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DIW Discussion Papers 1877 / 2020
This paper uses a panel of German individuals and highly granular pollution data to test if air pollution affects adults’ well-being indirectly through the health of their children. Results show that ozone decreases the well-being of individuals with children while not affecting persons without kids. We confirm the same effect for fine particulate matter and sulfur dioxide. Concerning the mechanism, ...
2020| Julia Rechlitz, Luis Sarmiento, Aleksandar Zaklan
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DIW Discussion Papers 1876 / 2020
In proxy vector autoregressive models, the structural shocks of interest are identified by an instrument. Although heteroskedasticity is occasionally allowed for, it is typically taken for granted that the impact effects of the structural shocks are time-invariant despite the change in their variances. We develop a test for this implicit assumption and present evidence that the assumption of time-invariant ...
2020| Helmut Lütkepohl, Thore Schlaak
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DIW Discussion Papers 1875 / 2020
We examine whether a disclosure mandate for greenhouse gas emissions creates stakeholder pressure for firms to subsequently reduce their emissions. For UK-incorporated listed firms such a mandate was adopted in 2013. Using a difference-in-differences design, we find that firms affected by the mandate reduced their emissions – depending on the specification – by an incremental 14-18% relative to a control ...
2020| Benedikt Downar, Jürgen Ernstberger, Stefan Reichelstein, Sebastian Schwenen, Aleksandar Zaklan
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DIW Discussion Papers 1874 / 2020
A two-sector incomplete markets model with heterogeneous agents can be used to study the distributional effects of the COVID-19 lockdown. While negative aggregate welfare effects of the lockdown are unavoidable, the size of aggregate welfare effects as well as the distribution of the welfare effects across agents turn out to depend on the specific economic environment of the affected economy as well ...
2020| Marius Clemens, Maik Heinemann
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DIW Discussion Papers 1873 / 2020
Recent proposals for a still missing European deposit insurance scheme (EDIS) argue in favor of a reinsurance framework. In this paper, we use a regime-switching open-economy DSGE model with bank default to assess the relative efficiency of such a scheme. We find that reinsurance by EDIS is more effective in stabilizing real activity, credit, and welfare than a national fiscal backstop. We demonstrate ...
2020| Marius Clemens, Stefan Gebauer, Tobias König
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DIW Discussion Papers 1872 / 2020
We reexamine whether pre-Volcker U.S. fiscal policy was active or passive. To do so, we estimate a DSGE model with monetary and fiscal policy interactions employing a sequential Monte Carlo algorithm (SMC) for posterior evaluation. Unlike existing studies, we do not have to treat each policy regime as distinct, separately estimated, models. Rather, SMC enables us to estimate the DSGE model over its entire ...
2020| Stephanie Ettmeier, Alexander Kriwoluzky
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DIW Discussion Papers 1871 / 2020
In conventional structural vector autoregressive (VAR) models it is assumed that there are at most as many structural shocks as there are variables in the model. It is pointed out that heteroskedasticity can be used to identify more shocks than variables. However, even if there is heteroskedasticity, the number of shocks that can be identified is limited. A number of results are provided that allow ...
2020| Helmut Lütkepohl
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DIW Discussion Papers 1870 / 2020
Policymakers have implemented a wide range of non-pharmaceutical interventions to fight the spread of COVID-19. Variation in policies across jurisdictions and over time strongly suggests a difference-in-differences (DD) research design to estimate causal effects of counter-COVID measures. We discuss threats to the validity of these DD designs and make recommendations about how researchers can avoid ...
2020| Andrew Goodman-Bacon, Jan Marcus
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DIW Discussion Papers 1869 / 2020
This paper analyzes the causal relationship between institutional diversity in domestic banking sectors and bank stability. We use a large bank- and country-level unbalanced panel data set covering the EU member states’ banking sectors between 1998 and 2014. Constructing two distinct indicators for measuring institutional diversity, we find that a high degree of institutional diversity in the domestic ...
2020| Christopher F. Baum, Caterina Forti Grazzini, Dorothea Schäfer
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DIW Discussion Papers 1868 / 2020
Understanding the causes of the slowdown in aggregate productivity growth is key to maintaining the competitiveness of advanced economies and ensuring long-term economic prosperity. This paper is the first to provide evidence that investment in Knowledge-Based Capital (KBC), despite having a positive effect on productivity at the micro level, is a driver of the weak productivity performance at the ...
2020| Marie Le Mouel, Alexander Schiersch
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DIW Discussion Papers 1867 / 2020
Several countries and regions have introduced mandatory minimum distances of wind turbines to nearby residential areas, in order to increase public acceptance of wind power. Germany’s largest federal state Bavaria introduced such separation distances of ten times the height of new wind turbines in 2014. Here, we provide a novel monthly district-level dataset of construction permits for wind turbines ...
2020| Jan Stede, Nils May
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DIW Discussion Papers 1866 / 2020
The use of futures exchange contracts instead of forwards completes the maturity spectrum of the correlation between the spot yield and the premium. We find that the forward premium puzzle (FFP) depends significantly on the maturity horizon of the futures contract and the choice of sampling period. The FFP appears to be a pre-crisis phenomenon and is only observed for maturities longer than about one ...
2020| Kerstin Bernoth, Jürgen von Hagen, Casper G. de Vries
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DIW Discussion Papers 1865 / 2020
Wir führen hochfrequente Befragungen der in Deutschland lebenden Personen durch und erheben die Erwartungen zur Dauer der Covid-bedingten Beschränkungen des öffentlichen Lebens. In einer ersten Analyse der Daten finden wir Hinweise, dass zwei in den Erhebungszeitraum fallenden öffentlichen Auftritte von Bundeskanzlerin Angela Merkel die Erwartungen stark beeinflussen. Insbesondere messen wir nach Merkels ...
2020| Peter Haan, Andreas Peichl, Annekatrin Schrenker, Georg Weizsäcker, Joachim Winter
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DIW Discussion Papers 1864 / 2020
We study the rapidly growing literature on the causal effects of financial education programs in a meta-analysis of 76 randomized experiments with a total sample size of over 160,000 individuals. The evidence shows that financial education programs have, on average, positive causal treatment effects on financial knowledge and downstream financial behaviors. Treatment effects are economically meaningful ...
2020| Tim Kaiser, Annamaria Lusardi, Lukas Menkhoff, Carly Urban
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DIW Discussion Papers 1863 / 2020
This paper studies costly political resistance in a non-democracy. When Nazi Germany surrendered in May 1945, 40% of the designated Soviet occupation zone was initially captured by the western Allied Expeditionary Force. This occupation was short-lived: Soviet forces took over after less than two months and installed an authoritarian regime in what became the German Democratic Republic (GDR). We exploit ...
2020| Luis R. Martinez, Jonas Jessen, Guo Xu
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DIW Discussion Papers 1862 / 2020
This paper investigates the effect of reforms of insolvency regulations on cross-border debt and equity investments at a sectoral level. Using disaggregated data from the Securities Holdings Statistics by Sector (SHSS) and OECD-indicators on the efficiency of insolvency regulations, we find that investors prefer to invest more in countries with more efficient insolvency frameworks. The effect, however, ...
2020| Tatsiana Kliatskova, Loïc Baptiste Savatier
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DIW Discussion Papers 1861 / 2020
We construct a news-based viral disease index and study the dynamic impact of epidemics on the world economy, using structural vector autoregressions. Epidemic shocks have persistently negative effects, both directly and indirectly, on affected countries and on world output. The shocks lead to a significant fall in global trade, employment, and consumer prices for three quarters, and the losses are ...
2020| Konstantin A. Kholodilin, Malte Rieth
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DIW Discussion Papers 1860 / 2020
I study the effects of labor market outcomes on firms' loan demand and credit intermediation. I first show in partial equilibrium that the presence of frictions in the banking sector lowers the capital factor demand elasticity to changes in real wages. This finding helps to connect the substitutability of labor and capital with credit conditions. Second, I use a new Keynesian banking model with an ...
2020| Tobias König
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DIW Discussion Papers 1859 / 2020
Carbon pricing decisions by governments are prone to time-inconsistency, which causes the private sector to underinvest in emission-reducing technologies. We show that incentives for decarbonization can be improved if complementing carbon pricing with carbon contracts for differences, where the government commits to pay a fixed carbon price level to the investors. We derive conditions under which the ...
2020| Olga Chiappinelli, Karsten Neuhoff
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DIW Discussion Papers 1858 / 2020
There is a well-known gender difference in time allocation within the household, which has important implications for gender differences in labor market outcomes. We ask how malleable this gender difference in time allocation is to culture. In particular, we ask if US immigrants allocate tasks differently depending upon the characteristics of the source countries from which they emigrated. Using ...
2020| Francine D. Blau, Lawrence M. Kahn, Matthew Comey, Amanda Eng, Pamela Meyerhofer, Alexander Willén