Short and Long Effects of Productivity on Unemployment

Okun’s (1962) seminal paper is an important study on economic growth and unemployment but a detailed exploration of the effect of productivity growth on unemployment has been left aside. Yet, the relationship between productivity growth and unemployment has been debated since long. In this paper we present stylized facts on the link between productivity growth and unemployment for the short and long run, and present model variants that demonstrate that in the short run productivity growth may increase unemployment while in the long run the relationship between productivity growth and unemployment are likely to co-vary negatively. Using US data, empirically we decompose the time series of unemployment rate and productivity growth into long run and short run components and show empirical evidence that the long run and short run components co-vary as predicted by some theories.     

The environmental effect of car-free housing: A case in Vienna

A case-control study of the car-free model housing project in Vienna was conducted to evaluate whether people living in this settlement have more ‘sustainable lifestyles’ than people living in comparable buildings in Vienna. Another aim was to identify the lifestyle characteristics and household activities which significantly influence the environmental impact of the residents of the car-free housing project and a control group. The control group, referred to as the reference settlement, was chosen from a nearby building complex, with similar characteristics, but without the car-free feature. Household consumption patterns were estimated based on interviews in combination with data from the Austrian consumer expenditure survey and the national accounts. The evaluation of household environmental impacts uses emissions estimates from the Austrian national accounting matrices including environmental accounts and data from life-cycle assessments. Households from the car-free settlement have substantially lower environmental impacts in the categories of ground transportation and energy use; their CO₂ emissions of these two categories are less than 50% of those living in the reference settlement. The households in the car-free settlement have somewhat higher emissions in the categories air transport, nutrition, and ‘other’ consumption, reflecting the higher income per-capita. As a result, the CO₂ emissions are only slightly lower than in the reference settlement, but the emissions intensity is 20% lower. Both household groups have significantly lower environmental impacts than the Austrian average reflecting less car use and cleaner heating energy in Vienna.     

Zur Vertiefung der wirtschaftlichen Konvergenz in der Eurozone

In a draft recommendation, National Competitiveness Boards should be established which inter alia should monitor the developments in labour costs. The German and European Trade Unions have refused this proposal strictly. Here, as a way out, an alternative proposal is presented extending the agenda to the macroeconomic development and policy as a whole. In implementing the agenda, social partners should be included together with the other macroeconomic actors such as monetary and fiscal policy in a Macroeconomic Dialogue forum on both the national and Eurozone levels.     

Zehn Jahre Makroökonomischer Dialog — eine Zwischenbilanz

Zusammenfassung  Der Makro?konomische Dialog (MED) wurde vor zehn Jahren — nahezu zeitgleich mit dem Beginn der dritten Stufe der Europ?ischen Wirtschafts- und W?hrungsunion (EWWU) — konzipiert und umgesetzt. Wie sind die Erfahrungen mit diesem Instrument der wirtschaftspolitischen Koordinierung auf europ?ischer Ebene? Wie kann der MED noch wirksamer zu einer spannungsfreien Wachstums- und Besch?ftigungsdynamik im gesamten Euroraum beitragen? Dr. Volker Hallwirth, 54, und Dr. Willi Koll, 61, sind Mitarbeiter im Bundesministerium für Wirtschaft und Technologie. Sie geben hier ihre pers?nliche Meinung wieder. W. Koll war seit Beginn im Herbst 1999 bis Herbst 2006 Vorsitzender des Makro?konomischen Dialogs auf technischer Ebene und Berichterstatter im Makro?konomischen Dialog auf politischer Ebene; V. Hallwirth war jeweils an den inhaltlichen Vorbereitungen beteiligt.     

STOCK‐FLOW INTERACTIONS,DISEQUILIBRIUM MACROECONOMICS AND THE ROLE OF ECONOMIC POLICY

This paper presents the ‘KMGT’ (Keynes–Metzler–Goodwin–Tobin) portfolio model and studies its stability properties. The approach to macrodynamic modelling taken here extends the KMG model of Chiarella and Flaschel (2000) , focusing in particular on the incorporation of financial markets and policy issues. The original KMG model considered three asset markets (equities, bonds and money) but depicted them in a rudimentary way so that they had little influence on the real side of the model. The only financial market influencing the real side of the economy was the money market (via an LM curve theory of interest). Here Tobin's portfolio choice theory models the demand for each asset in such a way that the total amount of assets that households want to hold equals their net wealth, which is a stock constraint attached to portfolio choice. There is also a flow constraint, that the net amount of assets accumulated (liabilities issued) by one sector must equal its net savings (expenditures). The Tobinian macroeconomic portfolio approach characterizes the potential for financial market instability, focusing on the interconnectedness of all three markets. The paper goes on to study the potential for labour market and fiscal policies to stabilize unstable macroeconomies.     

Estimating Beta-Coefficients of German Stock Data: A Non-Parametric Approach

Abstract

Although the consumption based asset pricing theory appears to be theoretically superior and more elegant than the beta pricing model, in practice the beta pricing model is more widely applied. Indeed, beta pricing models are one of the most widely adopted tools in financial analysis. They readily allow handling systematic risk as priced in financial assets. However, accurately estimating beta-coefficients is not as straightforward as implicitly suggested by Sharpe's standard market model, i.e. simply using the ordinary least-squares (OLS) regression. This is primarily because beta-coefficients cannot generally be assumed to be stable over time. In order to overcome this deficiency, we present and apply a non-parametric estimation technique that allows capturing this time effect and promises both more reliable estimates than obtained with an OLS regression as well as better manageability compared with the existing time-series approaches dealing with time-varying beta-coefficients. Estimation results for constant and time-varying betas are presented for portfolios of German industries.     

Relationship Marketing and Micro-Retailer Brand in Traditional Markets

Micro-retailers in the developing world face tough competition from the modern retail sector, and there is some question about their long-term viability. The key to a sustainable role in retailing as the economy modernizes is continuing loyalty among the expanding middle class. We use in-depth interviews among traditional micro-retailers and their customers in Bangkok to illustrate that 1 segment of middle-class customers does see substantial value in continuing to patronize traditional micro-retailers. The service interaction and buyer-seller relationships are vital to customer loyalty for these traditional micro-retailers. Based on this, it seems likely that at least some traditional micro-retailers will be able to survive and prosper as the food retail environment modernizes in Thailand.     

Endogenous Growth: Estimating the Romer Model for the US and Germany*

By contrasting endogenous growth models with facts, one is frequently confronted with the prediction that levels of economic variables, such as R&D expenditures, imply lasting effects on the growth rate of an economy. As stylized facts show, the research intensity in most advanced countries has dramatically increased, mostly more than the GDP. Yet, the growth rates have roughly remained constant or even declined. In this paper we modify the Romer endogenous growth model and test our variant of the model using time series data. We estimate the market version both for the US and Germany for the time period January 1962 to April 1996. Our results demonstrate that the model is compatible with the time series for aggregate data in those countries. All parameters fall into a reasonable range.     

Generational accounting: an international comparison

With rapidly rising government debt and ageing populations implying high contingent liabilities in public pension systems, the issue of longer-term fiscal developments is gaining importance. The question arises whether, and to what extent, future generations will be burdened by current policies. Generational accounting is a new approach to examining such issues and it is used more and more in the policy debate.