Constructing Historical Euro-zone Data

Existing methods of reconstructing historical Euro-zone data by aggregation of the individual countries' aggregate data raises numerous difficulties, especially due to past exchange rate changes. The approach proposed here is designed to avoid such distortions, and aggregate exactly when exchange rates are fixed. We first compute growth rates within states, aggregate these, then cumulate this Euro-zone growth rate to obtain the aggregated levels variables. The aggregate of the implicit-deflator price index coincides with the implicit deflator of our aggregate nominal and real data. We apply the method to Euro-zone M3, GDP and prices over the previous two decades.     

Lobbying against environmental regulation vs. lobbying for loopholes

We analyze the determinants of environmental policy when two industry lobbies can seek a laxer policy that would apply to both industries and loophole lobbying that provides benefits specific to one industry. We determine the properties of the lobbying equilibrium, including the resulting emissions level. In many cases, higher effectiveness of loophole lobbying is detrimental for industries and beneficial for environmental quality, as it exacerbates the free-rider problem in the provision of general lobbying by inducing industries to turn towards loophole lobbying.     

Saving for Retirement—A Case for Financial Education in Germany and UK? An Economic Perspective

Demographic changes, tight public budgets, and reduced generosity of occupational pension plans shift the responsibility for an adequate retirement provision towards the individual. Applying the theoretical perspectives of Behavioural Finance and New Institutionalism to the domain of retirement provision offers insights into the difficulties individuals are facing in planning for retirement, carrying out, and revising plans. Lacking financial literacy seems to lie at the heart of the problem and points to a possible solution: providing financial education to consumers through non-governmental organizations and state-related agencies. This article is examining which role consumer education and consumer advice can play to enhance financial literacy with regard to pensions and old-age provision. As two case studies Germany and the UK are compared because the institutional set-up of the pension systems and the approaches towards consumer policy are very different. The case studies show that financial education with regard to old-age provision can be successful if it reaches consumers in their environment at life-stages where important decisions need to be made. To achieve that considerable efforts have to be taken in terms of funding and organizational set-up. However, evaluation is necessary to prove the effectiveness of the education especially for vulnerable consumer groups. If evaluation reveals that these groups cannot be targeted effectively or that consumers are not taking action subsequently to attending financial education, there might be a case for changing behaviour through the institutional set-up of pension schemes (i.e., through automatic enrolment) and using financial education as a supportive policy instrument.