Do two bribe less than one? – An experimental study on the four-eyes-principle

We incorporate a four-eyes-mechanism on the briber’s side into a bribery game. Our results are mixed. We find no effect of the mechanism in a one-shot setting, but a reduction of bribes when the setting is repeated.     

Government debt and economic growth in the G7 countries: are there any causal linkages?

This article investigates the direction of Granger-causality between debt and growth in the G7 countries using quarterly data from 1980 to 2013. We analyse the causal structure both in level data using the Toda and Yamamoto causality test, and with differenced data by means of dynamic impulse response analysis. Results indicate that growth causes debt rather than the other way around. We find the effect of growth on debt to be unambiguously negative in all cases of significant causality, but to be a short- to medium-run phenomenon with no lasting impact. We also find that results are sensitive to the sample period, with causality from growth to debt much more prevalent when the sample period includes the recent financial crisis.     

The demand for money in Austria

In this paper, the demand for real money M1, M2, and M3 is estimated for Austria over the time period 1965–96. The modelling takes place within the framework of a small vector autoregression. To estimate the demand for money, two-equation error-correction models are constructed, which contain the short-run dynamics and the long-run economic equilibrium. It is found that a stable money demand exists for all monetary aggregates. The long-run equilibrium of M1, after accounting for a structural break in 1979, can be characterised as a classical type of money demand, with no interest rate effects and an elasticity of one for real GDP. In the case of M2 and M3, we find a unit coefficient on income and a significantly negative influence of a long-term interest rate. The statistical properties of the estimated short-run money demand equations – considering in-sample and out-of-sample tests – are generally very good. First version received: October 1996/Final version received: April 2000