Do we need a European lender of last resort?

During a financial crisis, pressure on Central banks to act as a lender of last resort (LLR) and to offer emergency liquidity assistance to troubled banks increases. The European Central Bank, however, has announced that it does not regard it as its principal task to provide emergency liquidity to troubled banks and that it does not wish to disclose the conditions and practicalities of emergency liquidity assistance arrangements. In this paper, we investigate the benefi ts and the costs of centralising the LLR function in a monetary union and ask whether establishing an LLR in Europe could be useful.     

Must the semi-conductor industry be subsidised?

According to the memorandum entitled “Microelectronics 2000”, the Japanese and American lead in semi-conductor technology threatens not only the existence of a number of European firms but the prosperity of all the European economies. It therefore concludes that if Europe is not to be at the mercy of giant Japanese and US concerns the state must ensure the development of these key technologies by paying substantial subsidies. How valid is this argument?     

Cleaning San Francisco,cleaning the United States: The graft prosecutions of 1906–1909 and their nationwide consequences

Abstract

This case study examines public debates on, and investigations of, corrupt city officials and bribe-giving businesspeople in the western metropolis of San Francisco during the era of progressivism. Law enforcement was not only difficult because of the lack of juridical evidence but also because large portions of the local business elites were benefiting from illicit structures. The prosecutions failed, but financier, banker and capitalist Rudolph Spreckels initiated a national anti-graft movement in the early 1910s, which discussed the concept of corporate social and civic responsibility as an alternative to criminal prosecution and an opportunity to harmonise class conflicts.     

Bank of Japan versus Eurosystem

On 9 March 2006, the Bank of Japan announced a change in its monetary policy framework. It decided to terminate quantitative easing policy and intends to attach more importance to price stability. Because the new strategy shares similarities with the one used by the Eurosystem, the paper will use this point of comparison to examine the respective monetary policymaking institutions of Japan and the euro area. *This paper was written while Uwe Vollmer was staying at Kobe University as a visiting scholar. He wishes to thank Kobe University for the fi nancial support and generous hospitality he received during this visit. The authors would also like to thank Monika Bucher and Achim Hauck for their helpful remarks and James Lewelyn for his careful grammatical corrections of this paper.     

Factors affecting farmers’ acceptance of conservation measures—A case study from north-eastern Germany

Intensive forms of agriculture have been proven to cause severe environmental effects, such as soil erosion by water and wind, or the pollution of ground and surface water with nutrients and pesticides contributing to the deterioration of natural habitats and the loss in biodiversity. In order to avoid or mitigate these detrimental environmental effects, a number of conservation measures can be undertaken by farmers. However, the adoption of these measures is highly dependent on the assumed benefits and risks attached as well as the personal perception and attitude of the individual farmer.This paper presents the outcome of a survey conducted in north-eastern Germany aimed at analysing farmers’ acceptance of different conservation measures. Eleven farmers, managing more than 80% (about 13,000 ha) of the agricultural land in the chosen case study region were interviewed. Respondents were asked about their personal experiences with different environmental measures and requested to assess these measures, e.g., regarding costs, time and labour demands, attached risks, or effectiveness. They also ranked these factors in terms of importance for decision making on adoption or rejection of a new measure. The findings show that, despite of the general assumption that farmers’ decisions are mostly driven by economic rationality, costs were not the most important factor. Other factors, like associated risks, effectiveness, or time and effort necessary to implement a certain measure were equally or even more important depending on the specific situation.     

Will digital technologies transform agriculture in developing countries?

Mobile phones and the internet have significantly affected practically all sectors of the economy and agriculture is no exception. Building on a recent World Bank flagship report, this article introduces a concise framework for describing the main benefits from new information and communication technologies. They promote greater inclusion in the broader economy, raise efficiency by complementing other production factors, and foster innovation by dramatically reducing transaction costs. The article reviews the recent literature on corresponding technology impacts in the rural sector in developing countries. Digital technologies overcome information problems that hinder market access for many small‐scale farmers, increase knowledge through new ways of providing extension services, and they provide novel ways for improving agricultural supply chain management. While there are many promising examples of positive impacts on rural livelihoods—or “digital dividends”—these have often not scaled up to the extent expected. The main reason is that technology can always only address some, but not all of the barriers faced by farmers in poorer countries.     

Income Shocks,Inequality, and Democracy*

In this paper, motivated by contradictory evidence on the effect of income on democracy, we investigate the hypothesis that it is income shocks – major income fluctuations relative to the trend – rather than marginal year‐on‐year variation in income levels that lead to non‐trivial changes in the quality of political institutions. Empirical results provide support for this hypothesis, and show how income inequality plays a crucial role in the effects of economic shocks on democracy. In particular, negative income shocks reveal a positive effect on democracy in countries with high inequality, and vice versa.