Grundsteuerreform: Ende einer Odyssee?

Due to the resistance of Hamburg and Bavaria, the last draft legislation for a property tax reform failed, which was launched by the Federal Council of the German states in autumn of 2016. Since the constitutional court is expected to declare the existing tax assessment rules as unconstitutional, the existing property tax might be suspended, if the property tax cannot be revised on time after the federal elections. With this background, the article first analyses feasible reform options. Moreover, for the first time, an exemplary analysis of the tax payable of these alternative models is provided for two different cities, in terms of their spatial economic structures. A proposal for a corresponding reform of the financial equalisation scheme is forwarded also.     

Assessing risks – challenges posed by the European general product safety directive

The concept of risk appears in a prominent way in the recently revised European Directive on General Product Safety (GPSD). Risk assessment is therefore an important tool for the success of the Directive; the question is how risk assessment should be carried out in a systematic manner in order to meet the aims of the Directive. In this paper, the references in the GPSD concerning the concept of risk are reviewed and compared with reported problems in European risk assessment. Existing guidelines for risk assessment are examined in order to determine what factors determine the consistency of the outcome. This leads to recommendations for a process that could be followed in order to make risk assessment successful in the context of the GPSD. On the basis of existing guidelines for risk assessment, criteria are formulated with which methods of risk assessment should comply. A stepwise process is proposed in order to develop a common method of risk assessment that can be applied in Europe to support the GPSD. The requirements for risk management in the new GPSD are rather and lack specification, both for producers and for enforcement authorities. The Directive further refers to the need to develop non-binding guidelines in due course. Sources of different outcomes of the risk assessment process are outlined in this paper as well as possibilities to achieve a more consistent basis for decisions, more uniformity and transparency. These are essential conditions if one wishes to avoid both undue trade barriers and unsafe products on the market. A leading role for the European Commission seems necessary to make sure that the intentions of the GPSD are accomplished.     

Destabilisierende Spekulation als Rechtfertigung eines Europäischen Stabilisierungsmechanismus?

Im Zusammenhang mit der Zuspitzung der Staatsschuldenkrise für einzelne Euromitglieder wird immer wieder der Vorwurf einer destabilisierenden Spekulation laut. Der Beitrag gibt eine begriffliche Abgrenzung, stellt die verschiedenen Funktionen der Spekulation dar und zeigt die mikro?konomischen Zusammenh?nge stabilisierender und destabilisierender Aktivit?ten auf. Dabei wird die besondere Bedeutung von Kreditsicherungsderivaten (CDS) für die Anleihem?rkte gekl?rt und empirischen Hinweisen auf eine destabilisierende Spekulation nachgegangen.     

R&;D investment and financing constraints of small and medium-sized firms

This study tests for financial constraints on R&D investment and how they differ from capital investment. To identify constraints in the access to external capital, we employ a credit rating index. Our models show that internal constraints, measured by mark-ups, are more decisive for R&D than for capital investment. For external constraints, we find a monotonic relationship between the level of constriction and firm size for both types of investment. Thus, external constraints turn out to be more binding with decreasing firm size. On the contrary, we do not find such monotonic relationships for internal constraints. Differentiation by firms’ age does not support lower constraints for older firms.     

Database marketing modelling for financial services using hazard rate models

This paper investigates the effectiveness of using direct mail message as an element in the communication mix of a financial retail company. The focus in this study will be on interpurchase time, i.e. duration times between the last purchase of any type of financial service by a customer at that bank and the purchasing of a personal loan.

Our findings indicate that (1) direct mail message have a very significant effect on shortening the interpurchase time, (2) the combined effect of several direct mail messages exhibits diminishing returns to scale, (3) incorporating time-varying variables in the model significantly improves model results, (4) Ownership of certain other services has a significant impact on the probability of purchase of the personal loan, and (5) conditional probability of purchase is found to increase with time elapsed since last purchase. The latter finding shows that the receny effect, known to be very important in most RRM models, may to dependent on the product category.     

International Climate Finance and Its Influence on Fairness and Policy

Besides costs and benefits, fairness aspects tend to influence negotiating parties’ willingness to join an international agreement on climate change mitigation. Fairness is largely considered to improve the prospects of success of international negotiations and hence measures raising fairness perception might – in turn – help to bring about effective cooperative international climate change mitigation. We consider the influences present international support of climate policy in developing countries exerts on fairness perception and how this again might affect international negotiations. In doing so we distinguish between fairness perception that is based on historical experiences and perception that is based on conjectures about opponents’ intentions. By identifying beneficial components of current support schemes lessons can be learnt for designing new schemes like the Green Climate Fund.     

Schuldenkrise in der Europäischen Union

Die Krise Griechenlands w?chst sich zu einer Gefahr für den gesamten Euroraum aus. Wie soll die Europ?ische Union darauf reagieren? Sie befindet sich im Dilemma zwischen Bailout und Bestrafung des „Defizitsünders“. Das erste scheint für den Bestand der W?hrungsunion unvermeidlich, das zweite ist erforderlich, um einen Moral Hazard zu vermeiden.     

Pension Funds’ Asset Allocation and Participant Age: A Test of the Life‐Cycle Model

This article examines the impact of participants’ age distribution on the asset allocation of Dutch pension funds, using a unique data set of pension fund investment plans for 2007. Theory predicts a negative effect of age on (strategic) equity exposures. We observe that a 1‐year higher average age in active participants leads to a significant and robust reduction of the strategic equity exposure by around 0.5 percentage point. Larger pension funds show a stronger age‐equity exposure effect. The average age of active participants influences investment behavior more strongly than the average age of all participants, which is plausible as retirees no longer possess any human capital.     

UK mutual fund performance: Skill or luck?

Using a comprehensive data set on (surviving and non-surviving) UK equity mutual funds, we use a cross-section bootstrap methodology to distinguish between ‘skill’ and ‘luck’ for individual funds. This methodology allows for non-normality in the idiosyncratic risk of the funds — a major issue when considering those funds which appear to be either very good or very bad performers, since these are the funds which investors are primarily interested in identifying. Our study points to the existence of stock picking ability among a relatively small number of top performing UK equity mutual funds (i.e. performance which is not solely due to good luck). At the negative end of the performance scale, our analysis strongly rejects the hypothesis that most poor performing funds are merely unlucky. Most of these funds demonstrate ‘bad skill’. Recursive estimation and Kalman ‘smoothed’ coefficients indicate temporal stability in the ex-post performance alpha's of winner and loser portfolios. We also find performance persistence amongst loser but not amongst winner funds.     

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