Vorträge des DIW Berlin

A Theory of Sovereign Risk Premia and Financial Intermediation in the Euro Area

The European sovereign debt crisis has highlighted the role of spillovers from sovereign default risk to financial intermediation in shaping macroeconomic dynamics. We propose a quantitative model which captures this feedback mechanism by allowing for explicit default on public debt and occasionally binding collateral constraints on the interbank market in a general equilibrium setting. A link to...

Responsive Feed-in Tariff Adjustment to Dynamic Technology Development

This paper reviews the adjustments of the feed-in tariff for new solar photovoltaics (PV) installations in Germany. As PV system prices have declined rapidly since 2009, the German government implemented automatic mechanisms to adjust the support level for new installations in response to deployment volumes. This paper develops an analytic model to simulate weekly installations of PV systems up to...

Estimating Crowding Costs in Public Transport

Preferences for transport activities are often considered only in terms of time and money. Whilst congestion in automobile traffic increases costs by raising trip durations, the same is less obvious in public transport (PT), especially rail-based. This has lead many economic analyses to conclude that there exists a free lunch by reducing the attractiveness of automobile transport (most efficiently...

Health-Related Life Cycle Risks and Public Insurance

This paper proposes a dynamic life cycle model of health risks, labor market participation, early retirement, and wealth accumulation to analyze the health-related risks of consumption and old age poverty. In particular, the model includes a health process, the interaction between health and employment risks, and an explicit modeling of the German public insurance schemes. I rely on a dynamic...

The 'Celtic Case': Guarantees, Transparency and Dual Debt Crises

Bank liability guarantee schemes have traditionally been viewed as costless measures to shore up investor confidence and stave off bank runs. However, as the experience of some European countries, most notably Ireland, has demonstrated, the credibility and effectiveness of these guarantees is crucially intertwined with the sovereign's funding risks. Employing methods from the literature on global...

Trade and the Environment: The Role of Firm Heterogeneity

This paper derives a new effect of trade liberalisation on the quality of the environment. We show that in the presence of heterogeneous firms the aggregate volume of emissions is influenced by a reallocation effect resulting from an increase in the relative size of more productive firms. The relative importance of this reallocation effect and the scale effect well known from the literature, and...

The Role of CO2-EOR for the Development of a CCTS Infrastructure in the North Sea Region: A Techno-Economic Model and Application

Scenarios of future energy systems attribute an important role to Carbon Capture, Transport, and Storage (CCTS) in achieving emission reductions. Using captured CO2 for enhanced oil recovery (CO2-EOR) can improve the economics of the technology. This paper examines the potential for CO2-EOR in the North Sea region. UK oil fields are found to account for 47% of the estimated total additional...

The Incidence of Social Security Contributions: Evidence from German Administrative Data

This paper applies a test for the incidence of social security contributions based on the reaction of gross wages in response to a variation in social security contributions. Exploiting an increase of the East German taxable maximum of health insurance, a difference-in-differences approach is used to estimate its effects on yearly changes in gross wages. It is shown that employees earning somewhat...

Day Care Quality and Differences in Children's Health and Personality Characteristics

Day care attendance is an early investment in children¿s human capital accumulation. Yet studies examining the effect of day care participation on later outcomes such as secondary schooling or non-cognitive skills identify mixed results. In the economic literature day care attendance has positive and negative effects on educational outcomes. These contradictive results might be due to unobserved...

Armed Conflict, Sex Ratio and Marital Outcomes: Evidence from Rwanda

We use armed conflict in Rwanda as a natural experiment to study the impact of a decrease in the sex ratio on the marriage market. Combining detailed information on conflict intensity with pre- and post-war individual-level data, we find several effects of the shortage of middle-aged men in the marriage market. First, fewer men remained single in the post-war period, while more middle-aged women...

Heterogeneity in Tax-Motivated Profit Shifting and Its Effects on Corporate Investment

This study provides evidence on the causal impact of debt shifting activities of multinational companies on capital accumulation. My identification strategy exploits the corporate tax reform 2008 in Germany as a quasi-natural experiment. This reform reduced the corporate income tax rate by 10 percentage points. Depending on the location of the parent company, the reform abolished the tax incentive...

The Effects of Disintegrated Distribution

Wo(men) at Work? The Impact of Cohabiting and Married Partners' Earnings on Women's Work Hours

This study investigates the determinants of women¿s labor supply in the household context. The main focus is on the effect of a change in male partner¿s wages on women¿s work hours. This is linked to the broader question of whether married and cohabiting women make different economic decisions and respond differently to changes in their partners¿ wages. In addition, this study seeks to connect the...

Choice Behavior in an Optimal Stopping Task

In this paper we examine behavior in an optimal stopping task. We derive novel theoretical predictions under different theories of dynamic behavior and then examine their empirical validity in the laboratory. We show that the well-known result that the optimal strategy for risk-neutral agents is a path-independent cut-off strategy can be generalized to the entire class of expected utility (EU)...

Information Sharing in Competitive Insurance Markets

We rationalize a special type of sharing information which can typically be found in markets for occupational disability insurances. There, firms share information about acceptances and rejections of an applicant. We set up a multiple-step signalling model with uninformed agents and endogenize competing principals' decisions to acquire information on risk types. We formalize the idea that...

Voters Prefer More Qualified Mayors, But Does It Matter for Public Finances? Evidence for Germany

Heterogeneity in Tax-Motivated Profit Shifting and Its Effects on Corporate Investment

European Electricity Grid Infrastructure Expansion in a 2050 Context

Merchant and Regulated Transmission Investment: The Case of the Baltic Sea Region

Combining Feed-in Tariffs and Tenders to Support Renewable Electricity