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DIW Discussion Papers 1661 / 2017
Euro area countries and Japan are confronted with similar challenges. Potential output is on a falling trend in the euro area, and the decrease started well before the financial crisis. In Japan, low output growth is a striking feature since many years, despite the unconventional monetary policy stance and massive fiscal stimulus programs provided by the government. According to a growth accounting ...
2017| Christian Dreger
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DIW Discussion Papers 1660 / 2017
Faster urbanization plays a key role in the Chinese economic transformation. However, at the Lewis turning point, the hukou institution constitutes a serious risk to the process, as it restricts the access of migrants to public services offered by cities. To attract further migration, firms started to accept a premium on top of the wage. Thus, the social discrimination introduced by the hukou system ...
2017| Christian Dreger, Yanqun Zhang
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DIW Discussion Papers 1654 / 2017
We examine whether monetary transmission during the financial and sovereign debt crisis was dominated by the cost channel or by the demand-side channel effect. We use two approaches to track down the potential passthrough of changes in the monetary policy rate to those in consumer prices. First, we utilize panel data from the German manufacturing industry. Second, we conduct time series analyses for ...
2017| Dorothea Schäfer, Andreas Stephan, Khanh Trung Hoang
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DIW Discussion Papers 1650 / 2017
This paper investigates how the withdrawal of banks from their cross-border business impacted the borrowing costs of European firms since the crisis. We combine aggregate information on total and cross-border credit with firm-level survey data for the period 2010 - 2014. We find that the decline in cross-border lending led to a deterioration in the borrowing conditions of small firms. In countries ...
2017| Franziska Bremus, Katja Neugebauer
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DIW Discussion Papers 1649 / 2017
Despite rather skeptical attitude of the economists toward the state intervention in the housing markets, the policy makers and general public typically are supporting it. As a result, in many European countries, since World War I the rent and eviction controls as well as social housing policies remain an important element of the government economic policies. Nevertheless, the macroeconomic effects ...
2017| Konstantin A. Kholodilin, Julien Licheron
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DIW Discussion Papers 1646 / 2017
This paper studies the effects of financial speculation on commodity futures returns, using publicly available data from the US Commodity Futures Trading Commission, aggregated by trader groups. We exploit the heteroskedasticity in the weekly data to identify exogenous variation in speculators’ positions. The results suggest that idiosyncratic net long demand shocks of both index investors and hedge ...
2017| Michael Hachula, Malte Rieth
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DIW Discussion Papers 1636 / 2017
This paper investigates the link between mortgage supply shocks at the banklevel and regional house price growth in the U.S. using micro-level data on mortgage markets from the Home Mortgage Disclosure Act for the 1990-2014 period. Our results suggest that bank-specific mortgage supply shocks indeed affect house price growth at the regional level. The larger the idiosyncratic shocks to newly issued ...
2017| Franziska Bremus, Thomas Krause, Felix Noth
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DIW Discussion Papers 1633 / 2017
Using panel data of 17 OECD countries for 1980-2011, we find that the distributional consequences of fiscal consolidations depend significantly on the level of private indebtedness. Austerity leads to a strong and persistent increase in income inequality during periods of private debt overhang. In contrast, there are no discernible distributional effects when private debt is low. This result is robust ...
2017| Mathias Klein, Roland Winkler
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DIW Discussion Papers 1631 / 2016
Empirical studies support the hysteresis hypothesis that recessions have a permanent effect on the level of output. We analyze the implications of hysteresis for fiscal policy in a DSGE model. We assume a simple learning-by-doing mechanism where demand-driven changes in employment can affect the level of productivity permanently, leading to hysteresis in output. We show that the fiscal output multiplier ...
2016| Philipp Engler, Juha Tervala
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DIW Discussion Papers 1626 / 2016
We analyze the positive and normative effects of a progressive tax on wages in a nonlinear New Keynesian DSGE model in the presence of demand and technology shocks. The non-linearity allows us to disentangle the effects of the progressive tax on the volatility and the level of macroeconomic variables, for both intertemporally optimizing (“Ricardian") and non-Ricardian (“rule-of-thumb") households. ...
2016| Philipp Engler, Wolfgang Strehl