THE DYNAMICS OF REAL EXCHANGE RATES: A RECONSIDERATION

In this paper we offer a bootstrap‐based version of the Cox specification test for non‐nested hypothesis to discriminate between ESTAR and MSAR models. Both models are commonly used for modeling real exchange rates dynamics. We show that the test has good size and power properties in finite samples. In an application, we analyze several major real exchange rates to shed light on the question of which model describes these processes best. This allows us to draw conclusions about the driving forces of real exchange rates. Copyright © 2013 John Wiley & Sons, Ltd.     

An experimental analysis of tax avoidance policies

Policies to reduce aggressive tax avoidance are increasingly being implemented or discussed in many countries around the world. Tax authorities hope that such policies will generate new tax revenue by increasing overall tax compliance. We present an experimental design to investigate the effect of a stylized anti-avoidance tax policy on tax compliance behavior. We highlight that anti-avoidance tax policies that reduce tax avoidance can also induce an increase in tax evasion (“substitution effect”), which limits the additional tax revenue these policies will generate. We show that the degree of substitution depends crucially on behavioral factors such as tax morale. Policymakers therefore also need to consider behavioral features while designing such policies and estimating their potential effects.     

Knowledge Spillovers,Competition and Innovation Success

We study the relationship between a patent-based measure of knowledge spillovers that calculates technological proximity based on technologically relevant firms and innovation success. We find – for a representative sample of Swiss firms – that knowledge spillovers have a positive and significant association with the commercial success of innovative products. The paper shows the importance of market conditions for the relationship of spillovers with innovation performance: It is only positive and significant in markets with a medium number of competitors in the main product market, but not in monopolistic or polypolistic market structures.     

Measuring the effectiveness of US monetary policy during the COVID-19 recession

The COVID-19 recession that started in March 2020 led to an unprecedented decline in economic activity across the globe. To fight this recession, policy makers in central banks engaged in expansionary monetary policy. This paper asks whether the measures adopted by the US Federal Reserve (Fed) have been effective in boosting real activity and calming financial markets. To measure these effects at high frequencies, we propose a novel mixed frequency vector autoregressive (MF-VAR) model. This model allows us to combine weekly and monthly information within a unified framework. Our model combines a set of macroeconomic aggregates such as industrial production, unemployment rates, and inflation with high-frequency information from financial markets such as stock prices, interest rate spreads, and weekly information on the Fed's balance sheet size. The latter set of high-frequency time series is used to dynamically interpolate the monthly time series to obtain weekly macroeconomic measures. We use this setup to simulate counterfactuals in absence of monetary stimulus. The results show that the monetary expansion caused higher output growth and stock market returns, more favorable long-term financing conditions and a depreciation of the US dollar compared with a no-policy benchmark scenario.     

Wird die Konjunkturkomponente der Schuldenbremse ihrer Aufgabe noch gerecht?

Wirtschaftsdienst - In der Debatte um die Schuldenbremse geht es zumeist um eine Grundgesetzänderung. Dabei ist ein wesentlicher Teil der Schuldenbremse — die Konjunkturkomponente,...     

Inflationsziel und Inflationsmessung in der Eurozone im Wandel

Wirtschaftsdienst - Viele Menschen im Euroraum haben zunehmend das Gefühl, dass der allgemeine Kaufkraftverlust des Geldes sehr viel höher ist als die offiziell gemessenen...     

Richard H. Thaler — Wirtschaftsnobelpreisträger 2017

Richard H. Thaler was awarded this year’s Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel “for his contributions to behavioural economics”. He studied systematic departures of human behaviour from the standard “homo oeconomicus” assumption. His famous work on boundedly rational behaviour considers both cognitive limitations and limited self-control. The cognitive limitations he studied are in particular the endowment effect, i.e. the observation that individuals assign a higher value to an object if they possess it, and mental accounting, a collection of theories regarding how individuals think about money. Furthermore, he provided path-breaking evidence on the nature of social preferences, which laid the groundwork for the development of several widely used economic theories incorporating altruism, fairness and reciprocity.     

Organisational consequences of asymmetries in task dependence: the moderating role of HR practices

This study integrates recent advances in interdependence theory with the literature on commitment‐based HR practices. New research on interdependence theory suggests that differences, or asymmetries, in task dependence among organisational members can cause interests to diverge. Prior research has shown that this can negatively affect interpersonal relations, individual outcomes and team processes. However, these insights gained on the dyadic, individual and team levels of analysis have not yet been explored at the organisational level and, until now, no research had yet connected these advances in interdependence theory to the field of HRM research. Hence, the current study investigates (a) whether asymmetries in task dependence do (or do not) matter at the organisational level and affect organisational effectiveness, (b) why this relationship may work by assessing a key mediator, namely, trust climate and (c) if and how these relationships can be altered by commitment‐based HR practices. Our moderated‐mediation model was tested and fully supported by a multi‐source data set of 8,390 employees from 67 organisations.     

Political Leaders' Socioeconomic Background and Public Budget Deficits: Evidence from OECD Countries

This paper empirically analyzes the relationship between political leaders' socioeconomic backgrounds and public budget deficits utilizing panel data on 21 OECD countries from 1980 to 2008. Building on sociological, as well as economic research, we argue that the socioeconomic status of political decision‐makers, i.e., presidents or prime ministers, is an important determinant of fiscal budget decisions. Our theory‐consistent findings show that the tenures of lower‐class leaders – i.e., leaders of low socioeconomic status – are associated with a deficit‐to‐GDP ratio which is 1.6 percentage points higher than that during tenures of upper‐class leaders.