Institut für Volkswirtschaftslehre

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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.
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.
Demographic change and regional convergence in Canada
(2016) Prettner, Klaus; Kufenko, Vadim; Geloso, Vincent
We examine the role of demographic change for regional convergence in living standards in Canada. Due to economies of scale within a family, decreasing household size has an impact on convergence in living standards, while per capita income convergence remains unaffected. We find that, by relying on per capita income, the dispersion of living standards between Canadian regions is overestimated prior to the 1990s and underestimated thereafter. As a consequence, relying on income per capita results in overestimating the speed of convergence in living standards.
Economic growth in the post-socialist Russian Federation after 1991 : the role of institutions
(2011) Hagemann, Harald; Dobler, Constanze
The paper emphasizes the transition in Russia and the role institutions played before and during the process. In Russia, a ?big bang? approach was applied. That is to say, transition was conducted all of a sudden, omitting important underlying reforms. This practice should function as a shock therapy. Hence, the approach should leave no other chance than an abrupt adaption to the new free-market rules. These rules would then lead to fast economic growth and development, as they did in other places. However, since Russian GDP per capita and thereby living standards deteriorated dramatically in the years after the collapse of the Soviet Union, the plan did not work. At any rate, since then Russian economic indicators recovered and partly achieved their pre-1991 levels at the end of the last decade. The paper depicts Russia?s reform efforts and the subsequent developments. The close ties among the political elite, the banking sector and the old nomenklatura are demonstrated. The patrimonial system that persisted for centuries is still observable at the state level. At any rate, Russia can neither evade its historical and institutional development path nor its societal structures that are based on networks and nepotism. Russia?s systemic lack of the rule of law and therewith of secure property, the character of the Russian political system with the patriarch as the head of state and the resulting necessity of corruption and bribes inhibit the realization of its full growth potential.
Empirical analysis of regional economic performance in Russia : human capital perspective
(2012) Kufenko, Vadim
Having shown the important role of the Russian economy in the ex-USSR region by causality tests, we proceed to empirical analysis of growth and performance of the Russian regions. A dynamic panel data approach enabled us to obtain elasticity coefficients on proxies for convergence, physical capital, labour and innovation. After including human capital in the reformulated model we resolve endogeneity and reverse causality by introducing two instrumental variable approaches. Taking advantage of the Unified State Exam data we managed to successfully endogenize human capital by number (and share) of outperforming students and by the education index. The second approach helped to improve causality between instruments and human capital: the dates of first university foundation and distance to Moscow successfully explains human capital variations due to historical and spatial characteristics of a given region.
Grenzen der Bildungsexpansion? : Ausbildungsinadäquate Beschäftigung von Ausbildungs- und Hochschulabsolventen in Deutschland
(2012) Rukwid, Ralf
Der Begriff der Ausbildungsadäquanz zielt auf den Grad der Übereinstimmung zwischen den im Bildungssystem erworbenen Qualifikationen und dem Anforderungsprofil der am Arbeitsmarkt ausgeübten Tätigkeit. Im Falle einer ausbildungsinadäquaten Beschäftigung oder auch Fehlqualifikation bleibt ein bedeutender Teil der während der Ausbildungsphase angeeigneten beruflichen Fertigkeiten und Kenntnisse ungenutzt. Ausbildungsinadäquate Erwerbstätigkeit geht folglich einher mit einer suboptimalen Verwertung von Humankapital und zieht sowohl auf persönlicher als auch auf gesamtwirtschaftlicher Ebene erhebliche negative Konsequenzen nach sich. Dieser Diskussionsbeitrag? greift die Frage nach der Ausbildungs(in)adäquanz der Beschäftigung auf und untersucht diese detailiert in Hinblick auf die aktuelle Problemlage in Deutschland. Dabei werden sowohl die Erkenntnisse bisher vorhandener empirischer Studien zusammengefasst als auch eigene deskriptive Analyseresultate auf der Datengrundlage des Sozio-oekonomischen Panels (SOEP)? vorgestellt. Sowohl auf Ebene der Hochschulabsolventen als auch der Absolventen der beruflichen Ausbildungsgänge deuten die Befunde auf beträchtliche Qualifikationsreserven hin. In der langfristigen Betrachtung zeigt sich zudem, dass der Anteil ausbildungsinadäquater Beschäftigungsverhältnisse unter den akademischen Fachkräften in Deutschland seit der Wiedervereinigung deutlich zugenommen hat. Bei der ausbildungsinadäquaten bzw. unterwertigen Beschäftigung handelt es sich demnach um ein am deutschen Arbeitsmarkt verbreitetes und keinesfalls zu vernachlässigendes Phänomen, das künftig stärker in das Blickfeld von Politik und Arbeitsmarktforschung rücken sollte.
Infant mortality and the role of seigneurial tenure in Canada East, 1851
(2015) Geloso, Vincent; Arsenault Morin, Alex; Kufenko, Vadim
This paper aims to explain differences in infant mortality across the colony of Quebec, known in the 1850s as Canada East, by institutional settings. Areas settled under French laws (known as seigneurial law) implied important transfers from peasants to landlords through private taxes and duties, restrictions on mobility, scant provision of public goods and disincentives to invest in agricultural productivity. As a result, areas under this law system tended to be poor and prone to high mortality. Upon conquering Quebec, the British maintained French land laws but, in 1791, the boundaries of its application were frozen – all newly settled lands would be under British land laws. By 1851, the two legal systems had cohabited for six decades – allowing us to compare them. Using the 1851 census, we argue that French seigneurial law – which reduced living standards through a variety of channels – translated into higher rates of infant mortality. After estimating a Zero-inflated Negative Binomial Regression we find that the effect of seigneurial tenure results in an increase in infant death rates from 43.79 to 44.89 for the age group below one and from 5.21 to 5.277 for the age group from one to five. Additionally, we conduct robustness checks by limiting the sample to large settlements and changing the age groups for the dependent variable.
Instabiltiy, economic stagnation and the role of Islam in the North Caucasus
(2011) Dobler, Constanze
Since the breakup of the Soviet Union, the North Caucasus is known as a politically unstable region and as a melting pot for terrorism and all kinds of criminal activity, reaching from drugtrafficking and illegal arms trade to hijacking and extortion. Furthermore, the North Caucasus is one of Russia?s poorest and least developed regions. Although the role of Islam as a destabilizing factor should not be overestimated, it is a determining characteristic regarding the region?s past and current development. The paper considers specific influencing factors like the North Caucasus? geographical location, foreign influence, its Soviet past, its history of Islamization, its societal structure, its ethnic heterogeneity and the prevalent Russian institutional vacuum with a focus on Islam and its local characteristics. Then it is questioned whether sustainable socio-economic development is possible within the prevalent institutional environment and whether Islam plays a decisive role or not. It is discovered, that weak governance on the central and regional levels and the inability to implement and enforce the rule of law are responsible for the region?s socio-economic situation. The form of societal organization plays a role, too. These factors, however, are historically determined and will therefore persist, in part even in the long run.
Living standards in lower Canada, 1831
(2016) Geloso, Vincent; Kufenko, Vadim; Villeneuve, Remy
This paper uses the price and wage data contained in the 1831 census of Lower Canada to provide regional estimates of disparities in living standards within Quebec in 1831. Combining these data with price data for the colony as a whole, we compare living standards in Quebec with those of numerous American and Canadian cities at the same point in time. The results show that Quebec was overall poorer in comparison. However, there are wide variations within the colony—mostly along institutional lines. As a whole, Quebec was significantly poorer than the United States at the same time.
Malthusian pressures : empirical evidence from a frontier economy
(2015) Kufenko, Vadim; Geloso, Vincent
In this paper we study Malthusian pressures in a frontier economy. Using the empirical data on the real prices and demographic variables from 1688 to 1860 for Quebec and Montreal, we test for the existence of Malthusian pressures. Bearing in mind the particularities of frontier economies and the development of the Canadian economy, we conduct cointegration tests and VARs in order to identify positive and preventive checks. The cointegration test reveals absence of long-run equilibrium relationship between real wheat prices, birth and death rates. Using the Bai-Perron test we find a structural break in 1767 and divide the sample in pre- and post-conquest periods. We find that the positive checks were operating in the years prior to the conquest but that they faded during the nineteenth century. In the short-run, we find that wheat prices Granger-cause fluctuations in death rates in the pre-conquest period.
Monopsony and industrial development in nineteenth century Quebec : the impact of seigneurial tenure
(2016) Kufenko, Vadim; Arsenault Morin, Alex; Geloso, Vincent
We argue that the system of seigneurial tenure used in the province of Quebec until the mid-nineteenth centurya system which allowed significant market power in the establishment of plants, factories and mills, combined with restrictions on the mobility of the labor force within each seigneurial estateis best understood as a system of regionalized monopsonies in the non-farm sector. Seigneurs had incentives to reduce their employment in those sectors to reduce wage rates. We use the fact that later, with the Constitutional Act of 1791, all new settled lands had to be settled under a different system (British land laws). This natural experiment allows us to test our hypothesis that seigneurial tenure was a monopsony, using data from the 1831 and 1851 Lower Canada censuses. We find strong evidence that this difference in tenure partially explains the gap in industrial development between Quebec and the neighboring colony of Ontario.
Spurious periodicities in cliometric series : simultaneous testing
(2016) Kufenko, Vadim
In this paper we revisit the methodological aspects of the issue of spurious cycles: using the well-established clinometric data, we apply an empirical strategy to identify spurious periodicities and cross-validate the results. The analysis of cyclical fluctuations involves numerous challenges, including data preparation and detrending. As a result, there is a risk of statistical artifacts to arise: it is known that summation operators and filtering yield a red noise alike spectral signature, amplifying lower frequencies and thus, longer periodicity, whereas detrending using differencing yields a blue noise alike spectral signature, amplifying higher frequencies and thus, shorter periodicity. In our paper we explicitly address this issue. In order to derive the stationary signals to be tested, we perform outlier adjustment, derive cycles from the series with the asymmetric band pass Christiano-Fitzgerald filter using the upper bands of the Kuznets and the Juglar cycles as cut-offs, and obtain detrended prefiltered signals by differencing the series in the absence of fractional integration. Afterwards, we simultaneously test whether the spectral densities of filtered and detrended prefiltered signals are significantly different from the spectral density of the related noise. The periodicities from the Kuznets range were not simultaneously significant, and thus are likely to be spurious; whereas ones of the Juglar and Kitchin ranges were simultaneously significant. The simultaneous significance test helps to identify spurious periodicities and the results, in general, accord with the durations of the business cycles found in other works.
Stylized facts of the business cycle : universal phenomenon, or institutionally determined?
(2015) Kufenko, Vadim; Geiger, Niels
This paper empirically investigates and theoretically reflects on the generality of the “stylized facts” discussed in business cycle analysis. Using OECD data for 1960–2010, the duration of business cycles as well as three models capturing core macroeconomic relations are estimated: based on the Phillips curve (the inflation-unemployment nexus), Okun’s law (in the context of the relation between output growth and unemployment) and the inflation-output relation. Results are validated by relevant statistical tests. Observed durations vary from 4 to 8 years, and estimated coefficients differ in signs and magnitudes. Bearing these substantial variations in mind, an explanation of this heterogeneity is attempted by referring to proxies for various institutional variables for the goods, labour and money markets. The findings suggest that core coefficients in the relations, such as the slope of the Phillips curve, show significant correlation with some of these variables, but no uniform results are obtained. In the detailed theoretical discussion and interpretation it is thus argued that the notable differences between countries call the universality of the “stylized facts” into question, but also that these variations cannot be explained exhaustively by the institutional proxy variables employed here.
The formal-informal economy dualism in a retrospective of economic thought since the 1940s
(2015) Clement, Christine
Central to the scientific debate about the ‘informal sector’ and the validity of the concept used to be a twofold challenge. The crux laid not only in the objective to explain the widely visible persistence of the informal economy in developing countries, but also in the identification of its roots and the proliferation conditions to be met ex ante. The present paper aims at establishing a link between the theories on informality and marginalization which is another important issue that has arisen within the discussions on the causes of persistent poverty a few years ago. Both concepts are interlinked and self-enforcing. On the macroeconomic level, any economy – be it formal or informal – consists of a set of different economic sectors and any of these sectors basically consists of an accumulation of people on the microeconomic level. Every time one looks at the macro level where political and economic conditions frame the dynamics of the formal and the informal economy, one has at the same time to look at the micro-level where the social and economic conditions determine the incentives for every actor to participate either in the formal, the informal or in both economies. Informality has multiple sources depending on whether the agent took a voluntary choice or had to involuntary opt-out from an institutional system. In this paper, the connection between informality and involuntary exclusion shall be examined in a retrospective of economic thought since the 1940s. The roots of the intertwined concepts of informality and economic exclusion have been laid in the dual economy theories of the 1940s-1950s. Recapitulating the works of Julius BOEKE, Arthur LEWIS, John HARRIS & Michael TODARO, Albert HIRSCHMAN and other socio-economists of that time, it will be argued that one of the necessary reasons for the persistence of the informal economy in developing countries is the dualism in institutional frameworks that leads to the marginalization of social groups and their subsequent exclusion from formal economic activities. By referring to the groundbreaking Africa studies of Keith HART (1971) and the INTERNATIONAL LABOUR ORGANIZATION (1972), special emphasis will be given to the causal reciprocity between informality, marginalization and economic exclusion. The paper closes with a brief overview of current schools of thought that deal very differently with the issue of informality and economic exclusion.
The political Kuznets Curve for Russia : income inequality, rent seeking regional elites and empirical determinants of protests during 2011/2012
(2013) Kufenko, Vadim; Hagemann, Harald
The goal of this paper is to apply the theory of the political Kuznets curve to Russia and reveal the key determinants of the probability of recent protests during 2011-2012 in the Russian regions. We apply the political Kuznets curve in the time and spatial dimensions, and find mixed evidence: throughout time, we observe an almost linear and positive relation between income and income distribution, whereas in the spatial dimension there exists an evidence of a concave curve. Empirical investigation of the role of income inequality using the latent variable framework allows us to outmanoeuvre certain measurement issues and state that conventional measures of income inequality, such as the Gini coefficient, may not be able to predict protests. Instead, we use the relation of the governors? family income to the average family income in the region, a proxy for rent-seeking of regional elites, which turns out to be a positive, significant and robust determinant of the protests. Applying additional controls ensures the robustness of the results and highlights the fact that democracy score and the economic factors are also significant. Mapping the distribution of the protests provides information on the clustering effect.
The political Kuznets Curve for Russia : income inequality, rent seeking regional elites and empirical determinants of protests during 2011/2012
(2013) Kufenko, Vadim; Hagemann, Harald
The goal of this paper is to apply the theory of the political Kuznets curve to Russia and reveal the key determinants of the probability of recent protests during 2011-2012 in the Russian regions. We apply the political Kuznets curve in the time and spatial dimensions, and find mixed evidence: throughout time, we observe an almost linear and positive relation between income and income distribution, whereas in the spatial dimension there exists an evidence of a concave curve. Empirical investigation of the role of income inequality using the latent variable framework allows us to outmanoeuvre certain measurement issues and state that conventional measures of income inequality, such as the Gini coefficient, may not be able to predict protests. Instead, we use the relation of the governors? family income to the average family income in the region, a proxy for rent-seeking of regional elites, which turns out to be a positive, significant and robust determinant of the protests. Applying additional controls ensures the robustness of the results and highlights the fact that democracy score and the economic factors are also significant. Mapping the distribution of the protests provides information on the clustering effect.
The rise of behavioural economics : a quantitative assessment
(2015) Geiger, Niels
This paper is devoted to the question of operationalising the development of behavioural economics, focussing on trends in the academic literature. The main research goal is to provide a quantitative assessment in order to answer the question of whether or not behavioural economics has gained in relative importance in the past few years. After an introduction and a short summary of the history of behavioural economics, several studies are laid out and evaluated. The results generally confirm the story as it is usually told in the literature, and add some notable additional insights.
The role of Old Believers’ enterprises : evidence from the nineteenth century Moscow textile industry
(2014) Raskov, Danila; Kufenko, Vadim
The early accumulation of capital and the pioneering of capitalist enterprise have been undertaken in many countries by heterodox religious communities. The role of the Old Believers (further OB) in the early development of Russian industry and trade was noted by many economic historians (Blackwell, 1965; Gerschenkron, 1970; Beliajeff, 1979; Stadnikov, 2002; Kerov, 2004; Raskov, 2012); however, empirical and statistical research on the topic is still scarce. Therefore one of our goals is to analyze the role of the OB entrepreneurship in a dynamic dimension using statistical data. Taking advantage of official censuses of 1850, 1857 and, what is more important, 15 archive sources for confessional data for 1808 - 1905 and 7 industrial reports, we analyze the role of the OB firms in the Moscow textile industry for the period of 1832 - 1890. We find that the share of the OB firms in turnover and employment was over-proportionate prior to 1879, which hints at a higher propensity to entrepreneurship. The turnover per worker of the OB firms was significantly higher only in the wool sub-sector. Additionally, the OB firms tended to employ more labor. We capture the continuous process of the rise and fall of the OB entrepreneurship, especially in cotton-paper and wool weaving sub-sectors. Bearing in mind cyclical waves of repressions against the OB, we can state, that the performance of their firms was impressing. We discuss the Weber thesis and the Petty-Gerschenkron argument, and state that various factors contributed to their success: working ethics and minority status; social capital, networking and access to interest free financing; own informal institutions and reputation mechanisms; human capital and literacy.
Wachstums- und Investitionsdynamik in Deutschland
(2012) Hagemann, Harald; Erber, Georg
Wachstums- und Investitionsdynamik in Deutschland
(2014) Hagemann, Harald; Erber, Georg; Geiger, Niels; Schwarzer, Johannes; Zwiessler, Oliver
Sowohl auf theoretischer als auch auf empirischer Ebene wurde die wichtige Rolle privater und staatlicher Investitionstätigkeit für das Wirtschaftswachstum deutlich. Zu betonen ist hierbei, dass beide Investitionsarten in einer komplementären Beziehung zueinander stehen, so dass ein entsprechend ausbalancierter Mix an privaten und staatlichen Investitionen wesentlich für das Erreichen eines dynamischen Wachstumspfades ist. Die Bedeutung der privaten Investitionstätigkeit für den Konjunktur- und Wachstumsverlauf einer Volkswirtschaft wurde anhand verschiedener Modelle wie z.B. dem Multiplikator-Akzelerator-Modell diskutiert und hervorgehoben. Die besondere Rolle der staatlichen Investitionstätigkeit und deren Auswirkungen auf das Wirtschaftswachstum wurden im Rahmen der Aschauer-Hypothese vertieft dargestellt. Insgesamt ist aber auf theoretischer Ebene dennoch kritisch zu hinterfragen, auf welcher Grundlage ein bestimmter Investitionsmangel identifiziert wird und wie ein optimales Investitionsniveau bestimmt werden kann. Auf Grund dieser geradezu fundamentalen Bedeutung der Investitionen für das Wirtschaftswachstum erscheint es um so erschreckender, dass gerade in Deutschland als eine der weltweit führenden Industrienationen die Investitionstätigkeit seit Jahren auf internationaler Ebene nicht ebenso im Spitzenfeld zu finden ist. Dies ist insofern von besonderer Brisanz, da die Deutsche Wirtschaft und deren Schlüsselbranchen wie die Automobilindustrie, in einem harten internationalen Wettbewerb stehen und somit eine verhaltene Investitionstätigkeit auf privater und staatlicher Ebene langfristig entsprechend negative Konsequenzen für die Produktion und den Arbeitsmarkt erwarten lassen. Ganz allgemein lassen sich negative Beschäftigungseffekte in einer dynamischen Weltwirtschaft und angesichts eines immer voranschreitenden technologischen Wandels nie ganz vermeiden. Wie aber in dieser Studie herausgearbeitet wurde, sind gerade daher Investitionen auch in Bezug auf den Arbeitsmarkt langfristig vorteilhaft, um die Beschäftigung aufrecht zu erhalten. Besonders hervorzuheben sind hierbei Bildungsinvestitionen und die Anpassung der Arbeitsmarktinstitutionen an die neuen Herausforderungen an Flexibilität und Qualität des Arbeitskräftepotentials. Die in diesem Zwischenbericht angeschnittenen Themen und Fragestellungen werden im Endbericht noch vertieft dargestellt und ausgebaut werden. So wird z.B. die Investitionsentscheidung der privaten Unternehmen mikroökonomisch fundiert hergeleitet werden. Die bereits im Rahmen der Aschauer-Hypothese angedachten Bereiche der staatlichen Investitionstätigkeit werden eingehend betrachtet und diskutiert werden. Im Fokus werden hierbei insbesondere öffentliche Bildungs- und Infrastrukturinvestitionen stehen. Diese Analyse wird sowohl theoretisch als auch empirisch durchgeführt werden, wobei bezüglich der empirischen Untersuchung die Revision der VGR und deren Auswirkungen auf das gemeldete Wirtschaftswachstum im Blickpunkt stehen werden. Entsprechende wirtschaftspolitische Überlegungen und Fragestellungen werden die Studie abschließen. Hierbei wird insbesondere ein Augenmerk auf die Bestimmung einer optimalen Investitionstätigkeit und auf die Notwendigkeit und Möglichkeit der Investitionsförderung gelegt werden.

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