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.     

Global and Country‐Specific Output Growth Uncertainty and Macroeconomic Performance

We identify global and country‐specific measures of output growth uncertainty for a large OECD country sample by means of a dynamic factor model with stochastic volatility. We find evidence for major bouts of global uncertainty in the early 1970s and late 2000s, and a number of periods with elevated levels of either global or national uncertainty, particularly in the early 1980s, 1990s and 2000s. VAR impulse responses of national macroeconomic variables to our estimated measures of uncertainty reveal that global uncertainty is the major driver of macroeconomic performance in most countries, whereas the impact of national uncertainty is small and frequently insignificant. We also find that uncertainty is transmitted primarily through investment and trade flows rather than through consumption demand.     

Taylor rules and the Canadian–US equilibrium exchange rate

This paper identifies the Canadian–US equilibrium exchange rate based on a simple structural model of the real exchange rate, in which monetary policy follows a Taylor-rule interest rate reaction function. The exchange rate is explained by relative output and inflation as observable variables, and by unobserved equilibrium rates as well as unobserved transitory components in output and the exchange rate. Using Canadian data over 1974–2009 we jointly estimate the unobserved components and the structural parameters using the Kalman filter and Bayesian technique. We find that Canada's equilibrium exchange rate evolves smoothly and follows a trend depreciation. The transitory component is found to be very persistent but much more volatile than the equilibrium rate, resulting in few but prolonged periods of currency misalignments.     

Erstens: ignorieren, zweitens: diffamieren, drittens: umarmen?

Mass media are an essential factor for the success of small parties, for the media can act in a supporting or an inhibiting way towards these parties. This could be observed for the example of the German Green Party: As the Greens were becoming more and more important in the parliaments, the media changed their formerly very critical view of the party to a more factual and positive reporting. Is the party “Die Linke” now experiencing a similar process? The present study analyses the comments of three national German newspapers from 2005 to 2009, using a quantitative content analysis with the aim of bringing to light how the media acted towards “Die Linke”. The results show that commenting has hardly changed since earlier studies were published. Factual issues only play a marginal role, and the party is judged negatively in all newspapers, with the tageszeitung slightly distinct from the other two papers, though.     

Granularity of Services

Service-oriented architectures are widely discussed as a design principle for application and enterprise architectures. Nevertheless, an adequate granularity of services has not yet been researched sufficiently from an economic perspective. The finer the granularity to realize the functions of a process, the higher the number of services is, and the more effort has to be directed towards composing them. In contrast, very coarse-grained services bear the disadvantages of higher implementation costs and lower reuse potential (e.g., in different processes). The aim of the decision model proposed in this paper is to determine an adequate granularity of services from an economical perspective. Thus, degrees of freedom, which often exist for the choice of granularity after a domain analysis, can be leveraged to realize a cost-efficient solution. We illustrate the applicability and practical benefits of the decision model with an example from the context of a financial services provider.     

Daily pricing of emerging market sovereign CDS before and during the global financial crisis

In this paper, we study the determinants of daily spreads for emerging market sovereign credit default swaps (CDSs) over the period April 2002–December 2011. Using GARCH models, we find, first, that daily CDS spreads for emerging market sovereigns are more related to global and regional risk premia than to country-specific risk factors. This result is particularly evident during the second subsample (August 2007–December 2011), where neither macroeconomic variables nor country ratings significantly explain CDS spread changes. Second, measures of US bond, equity, and CDX High Yield returns, as well as emerging market credit returns, are the most dominant drivers of CDS spread changes. Finally, our analysis suggests that CDS spreads are more strongly influenced by international spillover effects during periods of market stress than during normal times.     

Zum Problem optimaler Wachstumspfade in mehrsektoralen Modellen

Zusammenfassung Ausgangspunkt bildet ein Produktionsmodell, das durch eine Kombination von zwischensektoraler Prozeßbeschreibung und allgemeinen sektoralen Produktionsfunktionen gewissen empirischen Befunden über input-output-Struktur und Substitutionseffekten theoretisch zu entsprechen versucht. Auf dieser Basis läßt sich eine Reihe von Problemen des optimalen Wachstums (welfaremaximierende Pfade, optimale Beschäftigungspfade, konsummaximierende Pfade) als klassische Variationsprobleme formulieren. Schließlich wurde ein allgemeiner Ausblick auf andere Interpretationen (steuerbare Prozesse) und diesen angemessene Lösungstechniken größerer Leistungsfähigkeit (Maximumprinzip von Pontrjagin) eröffnet.Mit 1 Textabbildung