TITEL: CO2 Highways for Europe Modeling a Carbon Capture, Transport and Storage Infrastructure for Europe JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 23 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1052 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060931 IKA: DIW2010||EVU SPRACHE: Englisch REPEC_JEL: C61, H54, O33 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.360944.de/dp1052.pdf VERFASSERANGABEN: Roman Mendelevitch, Johannes Herold, Pao-Yu Oei, Andreas Tissen ALLPERS: - ABSTRACT: We present a mixed integer, multi-period, cost-minimizing carbon capture, transport and storage (CCTS) network model for Europe. The model incorporates endogenous decisions about carbon capture, pipeline and storage investments; capture, flow and injection quantities based on given costs, certificate prices, storage capacities and point source emissions. The results indicate that CCTS can theoretically contribute to the decarbonization of Europe's energy and industry sectors. This requires a CO2 certificate price rising to 55 € in 2050, and sufficient CO2 storage capacity available for both on and offshore sites. However, CCTS deployment is highest in CO2-intensive industries where emissions cannot be avoided by fuel switching or alternative production processes. In all scenarios, the importance of the industrial sector as a first mover to induce the deployment of CCTS is highlighted. By contrast, a decrease of available storage capacity or a more moderate increase in CO2 prices will significantly reduce the role of CCTS as a CO2 mitigation technology, especially in the energy sector. Continued public resistance to onshore CO2 storage can only be overcome by constructing expensive offshore storage. Under this restriction, to reach the same levels of CCTS penetration will require doubling of CO2 certificate prices. TITEL: Foreign Interventions and Abuse of Civilians during the Peruvian Civil War JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 48 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1051 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060886 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.360801.de/dp1051.pdf VERFASSERANGABEN: David Fielding, Anja Shortland ALLPERS: - ABSTRACT: The international community has a declared intention to protect innocent civilians from direct and deliberate violence in civil conflicts, but its track record of actually doing so is mixed. Using a new monthly time-series data set, we explore the factors associated with variations in the number of civilians killed or wounded by participants in the civil war in Peru during the 1980s and 1990s. We find that an increase in the level of abuse by one side is strongly associated with subsequent increases in the level of abuse by the other. Certain types of foreign intervention had a large and statistically significant impact on the level of abuse; some types of intervention raised the level of violence, but others reduced it. TITEL: The Economics of Terrorism and Counter-Terrorism A Survey (Part II) JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 62 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1050 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060867 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: K42, H56, O17 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359709.de/dp1050.pdf VERFASSERANGABEN: Friedrich Schneider, Tilman Brück, Daniel Meierrieks ALLPERS: - ABSTRACT: This survey provides an in-depth analysis of existing research on the economic analysis of terrorism and counter-terrorist measures. First the existing evidence on the causes of terrorism is analyzed, then we consider the evidence of the consequences of terrorism and we demonstrate why it is important to regarding of the issue of counter-terrorism policy. Moreover the survey presents the existing knowledge on the interrelation between the economy and the issue of security and it incorporates analysis the level of knowledge about the causal chains between security and the economy. Also it focuses on perspective and methodologies from the discipline of economics but also refers to research from related disciplines (sociology, political science). It also assembles the knowledge on the impact of terrorism on the economy as reflected in macro-economic variables and its impact on specific sectors. Furthermore it assesses how potential an actual terrorist event determine consumer and producer behaviour, public policy, as well as terrorist responses to these policies. Finally a European perspective on the terrorism security annexes is discussed and here we analyze the causes of terrorism in Europe. TITEL: The Economics of Terrorism and Counter-Terrorism A Survey (Part I) JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 52 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1049 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060866 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: K42, H56, O17 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359707.de/dp1049.pdf VERFASSERANGABEN: Friedrich Schneider, Tilman Brück, Daniel Meierrieks ALLPERS: - ABSTRACT: This survey provides an in-depth analysis of existing research on the economic analysis of terrorism and counter-terrorist measures. First the existing evidence on the causes of terrorism is analyzed, then we consider the evidence of the consequences of terrorism and we demonstrate why it is important to regarding of the issue of counter-terrorism policy. Moreover the survey presents the existing knowledge on the interrelation between the economy and the issue of security and it incorporates analysis the level of knowledge about the causal chains between security and the economy. Also it focuses on perspective and methodologies from the discipline of economics but also refers to research from related disciplines (sociology, political science). It also assembles the knowledge on the impact of terrorism on the economy as reflected in macro-economic variables and its impact on specific sectors. Furthermore it assesses how potential an actual terrorist event determine consumer and producer behaviour, public policy, as well as terrorist responses to these policies. Finally a European perspective on the terrorism security annexes is discussed and here we analyze the causes of terrorism in Europe. TITEL: Respondent Driven Sampling JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 22 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1048 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060725 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C83, C88 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359430.de/dp1048.pdf VERFASSERANGABEN: Matthias Schonlau, Elisabeth Liebau ALLPERS: - ABSTRACT: Respondent driven sampling (RDS) is a network sampling technique typically employed for hard-to-reach populations (e.g. drug users, men who have sex with men, people with HIV). Similar to snowball sampling, initial seed respondents recruit additional respondents from their network of friends. The recruiting process repeats iteratively, thereby forming long referral chains. Unlike in snowball sampling, it is crucial to obtain estimates of respondents' personal network size (i.e., number of acquaintances in the target population) and information about who recruited whom. Markov chain theory makes it possible to derive population estimates and sampling weights. We introduce a new Stata program for RDS and illustrate its use. TITEL: Age Effects and Heuristics in Decision Making JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 32 S., Anh. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1047 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060686 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C91, D03, I18 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359331.de/dp1047.pdf VERFASSERANGABEN: Tibor Besedes, Cary Deck, Sudipta Sarangi, Mikhael Shor ALLPERS: - ABSTRACT: Using controlled experiments, we examine how individuals make choices when faced with multiple options. Choice tasks are designed to mimic the selection of health insurance, prescription drug, or retirement savings plans. In our experiment, available options can be objectively ranked allowing us to examine optimal decision making. First, the probability of a person selecting the optimal option declines as the number of options increases, with the decline being more pronounced for older subjects. Second, heuristics differ by age with older subjects relying more on suboptimal decision rules. In a heuristics validation experiment, older subjects make worse decisions than younger subjects. TITEL: Household Savings Decision and Income Uncertainty JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 53 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1046 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060668 IKA: DIW2010||Staat SPRACHE: Englisch REPEC_JEL: D12, D91, E21 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359312.de/dp1046.pdf VERFASSERANGABEN: Martin Beznoska, Richard Ochmann ALLPERS: - ABSTRACT: This paper empirically investigates the effects of changes in the interest rate as well as transitory income uncertainty on households' consumption-savings decision. Applying a structural demand model to German survey data, we estimate the uncompensated interest rate elasticity for savings, in line with the literature, to around zero. Accordingly, any policy-induced variation of net returns to savings is expected to have no significant effects on the level of savings. Moreover, we find significant effects of precautionary savings on the consumption-savings decision. As a result of a doubling of transitory income uncertainty, an average household increases savings by 4:4%. These effects vary by household composition and social status. TITEL: Joint Customer Data Acquisition and Sharing among Rivals JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 37 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1045 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060554 IKA: DIW2010||IGW SPRACHE: Englisch REPEC_JEL: D43, L13, L15, O30 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359162.de/dp1045.pdf VERFASSERANGABEN: Nicola Jentzsch, Geza Sapi, Irina Suleymanova ALLPERS: - ABSTRACT: It is increasingly observable that in different industries competitors jointly acquire and share customer data. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such agreements and their welfare implications. In our model the incentives of firms for data acquisition and sharing depend on the willingness of consumers to switch brands. Firms jointly collect data on transportation cost parameters when consumers are relatively immobile between brands. However, the firms are unlikely to cooperatively acquire such data, when consumers are relatively mobile. Incentives to share information depend on the portfolio of data firms hold and consumer mobility. Data sharing arises with relatively mobile and immobile consumers - it is neutral for consumers in the former case, but reduces consumer surplus in the latter. Competition authorities ought to scrutinize such cooperation agreements on a case-by-case basis and devote special attention to consumer switching behavior. TITEL: Does Intermarriage Pay off? A Panel Data Analysis JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 38 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1044 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060582 IKA: DIW2010||Vorstand SPRACHE: Englisch REPEC_JEL: J1, J12 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359193.de/dp1044.pdf VERFASSERANGABEN: Olga Nottmeyer ALLPERS: - ABSTRACT: Taking advantage of the panel structure of the data, the impact of intermarriage on labor market productivity as measured by earnings is examined. Contrarily to previous studies which rely on instrumental variable techniques, selection issues are addressed within a fixed effects framework. The model accounts for short and long term effects as well as general differences between those who intermarry and those who do not. Once unobserved heterogeneity is incorporated, advantageous effects from intermarriage vanish and do not differ from premiums from marriage between immigrants. However, immigrants who eventually intermarry receive greater returns to experience indicating better labor market integration. TITEL: Hidden Skewness JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 12 S. ; Anh. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1043 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060518 IKA: DIW2010||Vorstand SPRACHE: Englisch REPEC_JEL: C91, D03 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359125.de/dp1043.pdf VERFASSERANGABEN: Ludwig Ensthaler, Olga Nottmeyer, Georg Weizsäcker ALLPERS: - ABSTRACT: We provide laboratory evidence that people neglect skewness resulting from compound shocks. TITEL: Job Flows, Demographics and the Great Recession JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 50 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1042 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060517 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: J1, J6 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359113.de/dp1042.pdf VERFASSERANGABEN: Eva Sierminska, Yelena Takhtamanova ALLPERS: - ABSTRACT: The recession the United States economy entered in December of 2007 is considered to be the most severe downturn the country has experienced since the Great Depression. The unemployment rate reached as high as 10.1 percent in October 2009 - the highest we have seen since the 1982 recession. In this paper we examine the severity of this recession compared to those in the past by examining worker flows into and out of unemployment taking into account changes in the demographic structure of the population. We identify the most vulnerable groups of this recession by dissagregating the workforce by age, gender and race. We find that adjusting for the aging of the U.S. labor force increases the severity of this recession. Our results indicate that the increase in the unemployment rate is driven to a larger extent by the lack of hiring (low outflows), but flows into unemployment are still important for understanding unemployment rate dynamics (they are not as acyclical as some literature suggests) and differences in unemployment rates across demographic groups. We find that this is indeed a "mancession," as men face higher job separation probabilities, lower job finding probabilities and, as a result, higher unemployment rates than women. Lastly, there is some evidence that blacks suffered more than whites (again, this difference is particularly pronounced for men). TITEL: The Impact of Real Oil Price on Real Effective Exchange Rate The Case of Azerbaijan JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 26 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1041 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060530 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: F31, F41, C32, P24, Q43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359129.de/dp1041.pdf VERFASSERANGABEN: Fakhri Hasanov ALLPERS: - ABSTRACT: Using quarterly data from 2000-2007 and applying Error Correction Model and Johansen Co-integration Approaches I estimate the impact of real oil price on the real exchange rate of Azerbaijani manat. Estimation outputs derived from these approaches are very close to each other and indicate that real oil price has statistically significant positive impact on real exchange rate in the long-run. Besides, revealed that relative price as a proxy for productivity has also explanatory power in explaining long-run behavior of real exchange rate. Estimated Error Correction Term indicates that half-life of adjustment toward long-run equilibrium level takes 3-4 quarters. Since findings of this study occur as results of high fiscal expansion my policy suggestions mainly related to Fiscal policy implementations. TITEL: Driven by the Markets? ECB Sovereign Bond Purchases and the Securities Markets Programme JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 15 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1040 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060448 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: G32, E42, E51, E58, E63 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359026.de/dp1040.pdf VERFASSERANGABEN: Ansgar Belke ALLPERS: - ABSTRACT: After the dramatic rescue package for the euro area, the governing council of the European Central Bank decided to purchase European government bonds - to ensure an "orderly monetary policy transmission mechanism". Many observers argued that, by bond purchases, national fiscal policies could from now on dominate the common monetary policy. This note argues that they are quite right. The ECB has indeed become more dependent in political and financial terms. The ECB has decided to sterilise its bond purchases - compensating those purchases through sales of other bonds or money market instruments to keep the overall money supply unaffected. This is to counter accusations that the ECB is monetizing government debt. This note addresses how effective these sterilisation policies are. One problem inherent in the sterilization approach is that it reshuffles only the liability side of the ECB's balance sheet. It is not well-suited to either diminish the bloated ECB balance sheet or to remove the potentially toxic covered or sovereign bonds from it. In addition, the intake of potentially toxic assets as collateral and by outright purchases in the central bank balance sheet artificially keeps the asset prices up and does not prevent the (quite intransparent) risk transfer from one group of countries to another to occur. Finally, sterilization takes place in a setting of still ultra-lax monetary policies, i.e. of new liquidity-enhancing operations with unlimited allotment, and, hence, does not appear to be overly irrelevant. A credible strategy to deal with the financial crisis should deal primarily with the asset side of the ECB balance sheet. [...]
TITEL: The Long-Term Care System in Germany JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 47 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1039 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060447 IKA: DIW2010||Staat SPRACHE: Englisch REPEC_JEL: H51, I18, I19 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359024.de/dp1039.pdf VERFASSERANGABEN: Erika Schulz ALLPERS: - ABSTRACT: This document provides an overview of the long-term care system, the number and develop-ment of beneficiaries and the long-term care policy in Germany. The report is part of the first stage of the European project ANCIEN (Assessing Needs of Care in European Nations), commissioned by the European Commission under the Seventh Framework Programme (FP7). The first part of the project aims to facilitate structured comparison of the long-term care systems and policies in European Nations. Thus, this report is one of comparable reports provided for most European countries. TITEL: The Long-Term Care System in Denmark JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 24 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1038 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060446 IKA: DIW2010||Staat SPRACHE: Englisch REPEC_JEL: H51, I18, I19 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.359021.de/dp1038.pdf VERFASSERANGABEN: Erika Schulz ALLPERS: - ABSTRACT: This document provides an overview of the long-term care system, the number and develop-ment of beneficiaries and the long-term care policy in Denmark. The report is part of the first stage of the European project ANCIEN (Assessing Needs of Care in European Nations), commissioned by the European Commission under the Seventh Framework Programme (FP7). The first part of the project aims to facilitate structured comparison of the long-term care systems and policies in European Nations. Thus, this report is one of comparable reports provided for most European countries. TITEL: Income and Longevity Revisited Do High-Earning Women Live Longer? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 27 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1037 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060388 IKA: DIW2010||Vorstand SPRACHE: Englisch REPEC_JEL: I12, H55 DOKUMENT: http://www.diw.de/documents/publikationen/73diw_01.c.358682.de/dp1037.pdf VERFASSERANGABEN: Friedrich Breyer, Jan Marcus ALLPERS: - ABSTRACT: The empirical relationship between income and longevity has been addressed by a large number of studies, but most were confined to men. In particular, administrative data from public pension systems are less reliable for women because of the loose relationship between own earnings and household income. Following the procedure first used by Hupfeld (2010), we analyze a large data set from the German public pension scheme on women who died between 1994 and 2005, employing both non-parametric and parametric methods. To overcome the problem mentioned above we concentrate on women with relatively long earnings history. We find that the relationship between earnings and life expectancy is very similar for women as for men: Among women who contributed at least for 25 years, a woman at the 90th percentile of the income distribution can expect to live 3 years longer than a woman at the 10th percentile. TITEL: Measuring Regional Inequality by Internet Car Price Advertisements Evidence for Germany JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 15 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1036 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060317 IKA: DIW2010||Konjunktur SPRACHE: Englisch REPEC_JEL: C21, O47, R11 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358566.de/dp1036.pdf VERFASSERANGABEN: Konstantin A. Kholodilin, Boriss Siliverstovs ALLPERS: - ABSTRACT: We suggest to use Internet car sale price advertisements for measuring economic inequality between and within German regions. Our estimates of regional income levels and Gini indices based on advertisements are highly, positively correlated with the official figures. This implies that the observed car prices can serve as a reasonably good proxy for income levels. In contrast to the traditional measures, our data can be fast and inexpensively retrieved from the web, and more importantly allow to estimate Gini indices at the NUTS2 level-something that never has been done before. Our approach to measuring regional inequality is a useful alternative source of information that could complement officially available measures. TITEL: Do External Technology Acquisitions Matter for Innovative Efficiency and Productivity? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1035 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060386 IKA: DIW2010||IID SPRACHE: Englisch REPEC_JEL: O30, L24, L25, L60 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358679.de/dp1035.pdf VERFASSERANGABEN: Tseveen Gantumur, Andreas Stephan ALLPERS: - ABSTRACT: To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference matching approach and firm-level panel from the German Innovation Survey for the period 1992-2004, we find that manufacturing firms that acquire disembodied technology experience more growth in innovative productivity than non-acquiring firms do. Thus, this study provides evidence on complementarity between internal and external R&D in innovation production, which is attributed by increasing returns to R&D scale and increasing technical efficiency. Moreover, we find that firm size significantly contributes to innovative efficiency and productivity of external technology acquirers. TITEL: Strategic Behavior and International Benchmarking for Monopoly Price Regulation The Case of Mexico JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 32 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1034 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060316 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L95, Q4, Q48 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358547.de/dp1034.pdf VERFASSERANGABEN: Dagobert L. Brito, Juan Rosellón ALLPERS: - ABSTRACT: This paper looks into various models that address strategic behavior in the supply of gas by the Mexican monopoly Pemex. The paper has three very strong technical results. First, the netback pricing rule for the price of domestic natural gas (based on a Houston benchmark price) leads to discontinuities in Pemex's revenue function. Second, having Pemex pay for the gas it uses and the gas it flares increases the value of the Lagrange multiplier associated with the gas processing constraint. Third, if the gas processing constraint is binding, having Pemex pay for the gas it uses and flares does not change the short run optimal solution for the optimization problem, so it will have no impact on short-run behavior. These results imply three clear policy recommendations. The first is that the arbitrage point be fixed by the amount of gas Pemex has the potential to supply in the absence of processing and gathering constraints. The second is that Pemex be charged for the gas it uses in production and the gas it flares. The third is that investment in gas processing and pipeline should be in a separate account from other Pemex investment. TITEL: The Business of Piracy in Somalia JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 56 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1033 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060286 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: K42, O17, F19 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358500.de/dp1033.pdf VERFASSERANGABEN: Sarah Percy, Anja Shortland ALLPERS: - ABSTRACT: This paper argues that contrary to conventional wisdom, Somali piracy is likely to increase if Somalia's domestic stability is improved, and that naval counter-piracy efforts had limited and unpredicted effects. To make this argument we analyze the underlying factors driving piracy off the coast of Somalia and examine the effectiveness of the international naval anti-piracy mission. We show that while the navies perform well with respect to their declared aims, they failed to resolve the piracy problem through 2009: pirates were not deterred from attacking ships in the Gulf of Aden and have expanded their operations in the Indian Ocean and the Arabian Sea. Evidence from domestic conditions in Somalia suggests that land-based approaches focusing on rebuilding state capabilities may also backfire as economic development and greater stability aid pirates. We examine the incentives of the various interest groups in the Gulf of Aden and conclude that the key players have an interest in the continuation of the piracy off Somalia, as long as violence does not escalate and ransoms remain at their current modest levels. TITEL: Implementing CDM Limits in the EU ETS A Law and Economics Approach JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 37 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1032 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060271 IKA: DIW2010||CPI SPRACHE: Englisch REPEC_JEL: K23, K32, Q48, Q54 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358462.de/dp1032.pdf VERFASSERANGABEN: Alexander Vasa ALLPERS: - ABSTRACT: The EU Emissions Trading Scheme (EU ETS) is the main instrument to reduce greenhouse gas emissions in Europe. Subject to a country specific limit, installations in the EU ETS can use EU allowances (EUA) and certified emissions reductions (CERs) generated through the Clean Development Mechanism (CDM) to fulfil their emission reduction target. The CDM encourages and finances emission reduction projects in developing countries. The basis for the implementation of a CDM usage limit is the supplementarity criteria, which was established to ensure that developed countries only cover part of their compliance obligations with emissions reductions abroad. The CDM limits are differentiated between EU member states to cater to the different levels of emission reduction ambitions, the progress made when the limits were established and the ability of the Member State to reduce emissions. The binding limits created substantial arbitrage rents, due to the CER-EUA spread in the range of 200 million Euro for the year 2008. This paper discusses different options for the allocation of this rent. The paper finds that making the right to use CERs tradable or the regulator precommitting to buying CERs at the level of the limit reduces the inefficiencies connected to the current regulation. Auctioning these CER usage rights furthermore shifts the rents created through the CER-EUA spread to the state. Both the EU ETS and the CDM are scrutinised by academics, industry and non-governmental institutions according to their efficiency and environmental effectiveness. The debate about wind-fall profits has shown that climate policies need to be designed carefully. In light of improving the EU ETS, the use of CDM and in light of upcoming regional emissions trading schemes in other developed economies, this paper shows how CDM limits can be designed more efficiently. TITEL: The Shadow Economy in International Comparison Options for Economic Policy Derived from an OECD Panel Analysis JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 72 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1031 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060101 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: C23, E61, H26, O17 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358296.de/dp1031.pdf VERFASSERANGABEN: Ulrich Thießen ALLPERS: - ABSTRACT: Building on new behavioral and institutional theories, using a data set of about 450 variables and augmenting the Sala-i-Martin definition of robustness, we find evidence in support of the hypothesis that the standard causes of the shadow economy (SE), taxes, the administrative burden and labor market regulations, are not per se crucial in determining the size of the SE. There are many other influences with a consistently estimated plausible sign and whose quantitative impact appears to be even larger and more significant than that of the standard causes. Many of the robust influences emanate from relatively new theories such as elements of direct democracy, social interaction effects, moral aspects, and happiness, and from the institutional literature on the relative importance of specific institutions for economic performance. Most of them can well be influenced by governments. Hence, in order to reduce the SE and tax avoidance, a coordinated international strategy of using incentives to work, save, and invest in the official economy, including the behavior of the government, could be more successful than a strategy built on more government control, increased punishment and less freedom. The latter strategy would contradict the new theories and our evidence but appears to have been adopted by some OECD countries. Simulations of the size of the SE demonstrate their sensitivity to required velocity assumptions and show that previous estimates, including those of the so-called Mimic model, appear to be based on the very high end of possible velocity assumptions. Relatively low velocity assumptions can be defended much better and yield macro estimates of the SE consistent with the micro evidence. Finally, for the first time we separate the relatively large "criminal" shadow activity from the "non-criminal" one. TITEL: Empiricism Meets Theory Is the Boone-Indicator Applicable? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 28 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1030 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060160 IKA: DIW2010||IID||Vorstand SPRACHE: Englisch REPEC_JEL: L12, L41, D43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358332.de/dp1030.pdf VERFASSERANGABEN: Alexander Schiersch, Jens Schmidt-Ehmcke ALLPERS: - ABSTRACT: Boone (2008a) proposes a new competition measure based on Relative Profit Differences (RPD) with superior theoretical properties. However, the empirical applicability and robust-ness of the Boone-Indicator is still unknown. This paper aims to address that question. Using a rich, newly built, data set for German manufacturing enterprises, we test the empirical valid-ity of the Boone-Indicator using cartel cases. Our analysis reveals that the traditional regres-sion approach of the indicator fails to correctly indicate competition. A proposed augmented indicator based on RPDs performs better. The traditional Lerner-Index is still the only meas-ure that correctly indicates the expected competitive changes. TITEL: Liquidity Risk, Credit Risk and the Overnight Interest Rate Spread A Stochastic Volatility Modelling Approach JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 20 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1029 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060044 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C32, E52, E58 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358100.de.pdf VERFASSERANGABEN: John Beirne, Guglielmo Maria Caporale, Nicola Spagnolo ALLPERS: - ABSTRACT: In this paper we model the volatility of the spread between the overnight interest rate and the central bank policy rate (the policy spread) for the euro area and the UK during the two main phases of the financial crisis that began in late 2007. During the crisis, the policy spread exhibited signs of volatility, owing to the breakdown in interbank market activity. The determinants of this volatility are assessed using Stochastic Volatility models to gauge the role played by liquidity risk, credit risk (financial and sovereign), and interest rate expectations. Our results suggest that liquidity risk is the main determinant of the volatility of the policy spread, but also that private bank credit risk has become more apparent in the post-Lehman collapse phase of the crisis for the euro area as financial CDS premia rose due to possible default fears. In addition, the ECB appears to have been more effective in addressing liquidity risk since the onset of the crisis, and this may be related to its greater direct access to a broader range of counterparties and its acceptance of a broader range of eligible collateral. The main implication is that, in crisis times, a sufficiently flexible operational framework for monetary policy implementation produces the most timely response to market tensions. TITEL: Merchant Electricity Transmission Expansion A European Case Study JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 22 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1028 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060075 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L91, L94, Q40 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358288.de/dp1028.pdf VERFASSERANGABEN: Tarjei Kristiansen, Juan Rosellón ALLPERS: - ABSTRACT: We apply a merchant transmission model to the trilateral market coupling (TLC) arrangement among the Netherlands, Belgium and France as a generic example, and note that it can be applied to any general market splitting or coupling of Europe's different national power markets. In this merchant framework; the system operator allocates financial transmission rights (FTRs) to investors in transmission expansion based upon their preferences, and revenue adequacy. The independent system operator (ISO) preserves some proxy FTRs to deal with potential negative externalities due to an expansion project. This scheme proves to be capable in providing incentives for investment in transmission expansion projects within TLC areas. TITEL: Pricing Natural Gas in Mexico: An Application of the Little Mirrlees Rule The Case of Quasi-Rents JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 8 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1027 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060042 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: Q40, L51 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358095.de/dp1027.pdf VERFASSERANGABEN: Dagobert L. Brito, Juan Rosellón ALLPERS: - ABSTRACT: In 1997, the Comisión Reguladora de Energía of Mexico implemented a netback rule for linking the Mexican natural gas price to the Texas price. At the time, the Texas price reflected a reasonably competitive market. Since that time, there have been dramatic increases in the demand for natural gas and there are various bottlenecks in the supply of natural gas. As a result, the price of natural gas in Texas now reflects the quasi-rents created by these bottlenecks. We address the optimality of the netback rule when the price of gas at the Texas market reflects the quasi-rents created by bottlenecks in the supply of natural gas to the United States pipeline system. In this paper, it is shown that it is optimal for the Mexican government to use the netback rule based on the Texas price of gas to set the price of natural gas in Mexico even though the Texas market cannot be considered a competitive market, and the Texas price for natural gas reflects quasi-rents created by various bottlenecks. TITEL: Incentives for Transmission Investment in the PJM Electricity Market FTRs or Regulation (or Both?) JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 27 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1026 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060016 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L91, L94, Q40 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358036.de/dp1026.pdf VERFASSERANGABEN: Juan Rosellón, Zdenka Mysliková, Eric Zenón ALLPERS: - ABSTRACT: This paper presents an application of a mechanism that provides incentives to promote transmission network expansion in the area of the US electric system known as PJM. The applied mechanism combines the merchant and regulatory approaches to attract investment into transmission grids. It is based on rebalancing a two-part tariff in the framework of a wholesale electricity market with locational pricing. The expansion of the network is carried out through the sale of financial transmission rights for the congested lines. The mechanism is tested for 14-node and 17-node geographical coverage areas of PJM. Under Laspeyres weights, it is shown that prices converge to the marginal cost of generation, the congestion rent decreases, and the total social welfare increases. The mechanism is shown to adjust prices effectively given either non-peak or peak demand. TITEL: Toward a Combined Merchant-Regulatory Mechanism for Electricity Transmission Expansion JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 33 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1025 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060008 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: D24, L51, L94 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357982.de/dp1025.pdf VERFASSERANGABEN: William Hogan, Juan Rosellón, Ingo Vogelsang ALLPERS: - ABSTRACT: Electricity transmission pricing and transmission grid expansion have received increasing regulatory and analytical attention in recent years. Since electricity transmission is a very special service with unusual characteristics, such as loop flows, the approaches have been largely tailor-made and not simply taken from the general economic literature or from the more specific but still general incentive regulation literature. An exception has been Vogelsang (2001), who postulated transmission cost and demand functions with fairly general properties and then adapted known regulatory adjustment processes to the electricity transmission problem. A concern with this approach has been that the properties of transmission cost and demand functions are little known but are suspected to differ from conventional functional forms. The assumed cost and demand properties in Vogelsang (2001) may actually not hold for transmission companies (Transcos). Loop-flows imply that certain investments in transmission upgrades cause negative network effects on other transmission links, so that capacity is multidimensional. Total network capacity might even decrease due to the addition of new capacity in certain transmission links. The transmission capacity cost function can be discontinuous. There are two disparate approaches to transmission investment: one employs the theory based on long-run financial rights (LTFTR) to transmission (merchant approach), while the other is based on the incentive-regulation hypothesis (regulatory approach). An independent system operator (ISO) could handle the actual dispatch and operational pricing. The transmission firm is regulated through benchmark or price regulation to provide long-term investment incentives while avoiding congestion. In this paper we consider the elements that could combine the merchant and regulatory approaches in a setting with price-taking electricity generators and loads. TITEL: Lumpy Investment in Regulated Natural Gas Pipelines An Application of the Theory of the Second Best JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 19 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1024 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060007 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L95 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357977.de/dp1024.pdf VERFASSERANGABEN: Dagobert L. Brito, Juan Rosellón ALLPERS: - ABSTRACT: We address investment in regulated natural gas pipelines when investment is lumpy and the demand for gas is stochastic. This is a problem that can be solved in theory as a dynamic program, but a practical solution depends on functions and parameters that are either subjective or cannot be estimated. We then reformulate the problem from the standpoint of consumers that face incomplete markets. It is shown that for reasonable parameter values consumers prefer to pay for excess capacity rather than bear the risk of congestion. These strategies can be implemented with reasonably straightforward policies. Since the demand for gas is very inelastic, the welfare losses associated from small deviations from a first best optimum are minimal. This implies that the gas pipeline system can be regulated with a relatively simple set of transparent rules without any significant loss of welfare. TITEL: Regionality Revisited An Examination of the Direction of Spread of Currency Crisis JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 31 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1023 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060043 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: F31, F32, C11 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358098.de/dp1023.pdf VERFASSERANGABEN: Amil Dasgupta, Roberto Leon-Gonzalez, Anja Shortland ALLPERS: - ABSTRACT: What determines the direction of spread of currency crises? We examine data on waves of currency crises in 1992, 1994, 1997, and 1998 to evaluate several hypotheses on the determinants of contagion. We simultaneously consider trade competition, financial links, and institutional similarity to the "ground-zero" country as potential drivers of contagion. To overcome data limitations and account for model uncertainty, we utilize Bayesian methodologies hitherto unused in the empirical literature on contagion. In particular, we use the Bayesian averaging of binary models which allows us to take into account the uncertainty regarding the appropriate set of regressors. We find that institutional similarity to the ground-zero country plays an important role in determining the direction of contagion in all the emerging market currency crises in our dataset. We thus provide persuasive evidence in favour of the "wake up call" hypothesis for financial contagion. Trade and financial links may also play a role in determining the direction of contagion, but their importance varies amongst the crisis periods. TITEL: How Do Tourists React to Political Violence? An Empirical Analysis of Tourism in Egypt JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1022 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0060074 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: P48, L83 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.358263.de/dp1022.pdf VERFASSERANGABEN: David Fielding, Anja Shortland ALLPERS: - ABSTRACT: This paper uses a detailed database of political violence in Egypt to study European and US tourists' attitudes towards travelling to a conflict region. We use time series analysis to study the heterogeneous impacts of different dimensions of political violence and counter-violence on tourist flows to Egypt in the 1990s. We find that both US and EU tourists respond negatively to attacks on tourists, but do not appear to be influenced by casualties arising in confrontations between domestic groups. However, European tourists are sensitive to the counter-violence measures implemented by the Egyptian government. There is also evidence of tourism in Egypt being affected by the Israeli / Palestinian conflict, with arrivals of tourists into Egypt rising when fatalities in Israel increase. TITEL: WIATEC: A World Integrated Assessment Model of Global Trade Environment and Climate Change JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 42 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1021 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059986 IKA: DIW2010||EVU SPRACHE: Englisch REPEC_JEL: Q55, O38, C68 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357835.de/dp1021.pdf VERFASSERANGABEN: Truong P. Truong, Claudia Kemfert ALLPERS: - ABSTRACT: This paper describes the structure of the World Integrated Assessment model of global Trade, Environmental, and Climate change (WIATEC).The model consists of a multi-regional multi-sectoral core CGE model linked to a climate model. The core CGE is based on an existing global trade and environment model called GTAP-E (Truong, 1999; Burniaux and Truong, 2002). A suite of different and interchangeable 'modules' are then built around this 'core' to enable the model to be able to handle a range of different policy issues such as CO2 emissions, abatement, trading, non-CO2 (CH4 and N2O) emissions, land use land use change and forestry (LULUCF) activities, and changing technologies in the electricity generation sector. The approach which uses a core model structure with different additional modules built around this core structure allows the overall model to be flexible and can be adapted to a range of different policy issues. We illustrate the usefulness of this approach in a policy experiment which looks at the interaction between emissions trading scheme and the promotion of renewable energy targets in the European Union climate policy. TITEL: Long-Run Cost Functions for Electricity Transmission JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 27 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1020 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059947 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L91, L94, Q40 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357712.de/dp1020.pdf VERFASSERANGABEN: Juan Rosellón, Ingo Vogelsang, Hannes Weigt ALLPERS: - ABSTRACT: Electricity transmission has become the pivotal industry segment for electricity restructuring. Yet, little is known about the shape of transmission cost functions. Reasons for this can be a lack of consensus about the definition of transmission output and the complexitity of the relationship between optimal grid expansion and output expansion. Knowledge of transmission cost functions could help firms (Transcos) and regulators plan transmission expansion and could help design regulatory incentive mechanisms. We explore transmission cost functions when the transmission output is defined as point-to-point transactions or financial transmission right (FTR) obligations and particularly explore expansion under loop-flows. We test the behavior of FTR-based cost functions for distinct network topologies and find evidence that cost functions defined as FTR outputs are piecewise differentiable and that they contain sections with negative marginal costs. Simulations, however, illustrate that such unusual properties do not stand in the way of applying price-cap incentive mechanisms to real-world transmission expansion. TITEL: A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks Theory, Modeling, and Application JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 28 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1019 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059946 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: L51, L91, L94, Q40 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357701.de/dp1019.pdf VERFASSERANGABEN: Juan Rosellón, Hannes Weigt ALLPERS: - ABSTRACT: We propose a price-cap mechanism for electricity-transmission expansion based on redefining transmission output in terms of financial transmission rights. Our mechanism applies the incentive-regulation logic of rebalancing a two-part tariff. First, we test this mechanism in a three-node network. We show that the mechanism intertemporally promotes an investment pattern that relieves congestion, increases welfare, augments the Transco´s profits, and induces convergence of prices to marginal costs. We then apply the mechanism to a grid of northwestern Europe and show a gradual convergence toward a common-price benchmark, an increase in total capacity, and convergence toward the welfare optimum. TITEL: Intangibles, Can They Explain the Dispersion in Return Rates? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 19 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1018 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059868 IKA: DIW2010||IID SPRACHE: Englisch REPEC_JEL: L23, D24, M10, C15 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357439.de/dp1018.pdf VERFASSERANGABEN: Bernd Görzig, Martin Gornig ALLPERS: - ABSTRACT: It is argued that the observed return rates on capital at firm-level have an upward bias if firms are producing with unobserved intangible capital. Using EUKLEED, a comprehensive firm level data base for Germany, this theoretical preposition is proved empirically. Furthermore, making unobserved capital observable the dispersion in return rates reduces dramatically. The results clearly support the assumption that a considerable part of the observed dispersion in return rates among firms can be contributed to unobserved capital formation in intangible capital. Firms with high input in intangibles also have an above average observed rate of return. However, the question to what extent a more intense use of intangibles can be the cause for higher return rates in the sense of both the monopoly-based and the innovation-based explanations is not answered. TITEL: Energy Consumption and Economic Growth New Insights into the Cointegration Relationship JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 16 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1017 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059850 IKA: DIW2010||Konjunktur SPRACHE: Englisch REPEC_JEL: C33, O13, Q43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357400.de/dp1017.pdf VERFASSERANGABEN: Ansgar Belke, Christian Dreger, Frauke de Haan ALLPERS: - ABSTRACT: This paper examines the long-run relationship between energy consumption and real GDP, including energy prices, for 25 OECD countries from 1981 to 2007. The distinction between common factors and idiosyncratic components using principal component analysis allows to distinguish between developments on an international and a national level as drivers of the long-run relationship. Indeed, cointegration between the common components of the underlying variables indicates that international developments dominate the long-run relationship between energy consumption and real GDP. Furthermore, the results suggest that energy consumption is price-inelastic. Causality tests indicate the presence of a bi-directional causal relationship between energy consumption and economic growth. TITEL: Long Memory and Fractional Integration in High Frequency Financial Time Series JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 25 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1016 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059848 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C22 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357365.de/dp1016.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Luis A. Gil-Alana ALLPERS: - ABSTRACT: This paper analyses the long-memory properties of high frequency financial time series. It focuses on temporal aggregation and the influence that this might have on the degree of dependence of the series. Fractional integration or I(d) models are estimated with a variety of specifications for the error term. In brief, we find evidence that a lower degree of integration is associated with lower data frequencies. In particular, when the data are collected every 10 minutes there are several cases with values of d strictly smaller than 1, implying mean-reverting behaviour. This holds for all four series examined, namely Open, High, Low and Last observations for the British pound/US dollar spot exchange rate. TITEL: Does Employer Learning Vary by Occupation? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 41 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1015 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059847 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: J24, J31, J71, J62 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357357.de/dp1015.pdf VERFASSERANGABEN: Hani Mansour ALLPERS: - ABSTRACT: Models in which employers learn about the productivity of young workers, such as Altonji and Pierret (2001), have two principal implications: First, the distribution of wages becomes more dispersed as a cohort of workers gains experience; second, the coefficient on a variable that employers initially do not observe, such as the Armed Forces Qualification Test (AFQT) score, grows with experience. If employers' learning varies significantly across occupations, both of these indicators of learning should covary positively across groups defined by a worker's occupational assignment at labor market entry. This paper tests this implication of the employer learning model using data from the NLSY and CPS. I find that occupations with high growth in the variance of residual wages over the first ten years of the worker's career are also the occupations with high growth in the AFQT coefficient, confirming the learning perspective. Interestingly, occupations that my analysis characterizes as having a low level of employer learning are not occupations where employers know little about the worker after ten years of experience; instead they appear to be occupations where employers have already learned about the worker's AFQT score at the time of hire. I provide several pieces of evidence that occupational assignment affects the learning process independently from education and that the results are not driven by workers' occupational mobility. TITEL: The Effects of Labor Supply Shocks on Labor Market Outcomes Evidence from the Israeli-Palestinian Conflict JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 35 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1014 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059846 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: J61, J21, D74, C21 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357345.de/dp1014.pdf VERFASSERANGABEN: Hani Mansour ALLPERS: - ABSTRACT: Since September 2000, as a result of mobility restrictions, the supply of Palestinian workers competing for local jobs in the West Bank has increased by about fifty percent. This paper takes advantage of this unique natural experiment to study the effects of labor supply shocks on labor market outcomes. Using quarterly information on wages and employment in each city in the West Bank, the paper analyzes the short-run adjustment of labor markets to a large inflow of workers separately from the effects of political instability. The results suggest that low-skilled wages are adversely affected by an increase in the supply of low- and high-skilled workers, while high- skilled wages are only weakly negatively related to an increase in their own supply. This is consistent with a scenario in which high skilled workers compete for low skilled jobs, pushing the low skilled into unemployment. This latter hypothesis is confirmed by analyzing the effects of changes in labor supply on unemployment. TITEL: Violent Conflict and Inequality JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 34 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1013 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059870 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: O11, O15 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357459.de/dp1013.pdf VERFASSERANGABEN: Cagatay Bircan, Tilman Brück, Marc Vothknecht ALLPERS: - ABSTRACT: This paper analyzes the distributive impacts of violent conflicts, which is in contrast to previous literature that has focused on the other direction. We use cross-country panel data for the time period 1960-2005 to estimate war-related changes in income inequality. Our results indicate rising levels of inequality during war and especially in the early period of post-war reconstruction. However, we find that this rise in income inequality is not permanent. While inequality peaks around five years after the end of a conflict, it declines again to pre-war levels within the end of the first post-war period. Lagged effects of conflict and only subsequent adjustments of redistributive policies in the period of post-war reconstruction seem to be valid explanations for these patterns of inequality. A series of alternative specifications confirms the main findings of the analysis. TITEL: Consumer Shopping Costs as a Cause of Slotting Fees A Rent-Shifting Mechanism JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 26 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1012 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059914 IKA: DIW2010||IGW SPRACHE: Englisch REPEC_JEL: L22, L42 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357587.de/dp1012.pdf VERFASSERANGABEN: Stéphane Caprice, Vanessa von Schlippenbach ALLPERS: - ABSTRACT: Analyzing a sequential bargaining framework with one retailer and two suppliers of substitutable goods, we show that slotting fees may emerge as a result of a rent-shifting mechanism when consumer shopping costs are taken into account. If consumers economize on their shopping costs by bundling their purchases, their buying decision depends rather on the price for the whole shopping basket than on individual product prices. This induces complementarities between the goods offered at a retail outlet. If the complementarity effect resulting from shopping costs dominates the original substitution effect, the wholesale price negotiated with the first supplier is upward distorted in order to shift rent from the second supplier. As long as the first supplier has only little bargaining power, she compensates the retailer for the upward distorted wholesale price by paying a slotting fee. We also show that banning slotting fees causes per- unit price to fall and welfare to increase. TITEL: Global Imbalances and the Current Account Adjustment Process An Empirical Analysis JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 46 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1011 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059916 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: F31, F32 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357637.de/dp1011.pdf VERFASSERANGABEN: Marius Tippkötter ALLPERS: - ABSTRACT: This paper investigates the impact of the exchange rate regime on the current account adjustment process. In a first step, the present analysis assesses previous empirical work supporting the predominant view that more flexible exchange rate regimes facilitate current account adjustments. Using a FGLS estimator with fixed effects and panel corrected standard errors, the author draws upon the methodological approaches of two pertinent papers. The data set encompasses data for 171 countries for the 1970 to 2008 period. According to the fixed effects estimations, evidence in favor of the "conventional wisdom" does not prove to be robust. After pointing out fundamental weaknesses of the fixed effects estimator within this context, the author performs a dynamic panel estimation using a System GMM estimator fully developed in Blundell and Bond (1998). The results of this approach stand in contrast to the previous estimations, providing solid empirical evidence in favor of the predominant view. A monotonic relationship between exchange rate regime flexibility and the rate of current account reversion can be observed, indicating faster current account convergence for more flexible regimes. By employing an estimator that is more germane to the issue under investigation, the paper fills an important gap between economic common sense and its underlying empirics. TITEL: EU Banks Rating Assignments Is there Heterogeneity between New and Old Member Countries? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 24 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1009 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059757 IKA: DIW2010 REPEC_JEL: C25, C51, C52, G21 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357152.de/dp1009.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Roman Matousek, Chris Stewart ALLPERS: - ABSTRACT: We model EU countries' bank ratings using financial variables and allowing for intercept and slope heterogeneity. Our aim is to assess whether "old" and "new" EU countries are rated differently and to determine whether "new" ones are assigned lower ratings, ceteris paribus, than "old" ones. We find that country-specific factors (in the form of heterogeneous intercepts) are a crucial determinant of ratings. Whilst "new" EU countries typically have lower ratings than "old" ones, after controlling for financial variables we also discover that all countries have significantly different intercepts, confirming our prior belief. This intercept heterogeneity suggests that each country's rating is assigned uniquely, after controlling for differences in financial factors, which may reflect differences in country risk and the legal and regulatory framework that banks face (such as foreclosure laws). In addition, we find that ratings may respond differently to the liquidity and operating expenses to operating income variables across countries. Typically ratings are more responsive to the former and less sensitive to the latter for "new" EU countries compared with "old" EU countries. TITEL: Raising Rivals' Fixed (Labor) Costs The Deutsche Post Case JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 31 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1008 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059727 IKA: DIW2010||IGW SPRACHE: Englisch REPEC_JEL: L12, J52, K31 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357066.de/dp1008.pdf VERFASSERANGABEN: Sven Heitzler, Christian Wey ALLPERS: - ABSTRACT: We analyze the bargaining problem of an incumbent firm and a union when the wage contract becomes generally binding. Our main application relates to competition among operators of mail delivery networks. We describe the Deutsche Post case which highlights the raising rivals' costs incentive and its consequences resulting from labor laws that make collective agreements generally binding. We show that minimum wages implemented by means of extension regulation are an effective deterrence instrument which frustrates both market entry as well as investments into the build-up of a mail delivery network. TITEL: Social Relationships and Trust JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 33 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1007 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059726 IKA: DIW2010||Weltwirtschaft SPRACHE: Englisch REPEC_JEL: C72, C93, D82, O12 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357052.de/dp1007.pdf VERFASSERANGABEN: Christine Binzel, Dietmar Fehr ALLPERS: - ABSTRACT: While social relationships play an important role for individuals to cope with missing market institutions, they also limit individuals' range of trading partners. This paper aims at understanding the determinants of trust at various social distances when information asymmetries are present. Among participants from an informal housing area in Cairo we find that the increase in trust following a reduction in social distance comes from the fact that trustors are much more inclined to follow their beliefs when interacting with their friend. When interacting with an ex-ante unknown agent instead, the decision to trust is mainly driven by social preferences. Nevertheless, trustors underestimate their friend's intrinsic motivation to cooperate, leading to a loss in social welfare. We relate this to the agents' inability to signal their trustworthiness in an environment characterized by strong social norms. TITEL: Estimating Persistence in the Volatility of Asset Returns with Signal Plus Noise Models JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 15 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1006 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059686 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C13, C22 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356855.de/dp1006.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Luis A. Gil-Alana ALLPERS: - ABSTRACT: This paper examines the degree of persistence in the volatility of financial time series using a Long Memory Stochastic Volatility (LMSV) model. Specifically, it employs a Gaussian semiparametric (or local Whittle) estimator of the memory parameter, based on the frequency domain, proposed by Robinson (1995a), and shown by Arteche (2004) to be consistent and asymptotically normal in the context of signal plus noise models. Daily data on the NASDAQ index are analysed. The results suggest that volatility has a component of long- memory behaviour, the order of integration ranging between 0.3 and 0.5, the series being therefore stationary and mean-reverting. TITEL: Gender, Transnational Networks and Remittances Evidence from Germany JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 23 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1005 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059667 IKA: DIW2010||LDM SPRACHE: Englisch REPEC_JEL: F24, J16, D13 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356773.de/dp1005.pdf VERFASSERANGABEN: Elke Holst, Andrea Schäfer, Mechthild Schrooten ALLPERS: - ABSTRACT: Remittances from Germany are substantial. Cross-border transfers to family and friendship networks outside Germany are not only made by foreigners. Many naturalized migrants send money home as well. Here, we focus on international networks and gender-specific determinants of remittances from the senders' perspective, based on data from the German Socio-Economic Panel Study (SOEP) for the years 2001-2006. Our findings show, above all, that foreign women remit less money than foreign men. Using information on the social network in the home country we find, first, that the social network abroad explains part of gender differences in remittance behavior. Second, employing gender interaction terms for the social network effects suggests that remittance behavior is affected by traditional gender roles. Third, the migrant's social integration in the destination country matters. Remittance decisions of naturalized migrants do not show the aforementioned gender effect. TITEL: The Influence of Collusion on Price Changes New Evidence from Major Cartel Cases JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 17 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1004 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059592 IKA: DIW2010||Konjunktur SPRACHE: Englisch REPEC_JEL: L10, L60 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356672.de/dp1004.pdf VERFASSERANGABEN: Korbinian von Blanckenburg, Alexander Geist, Konstantin A. Kholodilin ALLPERS: - ABSTRACT: In this paper, we compare the distribution of price changes between collusive and noncollusive periods for ten major cartels. The first moments focus on previous research. We extend the discussion to the third (skewness) and fourth (kurtosis) moments. However, none of the above descriptive statistics can be considered as a robust test allowing a differentiation between competition and cartel. Therefore, we implement the Kolmogorov-Smirnov test. According to our results, 8 out of 10 cartels were successful in controlling the market price for a number of years. The proposed methodology may be used for antitrust screening and regulatory purposes. TITEL: Konsolidierung der Staatsfinanzen JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 24 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1003 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059565 IKA: DIW2010||Staat SPRACHE: Deutsch DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356634.de/dp1003.pdf VERFASSERANGABEN: Viktor Steiner ALLPERS: - ABSTRACT: Die Konsolidierung der Staatsfinanzen nach der gegenwärtigen Finanz- und Wirtschaftskrise wird eines der zentralen wirtschaftspolitischen Themen der nächsten Jahre sein: Die Regelungen zur "Schuldenbremse" sehen für den Bundeshaushalt bis 2016 einen annähernd ausgeglichenen Haushalt vor, und auch die Länderhaushalte sollen bis 2020 weitgehend konsolidiert werden. Dadurch ergibt sich ein erheblicher Konsolidierungsbedarf der öffentlichen Haushalte, der sich bei realistischen Annahmen über das strukturelle Defizit im Ausgangsjahr 2010 und die zu erwartende langfristige gesamtwirtschaftliche Wachstumsrate bis 2016 auf knapp 80 Mrd. Euro summiert. Bei einem Ausgleich der kalten Progression durch eine Tarifanpassung bei der Einkommensteuer, wie in der Koalitionsvereinbarung der Regierungsparteien vorgesehen, würde der Konsolidierungsbedarf bis 2016 auf deutlich über 100 Mrd. Euro zunehmen. Damit verbunden wäre ein erheblicher Anstieg der Staatsverschuldung auf deutlich über 80% des BIP. Aber auch bei einer erfolgreichen Konsolidierung würde die Staatsverschuldung in 2016 noch ca. 75% des BIP betragen. Vor dem Hintergrund der demografischen Entwicklung, die längerfristig mit einem erheblichen Anstieg der Staatsausgaben verbunden sein wird, erscheint die Konsolidierung der Staatsfinanzen geboten. Der Konsolidierungsbedarf sollte nach der Krise vor allem über die Ausgabenseite realisiert werden. Wahrscheinlich werden aber die politisch realisierbaren Ausgabenkürzungen alleine nicht ausreichen, Steuer- und Abgabenerhöhungen werden ergänzend erforderlich sein. Erhöhungen der indirekten und vermögensbezogenen Steuern sind ökonomisch weniger schädlich als die der direkten Steuern und der Sozialabgaben. Die Spielräume für Steuerentlastungen sind gering; der Ausgleich der kalten Progression bei der Einkommensteuer ist wünschenswert, müsste aber gegenfinanziert werden. TITEL: Drivers of Private Equity Investment in CEE and Western European Countries JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 26 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1002 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059527 IKA: DIW2010||IID SPRACHE: Englisch REPEC_JEL: C23, C52, E22, G24 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356556.de/dp1002.pdf VERFASSERANGABEN: Kerstin Bernoth, Roberta Colavecchio, Magdolna Sass ALLPERS: - ABSTRACT: A strong private equity market is a cornerstone for commercialization and innovation in modern economies. However, substantial differences exist in the relative amounts raised and invested in private equity across European countries. We investigate the macro-determinants of private equity investment in Europe, focusing on the comparison between CEE and Western European countries. Our estimations are based on a data set running from 2001 to 2008 and covers 14 Western European and three CEE countries. Applying robust estimation techniques we identify a 'robust' set of determinants of private equity activity in both regions. We find similarities as well as differences in the driving forces of private equity investments in Western European and CEE countries. Our results suggest that commercial bank lending, equity market capitalization, unit labour costs and corporate tax rates are significant determinants of private equity activity. TITEL: Zur Unterrepräsentanz von Frauen in Spitzengremien der Wirtschaft Ursachen und Handlungsansätze JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 17 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1001 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059513 IKA: DIW2010||LDM SPRACHE: Deutsch REPEC_JEL: G38, J16, J44, J71, M14 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356535.de/dp1001.pdf VERFASSERANGABEN: Elke Holst, Anita Wiemer ALLPERS: - ABSTRACT: The paper proceeds from the assumption that the inequalities of opportunity between men and women on the labor market and in society overall tend to consolidate in the management bodies of large companies. The predominance of men on the supervisory boards of Germany's largest private sector companies has created a 'male monoculture' there. In the literature, structural and ideological barriers are identified as the reasons for this severe underrepresentation of women. Increasing the percentage of women in management positions in the private sector would still require the support of upper-level (male) management. In other countries, progress has already been made in this area with the use of quotas. TITEL: Labor Market and Income Effects of a Legal Minimum Wage in Germany JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1000 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059506 IKA: DIW2010||Staat REPEC_JEL: I32, H31, J32 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356489.de/dp1000.pdf VERFASSERANGABEN: Kai-Uwe Müller, Viktor Steiner ALLPERS: - ABSTRACT: In view of rising wage and income inequality, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of a nationwide legal minimum wage of 7.50 € per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system and net household incomes, also taking into account potential employment effects as well as indirect effects on consumption. Simulation results show that the minimum wage would be rather ineffective in raising net household incomes and reducing income inequality, even if it led to a substantial increase in hourly wages at the bottom of the wage distribution. The ineffectiveness of a minimum wage in Germany is mainly due to the existing system of means-tested income support and the position of minimum wage earners in the income distribution. TITEL: Do Ethnic Minorities "Stretch" Their Time? Evidence from the UK Time Use Survey JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 24 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 999 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059558 IKA: DIW2010||Vorstand SPRACHE: Englisch REPEC_JEL: J22, J15 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356618.de/dp999.pdf VERFASSERANGABEN: Anzelika Zaiceva, Klaus F. Zimmermann ALLPERS: - ABSTRACT: This paper investigates the effect of ethnicity on time spent on overlapped household production, work and leisure activities employing the 2000-2001 UK Time Use Survey. We find that, unconditionally, white females manage to "stretch" their time the most by an additional 233 minutes per day and non-white men "stretch" their time the least. The three secondary activities that are most often combined with other (primary) activities in terms of time spent on them are social activities including resting, passive leisure and childcare. Regression results indicate that non-white ethnic minorities engage less in multitasking than whites, with Pakistani and Bangladeshi males spending the least time. The gap is present for both ethnic minority males and females, although females in general engage more in multitasking. The effect is also heterogeneous across different sub-groups. We then discuss several potential interpretations and investigate whether these differences in behavior may also relate to opportunity costs of non-market time, different preferences and tastes of ethnic minorities, integration experience, family composition, household productivity and other. TITEL: Gender Differences in Subjective Well-Being in and out of Management Positions JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 32 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 998 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059502 IKA: DIW2010||LDM DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356386.de/dp998.pdf VERFASSERANGABEN: Eileen Trzcinski, Elke Holst ALLPERS: - ABSTRACT: This study used data from the German Socio-economic Panel to examine gender differences in the extent to which self-reported subjective well-being was associated with occupying a high-level managerial position in the labour market, compared with employment in nonleadership, non-high-level managerial positions, unemployment, and non-labour market participation. Our results indicated that a clear hierarchy exists for men in term of how status within the labour market was associated with subjective life satisfaction. Unemployed men were the least satisfied, followed by men who were not in the labour market, while men in leadership positions reported the highest level of subjective life satisfaction. For women, no statistically significant differences were observed among women in high-level managerial positions, women who worked in non-high-level positions, and women who specialized in household production, with no market work. Only women who were unemployed reported lower levels of life satisfaction, compared with women in other labour-market statuses. Our results lend evidence to the contention that men can "have it all", but women must still choose between career and family in Germany. We argue that interventions need to address how the non-pecuniary rewards associated with high-level managerial and leadership positions can be increased for women. Such policies would also likely serve to mitigate the "pipeline" problem concerning the number of women who are available to move into high positions in the private sector. TITEL: Do Google Searches Help in Nowcasting Private Consumption? A Real-Time Evidence for the US JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 27 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 997 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059412 IKA: DIW2010||Konjunktur SPRACHE: Englisch REPEC_JEL: C22, C53, C82 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.356220.de/dp997.pdf VERFASSERANGABEN: Konstantin A. Kholodilin, Maximilian Podstawski, Boriss Siliverstovs ALLPERS: - ABSTRACT: In this paper, we investigate whether the Google search activity can help in nowcasting the year-on-year growth rates of monthly US private consumption using a real-time data set. The Google-based forecasts are compared to those based on a benchmark AR(1) model and the models including the consumer surveys and financial indicators. According to the Diebold-Mariano test of equal predictive ability, the null hypothesis can be rejected suggesting that Google-based forecasts are significantly more accurate than those of the benchmark model. At the same time, the corresponding null hypothesis cannot be rejected for models with consumer surveys and financial variables. Moreover, when we apply the test of superior predictive ability (Hansen, 2005) that controls for possible data-snooping biases, we are able to reject the null hypothesis that the benchmark model is not inferior to any alternative model forecasts. Furthermore, the results of the model confidence set (MCS) procedure (Hansen et al., 2005) suggest that the autoregressive benchmark is not selected into a set of the best forecasting models. Apart from several Google-based models, the MCS contains also some models including survey-based indicators and financial variables. We conclude that Google searches do help improving the nowcasts of the private consumption in US. TITEL: How Much Fiscal Backing Must the ECB Have? The Euro Area Is Not the Philippines JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 15 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 996 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059357 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: G32, E42, E51, E58, E63 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.355797.de/dp996.pdf VERFASSERANGABEN: Ansgar Belke ALLPERS: - ABSTRACT: The ECB has accepted increasing amounts of rubbish collateral since the crisis started leading to exposure to serious private sector credit risk (i.e. default risk) on its collateralised lending and reverse operations ("repo"). This has led some commentators to argue that the ECB needs "fiscal back-up" to cover any potential losses to be able to continue pursuing price stability. This Brief argues that fiscal backing is not necessary for the ECB for three reasons. Firstly, the ECB balance sheet risk is small compared to the FED and BoE as it neither increased its quasi-fiscal operations as much as the Fed or the BoE nor did it engage to a very large extent in outright bond purchases during the financial crisis. Secondly, the ECB's specific accounting principles of repo operations provide for more clarity and earlier recognition of losses. Thirdly, the ECB can draw on substantial reserves of the euro area national banks. TITEL: Financial Crisis, Global Liquidity and Monetary Exit Strategies JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 34 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 995 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059356 IKA: DIW2010 REPEC_JEL: E52, E58, F42, E63 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.355795.de/dp995.pdf VERFASSERANGABEN: Ansgar Belke ALLPERS: - ABSTRACT: We develop a roadmap of how the ECB should further reduce the volume of money (money supply) and roll back credit easing in order to prevent inflation. The exits should be step-by-step rather than one-off. Communicating about the exit strategy must be an integral part of the exit strategy. Price stability should take precedence in all decisions. Due to vagabonding global liquidity, there is a strong case for globally coordinating monetary exit strategies. Given unsurmountable practical problems of coordinating exit with asymmetric country interests, however, the ECB should go ahead - perhaps joint with some Far Eastern economies. Coordination of monetary and fiscal exit would undermine ECB independence and is also technically out of reach within the euro area. TITEL: Innovation in Concentrating Solar Power Technologies A Study Drawing on Patent Data JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 44 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 994 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059219 IKA: DIW2010||IID||EVU SPRACHE: Englisch REPEC_JEL: O31, Q42, Q54, Q55 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354986.de/dp994.pdf VERFASSERANGABEN: Frauke G. Braun, Liz Hooper, Robert Wand, Petra Zloczysti ALLPERS: - ABSTRACT: Better understanding the innovative process of renewable energy technologies is important for tackling climate change. Though concentrating solar power is receiving growing interest, innovation studies so far have explored innovative activity in solar technologies in general, ignoring the major differences between solar photovoltaic and solar thermal technologies. This study relies on patent data to examine international innovative activity in concentrating solar power technologies. Our unique contribution, based on engineering expertise and detailed datawork, is a classification system matching solar thermal technologies to the International Patent Classification (IPC) system. To this end we suggest a narrowly defined set of IPC classes and a broader one of technologies relevant to CSP, but not exclusively so. We moreover exploit information from three international patent offices, the European, the United States and the Japanese patent office. Innovative activity in narrowly defined CSP technologies has experienced an early boom before 1980 and only recently showed some signs of more activity - a pattern closely resembling the R&D support path. R&D and innovation are concentrated in few high-tech countries - such as the U.S. or Germany. Large CSP potential is not a sufficient condition for innovation, only developed countries such as Australia with both CSP potential and adequate economic and scientific capabilities are found to be among the group of relevant innovators. TITEL: Innovative Activity in Wind and Solar Technology Emprical Evidence on Knowledge Spillovers Using Patent Data JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 28 S., XI GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 993 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059207 IKA: DIW2010||IID||EVU SPRACHE: Englisch REPEC_JEL: O31, Q42, Q55 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354961.de/dp993.pdf VERFASSERANGABEN: Frauke G. Braun, Jens Schmidt-Ehmcke, Petra Zloczysti ALLPERS: - ABSTRACT: This paper studies technological change in renewable energies, providing empirical evidence on the determinants of innovative activity with a special emphasis on the role of knowledge spillovers. We investigate two major renewable energy technologies - wind and solar - across a panel of 21 OECD countries over the period 1978 to 2004. Spillovers may occur at the national level, either within the same technology field or economic sector (intra-sectoral spillovers) or in related technologies or sectors (inter-sectoral spillovers), or at the international level. We find that innovation is strongly driven by knowledge spillovers, especially those occurring at the national level. Wind and solar technologies exhibit distinct innovation characteristics: both are stimulated by intra-sectoral spillovers, but respond differently to inter-sectoral spillovers, which are only influential in the case of wind technology. We also find evidence that public R&D stimulates innovation, particularly in solar technologies. TITEL: One Last Puff? Public Smoking Bans and Smoking Behavior JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 35 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 992 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059208 IKA: DIW2010||LDM REPEC_JEL: I12, K32, I18, C33 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354962.de/dp992.pdf VERFASSERANGABEN: Silke Anger, Michael Kvasnicka, Thomas Siedler ALLPERS: - ABSTRACT: This paper investigates the short-term effects of public smoking bans on individual smoking behavior. In 2007 and 2008, state-level smoking bans were gradually introduced in all of Germany's sixteen federal states. We exploit this variation in the timing of state bans to identify the effect that smoke-free policies had on individuals' smoking propensity and smoking intensity. Using rich longitudinal data from the German Socio-Economic Panel Study, our difference-in-differences estimates show that the introduction of smoke-free legislation in Germany did not change average smoking behavior within the population. However, our estimates also point to important heterogeneous effects. Groups that go out more often, and hence are more exposed to the constraints of public smoking bans in everyday life, did adjust their smoking behavior. Specifically, we find that young, unmarried individuals, and those living in urban areas are groups that are both less likely to smoke and smoke less intensively following the introduction of public smoking bans. Furthermore, effects on individual smoking habits proved stronger in states that had more strict smoking bans. Public smoking bans, therefore, have important health benefits over and above the reduction in exposure of non-smokers to second-hand smoke that is their immediate and prime objective. TITEL: Dealing with Incomplete Household Panel Data in Inequality Research JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 32 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 991 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059206 IKA: DIW2010||LDM REPEC_JEL: D33, I32, C81 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354959.de/dp991.pdf VERFASSERANGABEN: Joachim R. Frick, Markus M. Grabka, Olaf Groh-Samberg ALLPERS: - ABSTRACT: Population surveys around the world face the problem of declining cooperation and participation rates of respondents. Not only can item nonresponse and unit nonresponse impair important outcome measures for inequality research such as total household disposable income; there is also a further case of missingness confronting household panel surveys that potentially biases results. The approach commonly used in such surveys of interviewing all adult household members and aggregating their individual incomes to yield a final outcome measure for welfare analyses often suffers from partial unit non-response (PUNR), i.e., the non-response of at least one unit, or member, of an otherwise participating household. In these cases, the aggregate income of all household members lacks at least one individual's income. These processes are typically not random and require appropriate correction. Using data from more than twenty waves of the German Socio-Economic Panel (SOEP) we evaluate four different strategies to deal with this phenomenon: (a) Ignorance, i.e., assuming the missing individual's income to be zero. (b) Adjustment of the equivalence scale to account for differences in household size and composition. (c) Elimination of all households observed to suffer PUNR, and re-weighting of households observed to be at risk of but not affected by PUNR. (d) Longitudinal imputation of the missing income components. The aim of this paper is to show how the choice of technique affects substantive results in the inequality research. We find indications of substantial bias on income inequality and poverty as well as on income mobility. These findings are obviously even more important in cross-national comparative analyses if the data providers in the individual countries deal differently with PUNR in the underlying data. TITEL: Does the Tenure of Private Equity Investment Improve the Performance of European Firms? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 22 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 990 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059122 IKA: DIW2010||IID REPEC_JEL: M14, G24, G34 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354604.de/dp990.pdf VERFASSERANGABEN: Oleg Badunenko, Christopher F. Baum, Dorothea Schäfer ALLPERS: - ABSTRACT: The paper investigates whether the presence and tenure of Private Equity (PE) investment in European companies improves their performance. Previous studies documented the unambiguous merit of a buyout during the 1980s and 1990s for listed firms in the US and UK markets. This study analyzes such influences in both listed and unlisted European firms during 2002-2007. Our analysis suggests that shortterm PE investments have, on average, a detrimental effect on firm performance. The performance of a firm that has PE backing is lower than that of a firm without PE backing in the first year of PE investment. Such an effect disappears if PE investments remain in the firm for an uninterrupted six-year term TITEL: The Forward Premium Puzzle and Latent Factors Day by Day JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 37 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 989 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059120 IKA: DIW2010||Konjunktur REPEC_JEL: F31, F37, G13 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354600.de/dp989.pdf VERFASSERANGABEN: Kerstin Bernoth, Jürgen von Hagen, Casper G. de Vries ALLPERS: - ABSTRACT: We use futures instead of forward rates to study the complete maturity spectrum of the forward premium puzzle from two days to six months. At short maturities the slope coefficient is positive, but these turn negative as the maturity increases to the monthly level. Futures data allow us to control for the influence of an unobserved factor that can be decomposed into a contract-specific and a time- to-maturity effect. Once we do this, we find that the coefficients on the forward premium are much closer to one. The latent factor is shown to be related to conventional proxies of risk. TITEL: Time-Varying Spot and Futures Oil Price Dynamics JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 28 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 988 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059089 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C32, C51, G13, G14 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354179.de/dp988.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Davide Ciferri, Allessandro Girardi ALLPERS: - ABSTRACT: We investigate the role of crude oil spot and futures prices in the process of price discovery by using a cost-of-carry model with an endogenous convenience yield and daily data over the period from January 1990 to December 2008. We provide evidence that futures markets play a more important role than spot markets in the case of contracts with shorter maturities, but the relative contribution of the two types of market turns out to be highly unstable, especially for the most deferred contracts. The implications of these results for hedging and forecasting crude oil spot prices are also discussed. TITEL: Is Government Ownership of Banks Really Harmful to Growth? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 987 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059186 IKA: DIW2010||Weltwirtschaft REPEC_JEL: O16, G18, G28, K42 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.354939.de/dp987.pdf VERFASSERANGABEN: Svetlana Andrianova, Panicos Demetriades, Anja Shortland ALLPERS: - ABSTRACT: We show that previous results suggesting that government ownership of banks is associated with lower long run growth rates are not robust to adding more 'fundamental' determinants of economic growth. We also present new cross-country evidence for 1995-2007 which suggests that, if anything, government ownership of banks has been robustly associated with higher long run growth rates. While acknowledging that cross-country results need not imply causality, we nevertheless provide a conceptual framework, drawing on the global financial crisis of 2008-09, which explains why under certain circumstances government owned banks could be more conducive to economic growth than privately-owned banks. TITEL: The Design of Unemployment Transfers Evidence from a Dynamic Structural Life-cycle Model JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 38 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 986 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058851 IKA: DIW2010||Staat REPEC_JEL: C23, C25, J22, J64 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353552.de/dp986.pdf VERFASSERANGABEN: Peter Haan, Victoria Prowse ALLPERS: - ABSTRACT: In this paper we use a dynamic structural life-cycle model to analyze the employment, fiscal and welfare effects induced by unemployment insurance. The model features a detailed specification of the tax and transfer system, including unemployment insurance benefits which depend on an individual's employment and earnings history. The model also captures the endogenous accumulation of experience which impacts on future wages, job arrivals and job separations. For better identification of the structural parameters we exploit a quasi-natural experiment, namely reductions over time in the entitlement period for unemployment insurance benefits which varied by age and experience. The results show that a policy cut in the generosity of unemployment insurance operationalized as a reduction in the entitlement period generates a larger increase in employment and yields a bigger fiscal saving than a cut operationalized as a reduction in the replacement ratio. Welfare analysis of revenue neutral tax and transfer reforms also favors a reduction in the entitlement period. TITEL: Start-Up Subsidies for the Unemployed Long-Term Evidence and Effect Heterogeneity JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 34 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 985 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058726 IKA: DIW2010 REPEC_JEL: J68, C14, H43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353402.de/dp985.pdf VERFASSERANGABEN: Marco Caliendo, Steffen Künn ALLPERS: - ABSTRACT: Turning unemployment into self-employment has become an increasingly important part of active labor market policies (ALMP) in many OECD countries. Germany is a good example where the spending on start-up subsidies for the unemployed accounted for nearly 17% of the total spending on ALMP in 2004. In contrast to other programs-like vocational training, job creation schemes, or wage subsidies-the empirical evidence on the effectiveness of such schemes is still scarce; especially regarding long-term effects and effect heterogeneity. This paper aims to close this gap. We use administrative and survey data from a large sample of participants in two distinct start-up programs and a control group of unemployed individuals. We find that over 80% of participants are integrated in the labor market and have relatively high labor income five years after start-up. Additionally, participants are much more satisfied with their current occupational situation compared to previous jobs. Based on conditional propensity score matching methods we estimate the long-term effects of the programs against non-participation. Our results show that both programs are effective with respect to income and employment outcomes in the long-run. Moreover, we consider effect heterogeneity with respect to several dimensions and show that start-up subsidies for the unemployed tend to be most effective for disadvantaged groups in the labor market. TITEL: Public Pensions, Changing Employment Patterns, and the Impact of Pension Reforms across Birth Cohorts A Microsimulation Analysis for Germany JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 45 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 984 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0059015 IKA: DIW2010||Staat REPEC_JEL: H55, J26, J11 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353964.de/dp984.pdf VERFASSERANGABEN: Johannes Geyer, Viktor Steiner ALLPERS: - ABSTRACT: We analyze the impact of changing employment patterns and pension reforms on the future level of public pensions across birth cohorts in Germany. The analysis is based on a rich dataset that combines household survey data from the German Socio-Economic Panel Study (SOEP) and process-produced microdata from the German pension insurance. A microsimulation model is developed which accounts for cohort effects in individual employment and unemployment and earnings over the lifecycle as well as the differential impact of recent pension reforms. Cohort effects for individuals born between 1937 and 1971 vary greatly by region, gender and education and strongly affect lifecycle wage profiles. The largest effects can be observed for younger cohorts in East Germany and for the low educated. Using simulated life cycle employment and income profiles, we project gross future pensions across cohorts taking into account changing demographics and recent pension reforms. Simulations show that pension levels for East German men and women will fall dramatically among younger birth cohorts, not only because of policy reforms but due to higher cumulated unemployment. For West German men, the small reduction of average pension levels among younger birth cohorts is mainly driven by the impact of pension reforms, while future pension levels of West German women are increasing or stable due to rising labor market participation of younger birth cohorts. TITEL: European Monetary Policy and the ECB Rotation Model Voting Power of the Core versus the Periphery JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 983 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058746 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: D72, D78, E58 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353447.de/dp983.pdf VERFASSERANGABEN: Ansgar Belke, Barbara von Schnurbein ALLPERS: - ABSTRACT: We analyze the ECB Governing Council's voting procedures. The literature has by now discussed numerous aspects of the rotation model but does not account for many institutional aspects of the voting procedure of the GC. Using the randomization scheme based on the multilinear extension (MLE) of games, we try to close three of these gaps. First, we integrate specific preferences of national central bank presidents, i.e. their desired interest rates. Second, we address the agenda-setting power of the ECB president. Third, we do not simulate an average of the decisions but look at every relevant point in time separately. TITEL: Is Euro Area Money Demand (Still) Stable? Cointegrated VAR versus Single Equation Techniques JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 40 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 982 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058666 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: C12, C22, C32, E41, E43, E58 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353224.de/dp982.pdf VERFASSERANGABEN: Ansgar Belke, Robert Czudaj ALLPERS: - ABSTRACT: In this paper we present an empirically stable euro area money demand model. Using a sample period until 2009:2 shows that the current financial and economic crisis that started in 2007 does not appear to have any noticeable impact on the stability of the euro area money demand function. We also compare single equation methods like the ARDL approach, FM-OLS, CCR and DOLS with the commonly used cointegrated Johansen VAR framework and show that the former are under certain circumstances more appropriate than the latter. What is more, they deliver results that are more in line with the economic theory. Hence, FMOLS, CCR and DOLS are useful in estimating standard money demand as well, although they have only been rarely applied for this purpose in previous studies. TITEL: Fractional Cointegration in US Term Spreads JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 8 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 981 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058656 IKA: DIW2010 REPEC_JEL: C22, E43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353194.de/dp981.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Luis A. Gil-Alana ALLPERS: - ABSTRACT: This note examines the stochastic properties of US term spreads with parametric and semi-parametric fractional integration techniques. Since the observed data (rather than the estimated residuals from a cointegrating regression) are used for the analysis, standard methods can be applied. The results indicate that US Treasury maturity rates are I(1) in most cases, although the order of integration decreases with maturity. Further, mean reversion occurs for the 5, 7 and 10 year rates as well as for several term spreads, suggesting that the expectation hypothesis of the term structure is satisfied empirically. TITEL: Information Sharing and Cross-border Entry in European Banking JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 32 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 980 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058646 IKA: DIW2010||IGW REPEC_JEL: F37, G21, G34, L13, O16 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.353135.de/dp980.pdf VERFASSERANGABEN: Caterina Giannetti, Nicola Jentzsch, Giancarlo Spagnolo ALLPERS: - ABSTRACT: Information asymmetries can severely limit cross-border border expansion of banks. When a bank enters a new market, it has incomplete information about potential new clients. Such asymmetries are reduced by credit registers, which distribute financial data on bank clients. We investigate the interaction of credit registers and bank entry modes (in form of branching and M&A) by using a new set of time series cross-section data for the EU-27 countries. We study how the presence of public and private credit registers and the type of information exchanged affect bank entry modes during the period 1990-2007. Our analysis shows that the existence of both types of registers increases the share of branching in the overall entries. Additionally, the establishment of public registers reduces concentration ratios, and some banking competition indicators (such as overhead costs/assets). The introduction of a private credit bureau, on the other hand, has no effect on concentration ratios, but positively contributes to competition (by decreasing interest rate margins). This suggests that credit registers facilitate direct entry through a reduction of information asymmetries, which in turn intensifies competition. TITEL: Locus of Control and Job Search Strategies JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 34 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 979 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058550 IKA: DIW2010 REPEC_JEL: J64 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347769.de/dp979.pdf VERFASSERANGABEN: Marco Caliendo, Deborah Cobb-Clark, Arne Uhlendorff ALLPERS: - ABSTRACT: Standard job search theory assumes that unemployed individuals have perfect information about the effect of their search effort on the job offer arrival rate. In this paper, we present an alternative model which assumes instead that each individual has a subjective belief about the impact of his or her search effort on the rate at which job offers arrive. These beliefs depend in part on an individual's locus of control, i.e., the extent to which a person believes that future outcomes are determined by his or her own actions as opposed to external factors. We estimate the impact of locus of control on job search behavior using a novel panel data set of newly-unemployed individuals in Germany. Consistent with our theoretical predictions, we find evidence that individuals with an internal locus of control search more and that individuals who believe that their future outcomes are determined by external factors have lower reservation wages. TITEL: Unemployment and Portfolio Choice Does Persistence Matter? JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 25 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 978 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058551 IKA: DIW2010||Konjunktur REPEC_JEL: D91, E21, H31 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347770.de/dp978.pdf VERFASSERANGABEN: Vladimir Kuzin, Franziska Bremus ALLPERS: - ABSTRACT: We use a life cycle model of consumption and portfolio choice to study the effects of social security on the investment decisions of households for the European case. Our model is mainly based on the one developed by Cocco, Gomes, and Maenhout (2005). We extend it by unemployment risk using Markov chains to model the transition between different employment states. In contrast to most models in the life cycle literature, our model allows for three different states, namely employment, short-term as well as long-term unemployment. This allows us to examine the effects of persistence in the unemployment process on portfolio choice. Our main findings are, first, that in case of short-term unemployment only, social security systems as those established in the EU are able to offset the negative impact of unemployment risk on the portfolio-share invested in risky assets. Second, the simulation results reveal that when allowing for long-term unemployment the equity-share is suppressed, especially for young investors. We show that this negative effect of unemployment is mainly driven by its persistence. TITEL: Price Formation on the EuroMTS Platform JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 12 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 977 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058459 IKA: DIW2010 REPEC_JEL: C32, G10 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347265.de/dp977.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Alessandro Girardi ALLPERS: - ABSTRACT: This paper examines the process of price discovery in the MTS system, which builds on the parallel quoting of euro-denominated government securities on a number of (relatively large) domestic markets and on a (relatively small) European marketplace (EuroMTS). Using twenty-seven months of daily data for 107 pairs of bonds, we present unambiguous evidence that trades on EuroMTS have a sizeable informational content. TITEL: Structuring International Financial Support for Climate Change Mitigation in Developing Countries JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 39 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 976 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058499 IKA: DIW2010||CPI REPEC_JEL: F30, G20, R38 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347626.de/dp976.pdf VERFASSERANGABEN: Karsten Neuhoff, Sam Fankhauser, Emmanuel Guerin, Jean Charles Hourcade, Helen Jackson, Ranjita Rajan, John Ward ALLPERS: - ABSTRACT: In the Copenhagen Accord of December 2009, developed countries agreed to provide start-up finance for adaptation in developing countries and expressed the ambition to scale this up to $100 billion per year by 2020. The financial mechanisms to deliver this support have to be tailored to country and sector specific needs so as to enable domestic policy processes and self sustaining business models, and to limit policy risk exposure for investors while complying with budgetary constraints in OECD countries. This paper structures the available financial mechanisms according to the needs they can address, and reports on experience with their application in bilateral and multilateral settings. TITEL: Long Memory and Volatility Dynamics in the US Dollar Exchange Rate JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 37 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 975 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058444 IKA: DIW2010 REPEC_JEL: C22, O40 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347170.de/dp975.pdf VERFASSERANGABEN: Guglielmo Maria Caporale, Luis A. Gil-Alana ALLPERS: - ABSTRACT: This paper focuses on nominal exchange rates, specifically the US dollar rate vis-à-vis the Euro and the Japanese Yen at a daily frequency. We model both absolute values of returns and squared returns using long-memory techniques, being particularly interested in volatility modelling and forecasting given their importance for FOREX dealers. Compared with previous studies using a standard fractional integration framework such as Granger and Ding (1996), we estimate a more general model which allows for dependence not only at the zero but also at other frequencies. The results show differences in the behaviour of the two series: a long-memory cyclical model and a standard I(d) model seem to be the most appropriate for the US dollar rate vis-à-vis the Euro and the Japanese Yen respectively. TITEL: Interrelationships among Locus of Control and Years in Management and Unemployment Differences by Gender JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 35 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 974 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058589 IKA: DIW2010||LDM REPEC_JEL: J01, J24, J60, M51 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.350642.de/dp974.pdf VERFASSERANGABEN: Eileen Trzcinski, Elke Holst ALLPERS: - ABSTRACT: This paper focuses on gender differences in the role played by locus of control within a model that predicts outcomes for men and women at two opposite poles of the labour market: high level managerial / leadership positions and unemployment. Based on data from the German Socio-Economic Panel, we investigated the extent to which gender differences occur in the processes by which highly positive and negative labour market outcomes are determined and in the processes underlying the development of one particular aspect of personality, that is, locus of control. Overall gender differences were more pronounced in the results for years in managerial/ leadership positions than for locus of control. Negative labour market states were also marked by gender differences, but not to the same degree observed for positive states. TITEL: Global Liquidity, World Savings Glut and Global Policy Coordination JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 19 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 973 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058448 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: E21, E43, E52, F32, F42, Q43 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347198.de/dp973.pdf VERFASSERANGABEN: Ansgar Belke, Daniel Gros ALLPERS: - ABSTRACT: The global imbalances of the 2000s and the recent global financial crisis are intimately connected. Both originate in the combination of economic policies adopted by the two key economies, the US and China. Global financial markets served as a transmission belt, both during the boom as during the bust. In the US, the interaction among the Fed's monetary stance, global real interest rates, distorted incentives in credit markets, and financial innovation created the mix of conditions which first drove growth, but then made the US the epicenter of the global financial crisis. Exchange rate and other economic policies followed by emerging markets such as China and the oil-exporting countries contributed to the US ability to borrow cheaply abroad and thereby finance its unsustainable housing bubble during the upswing. But we find that the key drivers of asset prices are global liquidity conditions. Central banks flooded the markets with ample liquidity. Mopping up this excess liquidity will be one major task for central banks worldwide, which needs to be done in a coordinated fashion. Moreover, our analysis has shown that liquidity will first show up in asset price inflation and only later in consumer goods inflation. This renders it difficult for central bank to exit from their current very expansive monetary policy stance if they continue to focus only on price stability. TITEL: (How) Do the ECB and the Fed React to Financial Market Uncertainty? The Taylor Rule in Times of Crisis JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 29 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 972 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058421 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: E43, E52, E58 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347128.de/dp972.pdf VERFASSERANGABEN: Ansgar Belke, Jens Klose ALLPERS: - ABSTRACT: We assess differences that emerge in Taylor rule estimations for the Fed and the ECB before and after the start of the subprime crisis. For this purpose, we apply an explicit estimate of the equilibrium real interest rate and of potential output in order to account for variations within these variables over time. We argue that measures of money and credit growth, interest rate spreads and asset price inflation should be added to the classical Taylor rule because these variables are proxies of a change in the equilibrium interest rate and are, thus, also ikely to have played a major role in setting policy rates during the crisis. Our empirical results gained from a state-space model and GMM estimations reveal that, as far as the Fed is concerned, the impact of consumer price inflation, and money and credit growth turns negative during the crisis while the sign of the asset price inflation coefficient turns positive. Thus we are able to establish significant differences in the parameters of the reaction functions of the Fed before and after the start of the subprime crisis. In case of the ECB, there is no evidence of a change in signs. Instead, the positive reaction to credit growth, consumer and house price inflation becomes even stronger than before. Moreover we find evidence of a less inertial policy of both the Fed and the ECB during the crisis. TITEL: Monetary Policy, Global Liquidity and Commodity Price Dynamics JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 26 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 971 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058446 IKA: DIW2010 SPRACHE: Englisch REPEC_JEL: E31, E52, C32, F42 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347195.de/dp971.pdf VERFASSERANGABEN: Ansgar Belke, Ingo G. Bordon, Torben W. Hendricks ALLPERS: - ABSTRACT: This paper examines the interactions between money, interest rates, goods and commodity prices at a global level. For this purpose, we aggregate data for major OECD countries and follow the Johansen/Juselius cointegrated VAR approach. Our empirical model supports the view that, when controlling for interest rate changes and thus different monetary policy stances, money (defined as a global liquidity aggregate) is still a key factor to determine the long-run homogeneity of commodity prices and goods prices movements. The cointegrated VAR model fits with the data for the analysed period from the 1970s until 2008 very well. Our empirical results appear to be overall robust since they pass inter alia a series of recursive tests and are stable for varying compositions of the commodity indices. The empirical evidence is in line with theoretical considerations. The inclusion of commodity prices helps to identify a significant monetary transmission process from global liquidity to other macro variables such as goods prices. We find further support of the conjecture that monetary aggregates convey useful information about variables such as commodity prices which matter for aggregate demand and thus inflation. Given this clear empirical pattern it appears justified to argue that global liquidity merits attention in the same way as the worldwide level of interest rates received in the recent debate about the world savings and liquidity glut as one of the main drivers of the current financial crisis, if not possibly more. TITEL: Assessing the Real-Time Informational Content of Macroeconomic Data Releases for Now-/Forecasting GDP Evidence for Switzerland JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 36 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 970 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058420 IKA: DIW2010||Konjunktur REPEC_JEL: C53, E37 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.347126.de/dp970.pdf VERFASSERANGABEN: Boriss Siliverstovs, Konstantin A. Kholodilin ALLPERS: - ABSTRACT: This study utilizes the dynamic factor model of Giannone et al. (2008) in order to make now-/forecasts of GDP quarter-on-quarter growth rates in Switzerland. It also assesses the informational content of macroeconomic data releases for forecasting of the Swiss GDP. We find that the factor model offers a substantial improvement in forecast accuracy of GDP growth rates compared to a benchmark naive constant-growth model at all forecast horizons and at all data vintages. The largest forecast accuracy is achieved when GDP nowcasts for an actual quarter are made about three months ahead of the official data release. We also document that both business tendency surveys as well as stock market indices possess the largest informational content for GDP forecasting although their ranking depends on the underlying transformation of monthly indicators from which the common factors are extracted. TITEL: Beliefs and Actions in the Trust Game Creating Instrumental Variables to Estimate the Causal Effect JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 42 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 969 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058208 IKA: DIW2010||Vorstand REPEC_JEL: C72, C81, C91, D84 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.346460.de/dp969.pdf VERFASSERANGABEN: Miguel A. Costa-Gomes, Steffen Huck, Georg Weizsäcker ALLPERS: - ABSTRACT: In many economic contexts, an elusive variable of interest is the agent's expectation about relevant events, e.g. about other agents' behavior. Recent experimental studies as well as surveys have asked participants to state their beliefs explicitly, but little is known about the causal relation between beliefs and other behavioral variables. This paper discusses the possibility of creating exogenous instrumental variables for belief statements, by shifting the probabilities of the relevant events. We conduct trust game experiments where the amount sent back by the second player (trustee) is exogenously varied by a random process, in a way that informs only the first player (trustor) about the realized variation. The procedure allows detecting causal links from beliefs to actions under plausible assumptions. The IV estimates indicate a significant causal effect, comparable to the connection between beliefs and actions that is suggested by OLS analyses. TITEL: Quality Distortions in Vertical Relations JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 26 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 968 SYST: Sb 89 Diskuss. MEDIENGRP: WP MEDIENNR: 0058171 IKA: DIW2010||IGW REPEC_JEL: D82, L14, L15 DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.346396.de/dp968.pdf VERFASSERANGABEN: Pio Baake, Vanessa von Schlippenbach ALLPERS: - ABSTRACT: This paper examines how delivery tariffs and private quality standards are determined in vertical relations that are subject to asymmetric information. We consider an infinitely repeated game where an upstream firm sells a product to a downstream firm. In each period, the firms negotiate a delivery contract comprising the quality of the good as well as a non-linear tariff. Assuming asymmetric information about the actual quality of the product and focusing on incentive compatible contracts, we show that delivery contracts are more efficient the lower the firms' outside options, i.e. the higher their mutual dependency. Buyer power driven by a reduced outside option of the upstream firm enhances the efficiency of vertical relations, while buyer power due to an improved outside option of the downstream firm implies less efficient outcomes. TITEL: Pricing Natural Gas in Mexico: An Application of the Little Mirrlees Rule The Case of Quasi-Rents JAHR: 2010 ORT: Berlin VERL: DIW Berlin UMF: 8 S. GT: Diskussionspapiere / Deutsches Institut für Wirtschaftsforschung GT_BAND: 1027 SYST: Sb 89 Diskuss. MEDIENNR: 0060017 IKA: DIW2010 SPRACHE: Englisch DOKUMENT: http://www.diw.de/documents/publikationen/73/diw_01.c.357977.de/dp1024.pdf VERFASSERANGABEN: Dagobert L. Brito, Juan Rosellón ALLPERS: -