International Cooperation Behind the Veil of Uncertainty – The Case of Transboundary Acidification

The complexities of international environmental problems are only poorly understood. Hence, decision makers have to negotiate about abatement measures even though they do not know the 'true' model of the ecological system and have only a rough idea about the costs and benefits of their action. It will be analysed to what extent this kind of 'model uncertainty' – where players do not only have incomplete information about the payoff functions of the other players, but also about their own payoff function – affects the prospects of international cooperation. Using a simple game-theoretic model, it is shown how countries can use the veil of uncertainty to hide their distributional interests. The arguments are based on a deviation from the common prior assumption, which seems particularly questionable in a setting comprising various countries with different cultural and scientific backgrounds. Finally the model will prove useful to quantitatively and qualitatively illustrate the central role of model uncertainty in the negotiations of the first Sulphur Protocol signed to combat transboundary acidification.     

Nixon’s desperate attempt to fight inflation

Because of continuing Inflation and rising unemployment, Americans were beginning to feel rather frustrated with the Nlxon Administration for their non-actions on the economic front. As an answer to this growing feeling of anxiety the US-President introduced an economic programme which has caused quite a stir in the USA as well as abroad. The author’s intent is to discuss the national and International effects the Nlxon programme will probably have.     

Monetary policy in a Union of 27: Enlargement and reform options

It is to be expected that by early 2006 the European monetary union will be enlarged by up to 10 countries. This poses the question as to whether the current decision-making structure in the common central bank is adequate for such a large membership. Not only will such a large number of national representatives impair the efficiency of decision-making, but monetary policy will have to deal with a much more heterogenous group of members. The following article addresses the problem of enlargement and discusses reform options for the central bank.     

How green is your packaging—A comparative international study of cues consumers use to recognize environmentally friendly packaging

Consumers have grown increasingly aware of the impact of packaging on the environment. Therefore, interest has grown in more environmentally friendly packaging, but we wondered how consumers recognize ‘green’ as distinct from ‘grey’ when evaluating packaging. We asked over 3,000 respondents from Germany, France and the United States how they recognize environmentally friendly packaging. To solicit responses that we may not have anticipated, we used an open‐ended format, which we then followed with a closed‐ended format so that we could compare the two sets of responses. Not surprisingly, in both sets of responses, we found labelling to be the attribute consumers rely upon most, as well as evidence of misleading labels. We also found consumers in Germany and the United States relied on information on the packaging and named searching for information as one of their preferred ways to decide whether packaging is environmentally friendly. French consumers seemed less trusting of published information and more trusting of the look and feel, especially the material, of the package. Our results point to the importance of cultural influences in the acquisition of perceptual cues by the consumer.     

Gefährdet TTIP die ökonomische Zukunftsfähigkeit?

This article contributes to the discussion on the economic effects of TTIP by focusing on the opportunities for the participating economies of enhancing their innovative capacities. Referring to the insights of Neo-Schumpeterian evolutionary innovation economics the article concludes that according to the currently published documents the legal properties of TTIP can harm the ability of states to adapt their regulatory standards — a main instrument for a dynamic and technology-specific innovation policy. The missing flexibility for the new supranational standards can be a major reason for difficulties in the reform of standards aiming at a “creative disturbance” of market processes by the state in order to stimulate innovative activities and to induce additional growth.     

Do the COVID-19 Crisis,Ageing and Climate Change Put Swiss Fiscal Sustainability at Risk?

The ongoing coronavirus pandemic crisis as well as demographic and climate change pose major challenges for public finances. This article deals with the implications of demographic trends in Switzerland, i.e. the progressive ageing of the population and its impact on the country’s public finances in the long run. As the analysis shows, the brunt of the demographic burden is borne by the old-age pension scheme, health and long-term care. This article also addresses the financial ramifications of the COVID-19 crisis and shows the need for economic policy action over the longer term to ensure the sustainability of public finances in Switzerland. Furthermore, a qualitative assessment of climate change is included, as it constitutes an additional major long-term challenge for public finances.

     

Globalization and specialization

The popular Dixit–Stiglitz–Ethier framework proposes that globalization increases the menu of intermediate goods available to downstream firms and that gains from specialization raise welfare unambiguously. This study shows that both results depend critically on the assumption that demand elasticities are invariable. The more general framework presented here provides two main insights: First, whether specialization rises or falls depends ultimately on the shape of the cost function, and second, globalization can actually reduce welfare in the case when specialization falls.