effects of obligations that are not backed by binding deterrent incentives. To implement such expressive law' we introduce different levels of very weakly incentivized, symmetric and asymmetric minimum contribution levels (obligations) in a repeated public goods experiment. The results provide evidence for a weak expressive function of law: while the initial impact of high obligations on behavior is strong, it decreases over time. Asymmetric obligations are as effective as symmetric ones. Our results are compatible with the argument that expressive law affects behavior by attaching an emotional cost of disobeying the own obligation.
Avoiding evolutionary inefficiencies in innovation networks
(2011) Pyka, Andreas
Innovation policy is in need for a rational which allows the design and evaluation of policy instruments. In economic policy traditionally the focus is on market failures and efficiency measures are used to decide whether policy should intervene and which instrument should be applied. In innovation policy this rational cannot meaningfully be applied because of the uncertain and open character of innovation processes. Uncertainty is not a market failure and cannot be repaired. Inevitably policy makers are subject to failure and their goals are to be considered as much more modest compared to the achievement of a social optimum. Instead of optimal innovation, the avoidance of evolutionary inefficiencies becomes the centrepiece of innovation policy making. Superimposed to the several sources of evolutionary inefficiencies are socalled network inefficiencies. Because of the widespread organisation of innovation in innovation networks, the network structures and dynamics give useful hints for innovation policy, where and when to intervene.
Business taxes and the electoral cycle
(2012) Riedel, Nadine; Foremny, Dirk
The purpose of this paper is to assess whether politicians manipulate the timing of tax rate changes in a strategic way to maximize reelection prospects. To do so, we exploit the German local business tax as a testing ground which is set autonomously by German municipalities. As election dates vary across local councils, the data allows us to disentangle effects related to the timing of elections from common trends. Using a rich panel data-set for German municipalities, we assess the impact of elections on local business tax choices. The findings support the notion of a political cycle in tax setting behavior as the growth rate of the local business tax is significantly reduced in the election year and the year prior to the election, while it jumps up in the year after the election. This pattern turns out to be robust against a number of sensitivity checks.
Capability-based governance patterns over the product life-cycle
(2013) Kok, A. G. de; La Poutré, J. A.; Pyka, Andreas; Vermeulen, B.
We investigate patterns of vertical governance over the product life-cycle as function of the capability regime properties imitability and substitutability. We use a novel neo-Schumpeterian model to study emerging governance patterns. We find that, in the era of incremental change, firms prefer vertical specialization. In the era of ferment, no governance form dominates. Imitability and substitutability, in interplay, determine the governance form preferred. High imitability frustrates appropriation and thereby integration for synergistic advantages. However, firms need not vertically specialize: under low substitutability, incompatibilities reduce the advantages of specialization. When both substitutability and imitability are low, firms can appropriate the value of their inventions and there is no combinatorial advantage of specialization, so firms predominantly integrate. If substitutability is high and imitability is low, the combinatorial advantage of specialization balances with the synergistic advantage of integration.
Capital income shares and income inequality in the European Union
(2013) Schmid, Kai Daniel; Schlenker, Eva
In this paper, we measure the effect of changing capital income shares upon inequality of gross household income. Using EU-SILC data covering 17 EU countries from 2005 to 2011 we find that capital income shares are positively associated with the concentration of gross household income. Moreover, we show that the transmission of a shift in capital income shares into the personal distribution of income depends on the concentration of capital income in an economy. Using fixed effect models we find that changing capital income shares play an important role in the development of household income inequality. Hence, in many industrialized countries income inequality has by no means evolved independently from the observed structural shift in factor income towards a higher capital income share over the last decades.
Catching-up and falling behind knowledge spillover from American to German machine tool makers
(2009) Richter, Ralf; Streb, Jochen
In our days, German machine tool makers accuse their Chinese competitors of violating patent rights and illegally imitating German technology. A century ago, however, German machine tool makers used exactly the same methods to imitate American technology. To understand the dynamics of this catching-up process we use patent statistics to analyze firms? activities between 1877 and 1932. We show that German machine tool makers successfully deployed imitating and counterfeiting activities in the late 19th century and the 1920s to catchup to their American competitors. The German administration supported this strategy by stipulating a patent law that discriminated against foreign patent holders and probably also by delaying the granting of patents to foreign applicants. Parallel to the growing international competitiveness of German firms, however, the willingness to guarantee intellectual property rights of foreigners was also increasing because German firms had now to fear retaliatory measures in their own export markets when violating foreign property rights within Germany.
Causes of persistent productivity differences in the West German states in the period from 1950 to 1990
(2011) Waidlein, Nicole
Since the Second World War the West German states show persistent differences in their standard of living. The explanation of the incomplete catching-up process within West Germany is of crucial interest. After identifying productivity as the major growth driving force, this paper investigates the main causes of productivity growth on the state level between 1950 and 1990. With the help of growth theories different determinants of productivity growth are identified. These are innovations, secondary and tertiary human capital, structural change, openness and institutions. Finally, the empirical analysis reveals that three of those determinants are able to explain the persistent differences in the regional productivity levels: innovations, tertiary human capital and structural change.
Chinese urbanites and the preservation of rare species in remote parts of the country : the example of Eaglewood
(2014) Pelz, Sonna; Langenberger, Gerhard; Frör, Oliver; Ahlheim, Michael
Based on a Contingent Valuation study in Shanghai we assess peoples willingness to contribute personally to the alleviation of environmental problems occurring in distant parts of the country. One split of our survey assessed Shanghai residents willingness to pay for the preservation of rainforest in Yunnan, while the other split referred to the willingness to pay for the preservation of a single plant species (i.e. eaglewood) growing in this rainforest. The objectives of this study were twofold. Firstly, we wanted to find out if people living in big Chinese cities like Shanghai take an interest in the environmental problems existing in some remote parts of the country and if they are willing to contribute personally to remedy these problems. Secondly, we wanted to learn more about the motivation behind this kind of empathy, if it exists. We were especially interested in the question if this empathy refers to the specific environmental problems we addressed in our surveys or if it is motivated more by a general feeling of obligation towards environmental issues.
Considering household size in contingent valuation studies
(2013) Schneider, Friedrich; Ahlheim, Michael
In many empirical Contingent Valuation studies one finds that household size, i. e. the number auf household members, is negatively correlated with stated household willingness to pay for the realization of environmental projects. This observation is rather puzzling because in larger households more people can benefit from an environmental improvement than in small households. Therefore, the overall benefit should be greater for larger households. A plausible explanation could be that household budgets are tighter for large families than for smaller families with the same overall family income. The fact that larger families can afford only smaller willingness to pay statements in Contingent Valuation surveys than smaller families with the same income and the same preferences might have consequences for the allocation of public funds whenever the realization of an environmental project is made dependent on the outcome of a Contingent Valuation study. In this paper we show how the use of household equivalence scales for the assessment of environmental projects with the Contingent Valuation Method can serve to reduce the discrimination of members of large families.
Contract design and insurance fraud : an experimental investigation
(2010) Schiller, Jörg; Lammers, Frauke
This paper investigates the impact of insurance contract design on the behavior of filing fraudulent claims in an experimental setup. We test how fraud behavior varies for insurance contracts with full coverage, a straight deductible or variable premiums (bonus-malus contract). In our experiment, filing fraudulent claims is a dominant strategy for selfish participants, with no psychological costs of committing fraud. While some people always commit fraud, a substantial share of people only occasionally or never defraud. In addition, we find that deductible contracts may be perceived as unfair and thus increase the extent of claim build-up compared to full coverage contracts. In contrast, bonus-malus contracts with variable insurance premiums significantly reduce the filing of fictitious claims compared to both full coverage and deductible contracts. This reduction cannot be explained by monetary incentives. Our results indicate that contract design significantly affects psychological costs and, consequently, the extent of fraudulent behavior of policyholders.
Corporate taxation and the quality of research and development
(2013) Riedel, Nadine; Richter, Katharina; Ernst, Christof
This paper examines the impact of tax incentives on corporate research and development (R&D) activity. Traditionally, R&D tax incentives have been provided in the form of special tax allowances and tax credits. In recent years, several countries moreover reduced their income tax rates on R&D output. Previous papers have shown that all three tax instruments are effective in raising the quantity of R&D related activity. We provide evidence that, beyond this quantity effect, corporate taxation also distorts the quality of R&D projects, i.e. their innovativeness and revenue potential. Using rich data on corporate patent applications to the European patent office, we find that a low tax rate on patent income is instrumental in attracting innovative projects with a high earnings potential and innovation level. The effect is statistically significant and economically relevant and prevails in a number of sensitivity checks. R&D tax credits and tax allowances are in turn not found to exert a statistically significant impact on project quality.
Cyclicality of real wages in the USA and Germany : new insights from wavelet Analysis
(2012) Gómez, Víctor ; Marczak, Martyna
This article provides new insights into the cyclical behavior of consumer and producer real wages in the USA and Germany. We apply two methods for the estimation of the cyclical components from the data: the approach based on the structural time series models and the ARIMA?model?based approach combined with the canonical decomposition and a band?pass filter. We examine the extracted cycles drawing on two wavelet concepts: wavelet coherence and wavelet phase angle. In contrast to the analysis in the time or frequency domains, wavelet analysis allows for the identification of possible changes in cyclical patterns over time. From the findings of our study, we can infer that the USA and Germany differ with respect to the lead?lag relationship of real wages and the business cycle. In the USA, both real wages are leading the business cycle in the entire time interval. The German consumer real wage is, on the other hand, lagging the business cycle. For the German producer real wage, the lead?lag pattern changes over time. We also find that real wages in the USA as well in Germany are procyclical or acyclical until 1980 and countercyclical thereafter.
Distal embedding as a technology innovation network formation strategy
(2012) Pyka, Andreas; Paredes-Frigolett, Harold
Although the area of innovation economics dates back to the early twentieth century with the seminal contributions of Schumpeter (1911), it is only recently that governments have understood the role of a comprehensive approach towards public sector economics that puts innovation systems in the eye of public policy decision makers. Although well researched in academia in recent years, the role that innovation networks play in driving successful processes of innovation and entrepreneurship has been less understood by policy makers. Indeed, so far public policy makers have been concerned with the macro level of public policy in a way that has been rather ?disconnected? from the meso level of innovation networks. Not surprisingly, overall strategies for innovation network formation have not been on the radar screen of public policy. The academic community, on the other hand, has been devoting more attention to the study of innovation networks in an attempt to understand the role they play as a catalyst of innovation and entrepreneurship. By and large in the research community, the process of innovation network formation has been left rather unattended. Indeed, the question of how these networks are formed and what strategies can be developed to ignite processes of innovation network formation has been largely absent from the academic debate. In this article, we make a contribution in this area and present ?distal embedding" as one of three generic innovation network formation strategies. We also show why ?distal embedding'' is particularly well suited for emerging regions of innovation and entrepreneurship. Our contributions lie at the macro-meso interface and can shed light on public policy at the macro level aiming to have a direct impact at the meso level of innovation network formation.
Does downward nominal wage rigidity dampen wage increases?
(2010) Beißinger, Thomas; Stüber, Heiko
Focusing on the compression of wage cuts, many empirical studies find a high degree of downward nominal wage rigidity (DNWR). However, the resulting macroeconomic effects seem to be surprisingly weak. This contradiction can be explained within an intertemporal framework in which DNWR not only prevents nominal wage cuts but also induces firms to compress wage increases. We analyze whether a compression of wage increases occurs when DNWR is binding by applying Unconditional Quantile Regression and Seemingly Unrelated Regression to a data set comprising more than 169 million wage changes. We find evidence for a compression of wage increases and only very small effects of DNWR on average real wage growth. The results indicate that DNWR does not provide a strong argument against low inflation targets.

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