Less scope for foreign trade

Few countries are as dependent on foreign trade as the Federal Republic of Germany. Its close ramifications with the world economy are reflected by an economic policy concept geared to the liberal trade system. The chances for a consistent continuation of this policy have, it must be said, greatly worsened of late.     

Asset tangibility and capital allocation

Firms comprise divisions that often differ with respect to the degree of asset tangibility. As the strength of borrowing constraints depends on the liquidation value of assets, these firms influence their debt capacity by allocating funds across divisions. We argue that a company whose capital allocation is not verifiable suffers from a dynamic inconsistency problem, as it tends to allocate resources in favor of divisions with fewer tangible assets, leading to a tight borrowing constraint. When capital allocation is verifiable, committing to invest only little there eases this constraint, although it implies a deviation from a return maximizing allocation.     

WHAT MONETARY POLICY CAN DO: THE CLARIFIED APPROACH OF THE ECB

In the confirmed and clarified monetary strategy of the ECB, money still plays a prominent role. Regarding inflation as a monetary phenomenon and concentrating on price stability the ECB rejects an activist monetary policy. However, public and open discussion may contribute to further improvement of transparency and predictability of the ECB's operations.     

Cuboidal dice and Gibbs distributions

What are the face-probabilities of a cuboidal die, i.e. a die with different side-lengths? This paper introduces a model for these probabilities based on a Gibbs distribution. Experimental data produced in this work and drawn from the literature support the Gibbs model. The experiments also reveal that the physical conditions, such as the quality of the surface onto which the dice are dropped, can affect the face-probabilities. In the Gibbs model, those variations are condensed in a single parameter, adjustable to the physical conditions.