A gross-impact case study: The Dutch construction sector

The authors advocate the use of cross-impact models for scenario generation and describe a calibration technique which reduces problems of scaling. In a study of the Netherlands construction sector to 1990, aggressive interviewing of experts produced quantified trends. After cross-impact analysis, an input-output table for 1990 was estimated from that for 1975. A number of scenarios were also developed, by adding events to the matrix. The authors review the strengths and weaknesses of the methods used and summarise the results of the study.     

Softening Competition by Inducing Switching in Credit Markets

We show that competing banks relax overall competition by inducing borrowers to switch lenders. We illustrate our findings in a two-period model with adverse selection where banks strategically commit to disclosing borrower information. By doing this, they invite rivals to poach their first-period market. Disclosure of borrower information increases the rival's second-period profits. This dampens competition for serving the first-period market.     

Interdisciplinary social science: a methodological analysis

Since the 1930's, interdisciplinarity has been advocated in the social sciences for the purpose of achieving more comprehensive explanations of observable social phenomena. However, the realization of this promising perspective has been rather poor. This article argues that two main causes of the failure to create interdisciplinary social science can be distinguished, i.e., methodological and theoretical problems. Methodological problems stem either from taking a reductionist approach towards interdisciplinarity, or by mistaking measurement issues for theoretical topics. Theoretical problems result from the poor state and rate of theory formation within psychology. The implications of these problems are that the validity and reliability of explanations of macro social phenomena, which are provided by disciplines such as sociology and macro economics, are seriously at stake.     

Christoph Neuberger in Eichstätt habilitiert

Ohne Zusammenfassung     

Concepts Used in Statistical Business Registers in View of Globalisation and the Information Society

The globalisation of markets and the development of the information society are two factors increasingly affecting statistical business registers. The article describes a number of problems caused by the globalisation process and the information society as which kind of business units should be recorded-enterprises or enterprise groups, how cross-border ownership, control and cooperation could be identified in the administrative registers, classification of activity in connection with foreign subsidiaries, recording of date of commencement of foreign subsidiaries in a national economy, recording of places of work in the case of teleworking, problems in connection with the recording of individuals involved in teleworking as self-employed persons and the emergence of virtual enterprises. The article also raises the question of whether there is a need for an international satellite register for (transnational) concerns. Both globalisation and the growing information society therefore place new demands on statistical business registers, and these demands might necessitate mobilisation of additional resources for maintaining and developing the registers.     

Asset Policies During an Oil Windfall: Some Simple Analytics

Many developing countries are currently experiencing oil windfalls, whether due to discoveries or to price effects. Such windfalls pose a series of policy dilemmas. The literature has focused on one of these: the choice between using windfall savings for public capital formation and investment in foreign assets. There are good theoretical reasons for investing a substantial part of the windfall initially abroad: the return to investment would fall below the world interest rate if the windfall were to be used entirely for domestic investment. Investing abroad offers an escape from diminishing returns: foreign assets can be repatriated gradually and used for domestic investment. However, in practice the efficient balance between domestic and foreign assets is politically difficult to sustain. Also, even if politically feasible this strategy is inefficient due to the failure to expand the private capital stock (‘equipment’). The policy problem is that the government cannot undertake such investment itself and trying to induce private agents to undertake equipment investment by transferring part of the windfall to them is likely to fail as a result of information problems. We argue that domestic debt repayment solves this dilemma. It has the added advantage of making foreign asset accumulation difficult to reverse.     

Employment and wage behaviour of industrial enterprises in transition economies: The cases of Poland and Czechoslovakia1

In this paper we use two very large panel datasets from Poland, 1988-90 and Czechoslovakia, 1990-1992 to explore the dynamics of employment and wage determination at the enterprise level in the early years of transition. The study is intended to assist in building a coherent picture of microeconomic adjustment in transition, a field which was not sufficiently explored in the early years of reform. We find that Polish firms were already to some extent responsive to market conditions pre-reform, notably to demand in determining employment. Czechoslovak firms, however, were largely unresponsive to such pressures in 1989-90. The elasticities rose significantly in both countries in the early years of reform, especially in Czechoslovakia which quickly attained initial Polish patterns of adjustment. Firms became much more responsive to sales and cost pressures in adjusting employment and to their own productivity in setting pay. Ownership effects in these early years were, however, much more modest, with state-owned firms adjusting employment more than their private counterparts, perhaps because over-manning was more serious in that sector.     

The recent boom–bust cycle: The relative contribution of capital flows, credit supply and asset bubbles

We use an estimated open economy DSGE model with financial frictions for the US and the rest of the world to evaluate various competing explanations about the recent boom–bust cycle. We find that the savings glut hypothesis is insufficient for explaining all aspects of the boom in the US. Relatively strong TFP growth and expansionary monetary policy are also not able to explain fully the volatility of corporate and in particular residential investment. We identify bubbles in the stock and housing market as crucial. Concerning the downturn in 2008/2009, the fall in house prices and residential investment only plays a minor role. Mortgage defaults have more explanatory power, especially in a specification of the model with a segregated equity market. Finally, the bursting of the stock market bubble was at least as important in this recession as in 2001. Because of various negative shocks hitting the economy at the same time in 2008/2009 and continued positive technology growth, not only the real interest rate declined but inflation fell rapidly and left insufficient room for monetary policy to play a similar stabilising role as in previous recessions.     

Endogenous monetary commitment

We develop an asynchronous framework in which each player can optimally select the frequency of his moves based on cost-benefit considerations. To demonstrate how such ability to commit can alleviate coordination problems, we apply the framework to monetary policy.