Budgetpolitische Eigenverantwortung bei rückläufiger Bevölkerungsentwicklung

Demographic change is a particular challenge for fiscal federalism, because the decline of population is expected to affect the various regions within a country unequally. Population growth and shrinkage co-exist, thus requiring both upward and downward adjustments in physical and social infrastructure. A recent report by the Scientific Advisory Board to the German Federal Ministry of Finance discusses the potential implications for the governance of budget policy. The present article reviews this report, which pleads in favour of tight budget constraints and clear-cut fiscal accountability at the local level. Rules have to be enforced which ensure the timely adjustment of local public expenditures to shrinking revenues. The state and federal levels have to protect themselves against the risk of having to bail out those local jurisdictions which have missed or delayed the necessary measures against growing deficits.     

How to measure the market power of banks in the lending business accurately: a segment-based adjustment of the Lerner Index

Numerous empirical studies use the price-cost-margin-based Lerner Index (LI) to assess the general market power of banks. A common procedure within those LI applications is to approximate the market price required for the LI measurement as the ratio of a bank’s total revenues to total assets. We discuss the major flaws of this aggregated procedure and propose an adjusted (i.e. business segment-orientated) LI approach, which is then applied to assess the market power of banks in the specific lending business at the country level. Our empirical study is based on an original data set containing all interest-related categories (weighted by the respective loan as well as deposit volumes) in the countries of the European Monetary Union zone (EMU) from 2003 to 2013. Our results reveal that the country-specific market power of banks in the lending business has been substantially underestimated in previous studies based on aggregated outputs. For example, averaged across the five most important economies in the EMU, we detect a calibration factor of four. Our findings corroborate the economic notion that the interest-bearing lending business is a more locally separated, and thus profitable, segment in which competition is attenuated.     

Imports and the structure of retail markets

Abstract We construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. We are especially interested in investigating the transmission of lower import prices into consumer prices and the effects of retail market regulation. The paper shows that changes in import prices may have large effects on consumer prices and import volumes when changes in retail market structure are taken into account, and that restrictions on retailing, as they occur in several countries, may significantly alter this transmission mechanism by reducing imports and raising consumer prices.     

Control of international capital movements

Intereconomics - Since March 1973 virtually all major currencies or currency blocs have been floating. As a result — so it seemed — controls over international capital movements would...     

Principles of Neo-Schumpeterian Economics

Within the last 25 years great progress has been made in Neo-SchumpeterianEconomics, this branch of economic literature which deals withdynamic processes causing qualitative transformation of economiesbasically driven by the introduction of novelties in their variousand multifaceted forms. By its very nature, innovation and,in particular, technological innovation is the most exponentand most visible form of novelty. However, Neo-SchumpeterianEconomics should be concerned with all facets of open and uncertaindevelopments in socio-economic systems. A comprehensive Neo-Schumpeterianapproach therefore has to consider not only transformation processesgoing on, e.g., on the industry level of an economy, but alsoon the public and monetary side of an economic system. Our contributionintroduces those extensions and complements to a comprehensiveNeo-Schumpeterian economic theory, and develops some signpostsin the sense of a roadmap for necessary strands of analysisin the future.     

Ausgabenvergleich zwischen Bundesländern

Die fiskalischen Folgen der Wirtschaftskrise und die ab 2020 strikt geltende Schuldenbremse machen es erforderlich, dass Bund, L?nder und Gemeinden ihre Ausgaben auf Auff?lligkeiten hin untersuchen. Ein Instrument auf Landes- und Gemeindeebene ist der systematische Ausgabenvergleich zwischen Bundesl?ndern. Dabei ergibt sich die Schwierigkeit, dass zahlreiche Aufgaben in Teilen von beiden Ebenen erfüllt werden. Um diese zu analysieren, ist der Kommunalisierungsgrad der Aufgabenerfüllung zu bestimmen.     

Locational Competition: A Neglected Paradigm in the International Division of Labour

Krugman's verdict that competitiveness of countries is a largely meaningless concept is a serious misjudgement of the economics profession. Countries compete for the mobile factors of production, most importantly for capital and technology. The exit‐option of these factors and of firms changes the calculus of national governments. This paper sets out the main elements of the concept of competition between locations – locational competition – and analyses its impact on welfare and employment of the capital‐exporting country. It also looks at whether competition between countries necessarily results in a race to the bottom or whether it can function as a controlling mechanism for governments and as a discovery device. The paper discusses under which conditions common rules are needed to reduce transaction costs and to prevent strategic, opportunistic behaviour of countries and which common rules thus reduce transaction costs. Finally, it deals with the question whether one institutional equilibrium in the world economy can be expected or whether many national equilibriums can coexist.