Institut für Volkswirtschaftslehre

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A data-driven procedure to determine the bunching window : an application to the Netherlands
(2016) Bosch, Nicole; Dekker, Vincent; Strohmaier, Kristina
This paper presents new empirical evidence on taxpayers responsiveness to taxation by estimating the compensated elasticity of taxable income with respect to the net-of-tax rate in the Netherlands. Applying the bunching approach introduced by Saez (2010), we find small, but clear evidence of bunching behaviour at the thresholds of the Dutch tax schedule with a precise estimated elasticity of 0.023 at the upper threshold. In line with the literature, we find much larger estimates for women and self-employed individuals, but we can also identify significant bunching behaviour for wage employed individuals which we can attribute to tax deductions for couples. We add to the bunching literature by proposing to rely on the information criteria to determine the counterfactual model, as well as developing an intuitive, data-driven procedure to determine the bunching window.
A direct test of socially desirable responding in contingent valuation interviews
(2011) Börger, Tobias
A monetary-fiscal theory of prices in modern DSGE models
(2018) Schröder, Christian Philipp; Spahn, Peter
Starting with the Eurozone crisis in 2010, fiscal variables such as the government budget position and public debt of certain member countries as well as the design of the European Monetary Union as a whole came under close scrutiny again. Furthermore, as a consequence of the global financial crisis, the economic profession faced accusations that, using the established ‘workhorse models,’ it was not able to provide answers to the pertinent questions of the time. From the perspective of economic theory, two main issues can be outlined against this background: (1) How do the so-called DSGE (dynamic stochastic general-equilibrium) models work which form a quasi-consensus in practice, research, and teaching nowadays? This relates especially to determinacy, that is, the mathematical property of being able to draw unique conclusions from a given set of assumptions. (2) What roles do the main fields of macroeconomic policy---fiscal and monetary policy---play in this? The exposition of these items is carried out within a formally consistent theoretical model which adheres to common standards and strikes a balance between staying general enough for a broad range of approaches and being sufficiently specific to yield tangible results. Following a brief introduction, Chapter 2 presents a microfounded (‘baseline’) general-equilibrium model that acts as a foundation for subsequent analysis. The only substantial exception is the excursus in Chapter 3. It deals with interactions between the entities of the consolidated government sector, namely the treasury and the central bank, and in doing so also touches on traditional models which cannot be reconciled entirely with modern theory. One of the main aspects is the “unpleasant monetarist arithmetic” that describes the long-standing explanation for fiscally induced inflation. The fourth chapter then takes up the baseline model and ‘closes’ it by defining monetary as well as fiscal policy, both of which can be active (that is, dominant) or passive. Resulting from this classification are two stable macroeconomic regimes (monetary or fiscal dominance) plus two undesirable outcomes (explosive instability or indeterminacy of central model variables). Monetary dominance is tantamount to the prevailing world view—central banks can independently pursue a measure of price stability while governments have to follow a sustainable (Ricardian) fiscal policy—whereas fiscal dominance gives rise to a “fiscal theory of the price level” in which the treasury sets budget surpluses without regard for other variables and monetary policy can be an implicit accomplice at most. This latter regime ultimately puts price stability into the hands of the treasury. Initially, the only public liability is debt (there is no money at this stage); however, the is model is able to determine unique price levels in the stable regimes. Chapter 5 introduces several isolated complications to the model described so far. One is the role of money, especially in the fiscalist model variant; it shows that the main results remain unchanged if monetary policy is conducted via money-supply instead of interest-rate policy. Further considerations are the zero lower bound on interest rates (in a graphic analysis) as well as limits to public-sector liabilities. Subsequently, Chapter 6 applies the baseline model of Chapter 2 to the open economy—more precisely, a monetary union consisting of two countries. Since monetary policy is supranational here, outcomes crucially depend on national fiscal policies. While the baseline model assumes flexible prices, Chapter 7 adds the considerable complication of nominally rigid prices. A mostly ‘plain-vanilla’ New-Keynesian model emerges which, following common practice, is then linearized and simulated in Matlab/Dynare. At the core of the analysis lie the two stable regimes carved out in Chapter 4. The central implications of the monetary-fiscal theory derived so far are adjusted gradually, but remain in place generally. Towards the end, the thesis highlights empirical issues (verifiability of the regimes, historical case studies). Finally, the results obtained beforehand culminate in a comprehensive discussion of the monetary-fiscal theory, including a distinction from traditional approaches. Chapter 10 concludes.
A neo-Schumpeterian perspective on the analytical macroeconomic framework : the expanded reproduction system
(2015) Jun, Bogang; Kim, Tai-Yoo
This study aims to introduce a new analytical macroeconomic framework, the expanded reproduction system, that combines the accumulated wisdom of several contemporary economic models while also compensating for their shortcomings. This new framework may be used to study macroeconomic phenomena from both the supply and demand side over a number of different time intervals. Furthermore, as we account for both new product and productivity innovations, we are able to account for both qualitative and quantitative developments within the economy.
A review of spatial econometric models for count data
(2017) Glaser, Stephanie
Despite the increasing availability of spatial count data in research areas like technology spillovers, patenting activities, insurance payments, and crime forecasting, specialized models for analysing such data have received little attention in econometric literature so far. The few existing approaches can be broadly classified into observation-driven models, where the random spatial effects enter the moments of the dependent variable directly, and parameterdriven models, where the random spatial effects are unobservable and induced via a latent process. Moreover, within these groups the modelling approaches (and therefore the interpretation) of spatial effects are quite heterogeneous, stemming in part from the nonlinear structure of count data models. The purpose of this survey is to compare and contrast the various approaches for econometric modelling of spatial counts discussed in the literature.
Ambidextrie in Netzwerken komplexer Produkte : Exploration und Exploitation in der Luftfahrtindustrie
(2016) Guffarth, Daniel; Pyka, Andreas
Since over 100 years, no comparable product exists that is so strongly related with engineering skills, pioneering spirit and the complex combination of materials, technique and knowledge, while being a prototypical example for high development and production cost at the same time. During the last century, industry changed dramatically through evolutionary and revolutionary technical and structural changes with government intervention playing a key role for industrial evolution. Today’s aircraft industry is in a growth phase which is determined by ramping up production scales which leads, in combination with the potentially new competitors from Asia and uprising regional aircraft manufacturers, to a situation in which the duopolists Airbus and Boeing are forced to shape their supply chains more efficient and effective. At the same time continuous technological novelties in subsystems and the high R&D-intensity are further recent challenges. With this dissertation a new industry evolution framework is developed which is coping with the complex products industries requirements by considering demand, state intervention and technological mechanisms. In complex product systems different subsystems of the artefact aircraft are in different stages of the technological life cycle at the same time. This is the reason why the classical implications between technology, product, and industry life cycle stages do not hold for complex products industries. I.e. solely focusing on the manufacturer level of an industry is not sufficient. Therefore in this dissertation, industry is defined as network. The design of this network as exploration or exploitation network focusing on product or process and/or both depends on time and manner. As permanently changing requirements are characteristic for complex products, organizations have to be able to be ambidextrous, i.e. to balance exploration and exploitation which is a decisive success factor in organizational long term survival. This requirement is analyzed on three levels within the R&D network of the European aircraft industry: knowledge development, structural and network topology, as well as on regional development. Key findings are the extension of ambidexterity in the network as well as in the supply chain over time. Therefore a change from cyclical to permanent ambidexterity is directed towards the suppliers. Additionally exploration is crowded out from the core of the network as routines and fossilized structure are established over time by repeatedly cooperating with other core actors. Therefore core actors use network peripheries as a vehicle to realize explorative projects and being permanently ambidextrous. As a consequence success factors for the sustainability of the European aircraft industry are the orchestration of network stability and network heterogeneity as well as the maintenance of the SME structure and interindustry linkages for usage of explorative learning.
An equilibrium model of 'global imbalances' revisited
(2011) Körner, Finn Marten
?Global imbalances? are almost universally regarded as a disequilibrium phenomenon. Caballero, Farhi, and Gourinchas (2008) challenge this notion with their dynamic general equilibrium model of global imbalances. The authors conclude that current account deficit nations need not worry about long-lasting deficits as long as the model is in equilibrium. The joint model in this paper combines the two model extensions for exchange rates and FDI which are disjunct in the original model. An analytical solution to the new joint model is neither as straightforward as for the separate models nor can previous results from calibrated simulation be confirmed without restriction. The model is highly dependent on parameter assumptions: A variation of calibrated parameters highlights the prime impact of investment costs previously assumed away. Sustainable equilibrium paths for global imbalances are much narrower in updated simulations than previously predicted. Policy recommendations on the sustainability of international debt holdings therefore need to be a lot more cautious.
Applied policy research through the lens of new quantitative trade models
(2021) Walter, Timo; Jung, Benjamin
This cumulative dissertation consists of four essays focusing on the applied policy research in international trade. I conduct policy research on current and relevant trade subjects using state-of-the-art quantitative trade models. In the first two essays I analyze the impact of potential trade policies before they are implemented (ex-ante), while in the two later essays I examine policy issues and their effects after they were implemented (ex-post). The first essay is dedicated to the exploration of the trade and welfare effects of a potential free trade agreement (FTA) between the United States and Japan. Examining the effects of this bilateral FTA is of economic relevance as Japan is the largest trading partner for the United States without an established FTA. Based on the new quantitative trade model of Caliendo and Parro (2015) I consider various trade policy scenarios of such a potential FTA. In my counterfactual analysis I focus on the decrease of tariffs as well as on the reduction of different levels of non-tariff barriers. My findings indicate that the largest trade effects are driven by the reduction of non-tariff barriers. Furthermore, I compare the impact of a bilateral “Deep FTA” with the impact of the Trans-Pacific Partnership (TPP). The results show that the United States would prefer joining TPP; Japan would benefit the most of a “Deep FTA”. The second essay of my dissertation project concentrates on the abolition of import tariffs in the automotive sector between the EU and the United States. To study the potential policy implications of the so-called “Zero Tariff Solution”, this essay applies the Caliendo and Parro (2015) framework and the empirical approach of the first essay. Hereby, several possible trade policy scenarios are analyzed. The key result clearly shows that the highest welfare gains would be achieved by the “grand solution” where the EU and the United States reduce the automotive tariffs for all WTO countries. At the heart of the third essay lies the question about the underlying reasons for the steady decline of unemployment in Germany since the peak in 2005. In particular, I dissect the employment effect of the “rise of the East” (rise in trade between Germany and Eastern Europe) and that of the fourth stage of the German labor market reform (“Hartz IV"). By extending the Caliendo et al. (2019) dynamic trade model I can show that the “Hartz IV" reform decreases the short-term unemployment by 0.4 percent. I examine the productivity growth of Germany and Eastern Europe as potential drivers for the increased trade. I discover that the German productivity growth leads to a decrease in short-term unemployment, whereas the productivity growth in Eastern Europe enhances the German short-term unemployment slightly. Thus, the overall effect of the “rise of the East” driven by the productivity growth of Germany and Eastern Europe contributed to a slight decrease in German short-term unemployment. The fourth essay investigates social welfare in Germany while taking income inequality into account. The essay consists of two parts: In the first part (closed economy setting) we study the welfare effects of the German “Tax-Reform 2000”, the largest tax reform of the last decades. In the second part (open economy setting) we concentrate on the social welfare effects of the trade liberalization in Germany between 1995 and 2014. We apply the Antràs et al. (2017) approach which considers income inequality when focusing on social welfare. The results demonstrate that the “Tax-Reform 2000” contribute to a minor average annual social welfare growth. However, this additional social welfare growth strongly varies with the social planer’s inequality aversion. Additionally, we identify the optimal tax-progressivity for each year of the period. Furthermore, when studying the trade liberalization, we find support that a counterfactual move of the German economy of the year 2014 to the trade openness of 1995 would severely reduce the social welfare.
Die Arbeitsmarktsituation formal Geringqualifizierter in Deutschland : Folgen, Ursachen und Politikimplikationen einer veränderten Nachfrage nach einfacher Arbeit
(2015) Rukwid, Ralf; Hagemann, Harald
This dissertation provides an elaborate discussion of the labour market situation of low-skilled workers in Germany. It starts with a precise description of the employment and wage effects for unskilled labour in the context of a skill-specific structural change and the tendency towards a knowledge-based economy. The analysis focuses on the current job and income opportunities of low-skilled workers as well as the historical developments. This is followed by an overview of the theoretical determinants of the specific labour market problems of unskilled workers and the main explanations for a long-term demand shift away from low-skilled labour (trade vs. technology). Finally, different political approaches for an improvement of the job prospects of less-qualified persons in Germany are presented and evaluated. The focus here is on one hand on various strategies for enhancing flexibility of the German wage structure and on the other hand on a further expansion and improvement of the system of education and vocational training.
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.
Automation and demographic change
(2017) Abeliansky, Ana; Prettner, Klaus
We analyze the effects of declining population growth on the adoption of automation technology. A standard theoretical framework of the accumulation of traditional physical capital and of automation capital predicts that countries with a lower population growth rate are the ones that innovate and/or adopt new automation technologies faster. We test the theoretical prediction by means of panel data for 60 countries over the time span from 1993 to 2013. Regression estimates provide empirical support for the theoretical prediction and suggest that a 1% increase in population growth is associated with approximately a 2% reduction in the growth rate of robot density. Our results are robust to the inclusion of standard control variables, the use of different estimation methods, the consideration of a dynamic framework with the lagged dependent variable as regressor, and changing the measurement of the stock of robots.
Automation, robots and wage inequality in Germany : a decomposition analysis
(2020) Schmid, Ramona; Brall, Franziska
We analyze how and through which channels wage inequality is affected by the rise in automation and robotization in the manufacturing sector in Germany from 1996 to 2017. Combining rich linked employer-employee data accounting for a variety of different individual, firm and industry characteristics with data on industrial robots and automation probabilities of occupations, we are able to disentangle different potential causes behind changes in wage inequality in Germany. We apply the recentered influence function (RIF) regression based Oaxaca-Blinder (OB) decomposition on several inequality indices and find evidence that besides personal characteristics like age and education the rise in automation and robotization contributes significantly to wage inequality in Germany. Structural shifts in the workforce composition towards occupations with lower or medium automation threat lead to higher wage inequality, which is observable over the whole considered time period. The effect of automation on the wage structure results in higher inequality in the 1990s and 2000s, while it has a significant decreasing inequality effect for the upper part of the wage distribution in the more recent time period.
Automatisierung, Wachstum und Ungleichheit
(2018) Schwarzer, Johannes; Prettner, Klaus; Geiger, Niels
Die Automatisierung stellt eines der wichtigsten Phänomene dar, welche aktuell innerhalb der Wirtschaftswissenschaften und der breiteren Öffentlichkeit diskutiert werden. Dabei finden sich in Bezug auf die Frage, wie sich die Automatisierung gesamtwirtschaftlich auswirkt, sehr unterschiedliche Positionen: Am einen Ende wird auf die negativen Beschäftigungseffekte verwiesen, wenn Menschen mehr und mehr durch Maschinen ersetzt werden und ihre am Markt angebotene Arbeitsleistung nicht mehr nachgefragt somit obsolet wird. Gleichzeitig wird die Automatisierung auch für einen Anstieg der wirtschaftlichen Ungleichheit verantwortlich gemacht. Optimistischere Stimmen verweisen andererseits auf die Entwicklung seit der Industriellen Revolution, die durch fortlaufende technologische Veränderungen mit hohem Produktivitätswachstum und damit starken Wohlfahrtssteigerungen einherging, ohne dass es langfristig zu Massenarbeitslosigkeit gekommen ist. Der vorliegende Aufsatz diskutiert einige allgemein relevante empirische Daten und skizziert ein einfaches theoretisches Wachstumsmodell zur Analyse der Automatisierung. Die hierbei festgehaltenen Ergebnisse werden unter Bezugnahme auf die aktuelle wirtschaftswissenschaftliche Literatur zu den bisherigen und für die Zukunft zu erwartenden ökonomischen Effekten der Automatisierung vertieft und erweitert. Aus den verschiedenen Ansatzpunkten und Überlegungen werden schließlich wirtschaftspolitische Handlungsmöglichkeiten abgeleitet, wobei auch jeweils diskutiert wird, welchen Einschränkungen diese Maßnahmen unterliegen.
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.
Bidirectional relationship between investor sentiment and excessreturns : new evidence from the wavelet perspective
(2015) Marczak, Martyna; Beißinger, Thomas
This paper sheds new light on the mutual relationship between investor sentiment and excess returns corresponding to the bubble component of stock prices. We propose to use the wavelet concept of the phase angle to determine the lead–lag relation between these variables. The wavelet phase angle allows for decoupling short– and long–run relations and is additionally capable of identifying time–varying comovement patterns. By applying this concept to excess returns of the monthly S&P500 index and two alternative monthly US sentiment indicators we find that in the short run (until 3 months) sentiment is leading returns whereas for periods above 3 months the opposite can be observed.
Bioeconomy innovation networks in urban regions: The case of Stuttgart
(2023) Stöber, Lea F.; Boesino, Marius; Pyka, Andreas; Schuenemann, Franziska
For a successful transformation towards a sustainable bioeconomy, cooperative knowledge creation leading to innovations through research at the company and academic level are important. Urban regions are the centre of economic and research activities. The example of the region of Stuttgart, which aims to complement its mature industrial structure with new opportunities related to the knowledge-based bioeconomy, is an interesting case for the application of social network analysis to shed light on the dynamics of innovation networks to support the transformation of urban regions. As with smaller spatial levels of observation connectivity in network decreases, we find a scale-free network structure for the supra-regional network and a star-like network structure for the regional network, with two universities and one transfer-oriented research institutes at the core. While research collaborations beyond regional borders and across different industries foster knowledge co-creation, the central actors can be recognized as gatekeepers who dominantly influence knowledge flows. To potentially strengthen the resilience of the network, policy and industry associations serving as network facilitators can foster collaboration between periphery actors. The case of the Stuttgart region impressively illustrates the opportunities of the knowledge-based bioeconomy for urban regions and the complementary role traditional manufacturing sectors can take in the transformation towards higher degrees of sustainability.
Business cycles and institutions : empirical analysis
(2017) Kufenko, Vadim; Hagemann, Harald
The cumulative dissertation covers diverse aspects of empirical analysis of business cycles and institutions. There are three research questions in focus. To address the interplay between business cycles and institutions, the first research question is formulated: could the Malthusian cycles be present in a frontier economy with abundance of land and which institutions could be responsible for the Malthusian regime and the transition from it? In order to consider the far-reaching implications of economic cycles for the development of economic thought, the second question is stated: can economic fluctuations quantitatively influence research output? To address the methodology of business cycle analysis, the third question is brought up: how may spurious periodicities emerge and how could one test for them? The main findings in the cumulative dissertation can be summarized as follows: i) it is shown that institutional arrangements may form economic constraints or build-up on the existing ones, responsible for the regimes in which cyclical fluctuations take place; ii) the interaction between the economic cycles and fluctuations in bibliometric variables representing research output in Economics as a science is analysed, and empirical evidence suggests the downswings of cycles stimulate more publications on the topic of crises and business cycles; iii) spurious periodicities emerge close to filtering bounds for real and simulated data after detrending, and it is demonstrated that simultaneous significance testing of spectral density peaks against the noise spectrum across different types of signals may help to reveal spurious periodicities.
Business cycles in the economy and in economics : an econometric analysis
(2015) Geiger, Niels; Kufenko, Vadim
It is sometimes pointed out that economic research is prone to move in cycles and react to particular events such as crises and recessions. The present paper analyses this issue through a quantitative analysis by answering two closely related research questions: (1) whether or not there are patterns in the economic literature on business cycles, and (2) whether or not these are correlated with movements in actual economic activity. To tackle these questions, a bibliometric analysis of key terms related to business cycle and crises theory is performed. In a second step, these results are confronted with data on actual economic developments in order to investigate the question of whether or not the theoretical literature follows trends and developments in economic data. Respective time series are detrended by the Kalman filter in order to estimate cycles. To determine the connection between economic activity and developments in the academic literature, a descriptive analysis is scrutinized by Granger causality tests. The paper also includes IRF analysis for quantitative assessment of the effects from economic to bibliometric variables. The results point towards a confirmation of the hypothesis of an effect of business cycles and crises in economic variables on discussions in the literature.
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.
Children’s health, human capital accumulation, and R&D-based economic growth
(2017) Baldanzi, Annarita; Bucci, Alberto; Prettner, Klaus
We analyze the effects of childrens health on human capital accumulation and on long-run economic growth. For this purpose we design an R&D-based growth model in which the stock of human capital of the next generation is determined by parental education and health investments. We show that i) there is a complementarity between education and health: if parents want to have better educated children, they also raise health investments and vice versa; ii) parental health investments exert an unambiguously positive effect on long-run economic growth, iii) faster population growth reduces long-run economic growth. These results are consistent with the empirical evidence for modern economies in the twentieth century.

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