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Why Are Big Banks Getting Bigger?

We analyze the increasing concentration of U.S. banking assets using nonparametric empirical methods that characterize dynamic power law distributions in terms of two shaping factors the asset reversion rates and idiosyncratic volatilities for different size-ranked banking institutions. We show that the greater concentration of bank-holding company (BHC) assets is caused by decreased mean...

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The Fehmarn Belt Duopoly - Can the Ferry Compete with a Tunnel?

The Fehmarn Belt is a strait between Denmark and Germany, currently served by a ferry. This note analyses the theory of competition between the ferry and a planned tunnel, the Fehmarn Belt Fixed Link. The model is an asymmetric duopoly and addresses two questions: 1. Will the tunnel induce the ferry to exit the market, once it operates? 2. Will the tunnel's toll revenue suffice to cover its cost? To ...

"Germany Economy Growing at Slightly Above-Average Rate": Eight Questions to Simon Junker

Mr. Junker, what kind of growth figures are you expecting for the German economy? The growth of the German economy will be slightly above average over the next few quarters. But this is also connected with special factors like higher consumption due to, among other things, the increasing number of refugees. The German economy is expected to grow by about 1.7 percent this year, and will be somewhat ...

Do Parties Matter? Estimating the Effect of Political Power in Multi-Party Systems

When there are more than two parties, policy outcomes are typically the result of a bargaining process. We investigate whether changes in political power for various parties have an effect on tax policies. We use an instrumental variable approach where close elections provide the exogenous variation in our variable of interest: voting power. In order to isolate close elections in a proportional election ...

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

This paper studies the importance of politicians’ qualification, in terms of education and experience, for fiscal outcomes. The analysis is based on a large panel for 2031 German municipalities for which we have collected information on municipal budgets as well as the election results and qualification levels of mayoral candidates. We principally use a regression discontinuity design focusing on close ...

Only Conservatives Are Voting in the Rain: Evidence from German Local and State Elections

In this note, we use data from different elections in the German state of North-Rhine Westphalia between 1975 and 2010 to show that the Conservatives profit from lower voter turnout at the expense of the Social Democrats. We deal with the endogeneity of voter turnout by using election day rain as an instrumental variable. Our particular contribution is the comparison of municipal and state electio ...

Developing an energy cost indicator for the industry sector (IECIX)

The energy cost burden is communicated as a major competitiveness concern especially by energy intensive industries. This project provides a transparent, up-to-date index of sector-specific industrial unit energy costs. We update official statistical data using information on energy use and fuel prices and provide a fuel-specific breakdown of overall unit energy costs for each manufacturing sector.

Two Steps Forward - One Step Back? Evaluating Contradicting Child Care Policies in Germany

We apply a structural model of mothers’ labor supply and child care choices to evaluate the effects of two child care reforms in Germany that were introduced simultaneously. A legal claim to subsidized child care became effective for children aged 1 year or older. Moreover, a new child care allowance (‘Betreuungsgeld’) came into effect. It is granted to families who do not use publicly subsidized child ...

Understanding Chinese Consumption: The Impact of Hukou

Since the onset of the economic reforms more than three decades ago, the Chinese growth miracle has been based on exports and investment. While strong output growth was maintained even during the financial crisis, imbalances within the country increased. To return to a more sustainable development path, recent government policies have aimed to improve the role of private consumption. This article argues ...