No significant service gap between west Germany and the USA

Conclusions The analyses show that a significant “services gap” does not exist between west Germany and the USA. Such a gap is not even evident in the area of low-skill service activities, such as in catering, once the marginal employment relations — the importance of which is understated by the official statistics — are included. This finding invalidates the empirical basis for economic policy proposals for an expansion of employment in service branches as a way out of the employment crisis. It is evident that a solution to Germany's current employment problems can only be found in a strategy that increases the scope for employment at the macro-economic level, i.e. irrespective of sectoral developments and whatever the implications of this for the distribution of the various types of activity. Having said this, the heavy bias in the output structure of the German economy in favour of industrial output suggests that an additional employment potential does exist in services, especially personal services.     

Oil and the Euro area economy

We examine the macroeconomic effects of different types of oil shocks and the oil transmission mechanism in the Euro area. A comparison is made with the US and across individual member countries. First, we find that the underlying source of the oil price shift is crucial to determine the repercussions on the economy and the appropriate monetary policy reaction. Second, the transmission mechanism is considerably different compared to the US. In particular, inflationary effects in the US are mainly driven by a strong direct pass-through of rising energy prices and indirect effects of higher production costs. In contrast, Euro area inflation reacts sluggishly and is much more driven by second-round effects of increasing wages. The monetary policy reaction of the ECB to oil shocks is also strikingly different compared to the FED. The inflation objective, relative to the output stabilization objective, appears more important for Euro area monetary authorities than for the FED. Third, there are substantial asymmetries across member countries. These differences are due to different labour market dynamics which are further aggravated by a common monetary policy stance which does not fit all.
--- Gert Peersman and Ine Van Robays     

Eigentumsentflechtung,deep-ISO,der dritte Weg — wohin führt die Reise der Europäischen Energiemärkte?

This paper discusses vertical unbundling of networks from the commercial businesses in the European energy markets. The current status quo in the political field in Brussels is to implement a choice between three options: ownership unbundling, the “deep-ISO”, the “third way”. The “third way” is the strengthening of the current unbundling regulations, but will change hardly anything in the industry structure. The “deep-ISO” requires the separation of system operations into an independent entity, whereas transmission ownership does not change hands and thus possibly remains in one hand with the power plants. If the ISO decides and orders network investment, we speak of a “deep-ISO”. The more controversial proposal is ownership unbundling. A social-cost-benefit-analysis of the German transmission system operators (Brunekreeft, 2008) suggests that the likely overall effect for social welfare is slightly positive, but effects are small.     

Macro‐integration with inequality constraints: an application to the integration of transport and trade statistics

Macro‐integration is the process of combining data from several sources at an aggregate level. We review a Bayesian approach to macro‐integration with special emphasis on the inclusion of inequality constraints. In particular, an approximate method of dealing with inequality constraints within the linear macro‐integration framework is proposed. This method is based on a normal approximation to the truncated multivariate normal distribution. The framework is then applied to the integration of international trade statistics and transport statistics. By combining these data sources, transit flows can be derived as differences between specific transport and trade flows. Two methods of imposing the inequality restrictions that transit flows must be non‐negative are compared. Moreover, the figures are improved by imposing the equality constraints that aggregates of incoming and outgoing transit flows must be equal.     

Agenda 2009 – Wahlkampf!

Ohne Zusammenfassung Gert G. Wagner ist Lehrstuhlinhaber für Volkswirtschaftslehre an der TU Berlin und Forschungsdirektor am DIW Berlin. Er war Mitglied der Rürup-Kommission.     

Overtime reductions: Negligible employment effects

Summary Overtime hours were worked in Germany during the period 1990–1997 primarily by well-qualified blue-collar and white-collar workers. In addition, it is evident that overtime is increasingly being compensated by flexible leisure schedules. The scope for potential employment effects from a reduction of paid overtime is thus constantly decreasing and is much lower than the figures cited by unions in the current discussion. If the regulations to make working time more flexible being discussed in the “Alliance for Jobs’ were to be implemented, this would reinforce the observed trend towards compensation for overtime through leisure, further diminishing the potential employment effects. If the bargaining parties or the legislators would implement a reduction of overtime nonetheless, well-qualified blue-collar and white-collar workers in western Germany will suffer income losses.     

Friends with benefits: Behavioral and fMRI studies on the effect of friendship reminders on self-control for compulsive and non-compulsive buyers

Does the real or imagined presence of friends invariantly drive consumers to engage in disinhibited behavior, and give in to the “urge to splurge” in the face of consumption temptations? Or might there be situations in which being with friends or even merely thinking of friends or the friendships we have with them can actually improve self-control?In five studies, using a unique combination of controlled experiments examining overt consumer behavior and functional magnetic resonance imaging (fMRI), we propose and show that the extent to which consumers identify a goal conflict between giving in to buying temptations on the one hand and the perceived consequences for maintaining satisfactory relationships with close friends on the other is a critical mediator of whether friendship reminders decrease or increase self-control. We further show that such a goal conflict is most likely for consumers with a chronic, compulsive tendency for uncontrolled, disinhibited acquisition and consumption—for consumers classified as compulsive buyers. For their non-compulsive counterparts, in contrast, acts of acquisition and consumption, even incidental disinhibited ones, are perceived to be less problematic in light of their friendships and hence do not induce a goal conflict to the same extent. Our findings provide insights into social influences on self-control and identify the concept of friendship reminders as a way to reduce a common type of dysfunctional consumer behavior. In addition to enhancing consumer well-being, reducing compulsive buying will substantially reduce handling costs for organizations. Hence, the findings are of academic, societal and managerial relevance.