The global financial crisis: Lessons for European integration

The EU's limited fiscal capacity has proven to be the most critical constraint in responding to the global financial crisis in a coordinated manner. The EU does not have enough resources to rescue the troubled financial institutions and member states. This leads to a nationalization of rescue operations, which undermines the Single European Market and requires IMF involvement with respect to member states in distress. The EU must also complete the lacking elements of the Single European Market architecture (such as European financial supervision) and help in strengthening global policy and regulatory coordination.     

Global Capital Tax as a Tool to Reduce Tax Evasion

International Advances in Economic Research -     

The components of landline telephone survey coverage bias. The relative importance of no-phone and mobile-only populations

The continuously growing mobile-only population raises concerns regarding the representativeness of traditional landline telephone surveys. At this time, the mobile-only population differs significantly from general population, which leads to coverage bias when using fixed-line samples only for telephone surveys. However, in many European countries the mobile-only population is not the only source of coverage bias in telephone surveys. In addition, we have to consider coverage biases caused by considerable proportions of citizens without any telephone service. Since these two groups differ from the general population with respect to differential socio-demographic categories, in our view, the negative effects of mobile-only coverage error in traditional landline telephone surveys might in fact compensate—in part—for coverage bias caused by the no-phone population. To test this hypothesis of compensating coverage biases we calculated relative coverage biases caused by the mobile-only population and relative coverage biases caused by the no-phone population in 30 European countries for two socio-demographic variables in two points in time. Results are presented for four groups of countries that differ with respect to no-phone and mobile-only rates. Results suggest that—in general—mobile-only biases and no-phone biases do not compensate to a great extent, and thus the alarming mobile-only biases cannot be neglected when using telephone surveys in the estimation of population parameters. Nevertheless, there are several countries where the bias caused by the mobile-only population is far bigger than the joint bias caused by the mobile-only population and the no-phone population. This finding suggests that biases caused by the recent mobile-only population would be even more severe if the no-phone population did not exist.     

Making cross-border retail finance a reality case study: Deutsche Bank PBC S.A. in Poland

Until recently, the retail banking industry was widely recognised as being predominantly a local activity. Now retail banking is increasingly affected by globalisation. Cross-border activity offers opportunities for financial institutions to boost their sales through unified marketing and client acquisition techniques. Deutsche Bank quickly recognised the advantages of a regional versus a local approach to its retail activities in Europe. This paper outlines and discusses Deutsche Bank's cross-border activity in the Polish market. Poland, which joined the European Union in May 2004, is an interesting area of study. The case study presents the Deutsche Bank approach to retail banking in Poland. The case concludes that it is not the behaviour of the customer which is the most important obstacle to cross-border retail banking, but rather the legislative environment of the individual countries. With the harmonisation of European policies in this respect, these hurdles should be eliminated gradually.     

A note on Kaleckian lags in the Solow model

Building on a contribution by Paul Zak, we consider the modified Solow model with a time lag introduced in the Kaleckian spirit. This model produces endogenous cycles that can be interpreted as economic fluctuations. For reasonable parameter values it can generate empirically relevant cyclic variations in output. We prove the existence of a Hopf bifurcation and a limit cycle solution in the model. We find that there is only one solution with a period longer than the production lag. Additionally we calculate the period of this cycle.     

BOARD GOVERNANCE: DOES OWNERSHIP MATTER?

Good governance is crucial to achieving an organization's mission. Nevertheless, little is known about how the structure of governance is influenced by the nonprofit (NPO) or for‐profit ownership (FPO) structure of an organization, partly because they tend to be active in different sectors. In this paper we overcome this challenge by using data from a global sample of 392 microfinance institutions. The results show that the average NPO has a larger board, more female directors, and a higher number of board meetings than the average FPO. Moreover, where there are larger boards and more frequent board meetings, this has a positive effect on the financial performance of NPOs. It is thus confirmed that ownership structures influence boards’ characteristics and that some board mechanisms are more efficient in some ownership structures than in others. An effective board design should thus be based on a firm's ownership structure.     

Short term persistence in mutual fund market timing and stock selection abilities

Using daily return data from 448 actively managed mutual funds over a recent 9-year period, we look for persistence, over two consecutive quarters, in the ability of funds to select individual stocks and time the market. That is, we decompose overall fund performance into excess returns resulting from stock selection and timing abilities and we separately test for persistence in each ability. We find persistence in the ability to time the market only among well performing funds and in the ability to select stocks only among the very best and worst performers. The existing literature patterns appear only when funds are ranked by their overall performance, which includes stock selection, market timing and fees. With respect to overall performance, there is persistence among most poorly performing and only the top well performing funds. Furthermore, the profitability of a winner-picking strategy depends on the rebalancing frequency and potentially the size of the investment. Small investors cannot profit, whereas large investors can take advantage of the class-A share fee structure and realize positive abnormal returns by annually rebalancing their portfolios.     

Conflict-induced migration of composers: an individual-level study

Research on the causes of conflict-induced migration is hindered by the lack of adequately disaggregated data. The underlying study overcomes this problem through the use of historical data on 164 prominent classical composers born after 1800. I analyze the impact of war on the probability to emigrate of composers, investigate the associated dynamics and shed light on the choice of a destination country in times of war. I find that the incidence of inter-state wars increases composers’ probability to emigrate by around 7 % and the incidence of intra-state wars by roughly 19 %. The results imply that conflict impacts the migration intensity with a lag of approximately 1 year. Furthermore, the choice of a destination country is significantly affected by the incidence of war and less efficient from a career’s point of view during war. Finally, I find heterogeneous responses to war based on individual’s quality. While the better composers are more likely to emigrate in times of peace, it is not so anymore if a war breaks out. In times of war, all artists are affected by war and are prone to emigrate.     

The stiglitz-ellerman rejoinder: Our main criticisms remain unanswered

The rejoinder by the US economists Joseph Stiglitz and David Ellerman (S and E) is welcome above all as a clear acknowledgement that our interpretation of what we called the "Stiglitz Perspective" (but what we apparently should now call the "Stiglitz-Ellerman Perspective") is correct. However, S and E make a determined attempt to belittle the differences between their and our perspectives. This they do by emphasising broad agreement between us on the drawbacks of voucher privatization while largely ignoring our main criticisms: that they overlook the critical role of new non-state, mainly private, firms in successful transitions'; that they underplay the pre-transition causes of the transformational recession in the former Soviet Union (FSU) and Central Europe (CE); and that they chose China rather than Central European and Baltic countries, for the purpose of assessing reforms and performance in Russia and the Commonwealth of Independent States (CIS). S and E continue to argue as if the choice of methods for privatising state-owned enterprises (SOEs) has been crucial for the success or otherwise of transition - hence their singular preoccupation with privatisation to insiders. We wish to change the terms of this debate by drawing attention to the evidence which shows that what really matters are de novo firms and therefore the reforms and policies which foster their growth.     

The dissent voting behaviour of central bankers: what do we really know?

We examine the determinants of the dissent in central bank boards voting records about monetary policy rates in the Czech Republic, Hungary, Sweden, the UK and the US. In contrast to previous studies, we consider 25 different macroeconomic, financial, institutional, psychological or preference-related factors jointly and use Bayesian model averaging (BMA) to formally assess the attendant model uncertainty. We find that the rate of dissent is between 5% and 20% for the examined central banks. Our results suggest that most of the examined regressors, including factors that capture the effects of inflation and output, are not robust determinants of voting dissent. This result suggests that unobserved characteristics of central bankers and different communication strategies drive the dissent, rather than the level of macroeconomic uncertainty.