Tenure choice and expected mobility: A synthesis

This study employs a joint logit probability model to estimate the effects of a vector of independent variables on the household's current tenure choice and expected mobility which are hypothesized to be simultaneously determined. In the empirical analysis it was found that the coefficient on the endogenous variables (tenure choice and expected mobility) is the most highly significant of all the coefficients estimated. In addition, in previous analyses the age of the household head has always exhibited a highly significant positive effect on the probability of ownership. However, in this analysis it is demonstrated that this age variable was acting as a proxy for the expected mobility and wealth of the household.     

Habilitation von Dr. Erich Lamp in Mainz

Ohne Zusammenfassung     

How to promote R&D-based growth? Public education expenditure on scientists and engineers versus R&D subsidies

This paper compares the positive and normative implications of two alternative measures to promote R&D-based growth: R&D subsidies to firms and publicly provided education targeted to the development of science and engineering (S&E) skills. The model accounts for the specificity of S&E skills, where individuals with heterogeneous ability choose their type of education. Although intertemporal knowledge spillovers are the only R&D externality, the analysis suggests that R&D subsidies may be detrimental to both productivity growth and welfare. Moreover, they raise earnings inequality. In contrast to R&D subsidies, publicly provided education targeted to S&E skills are found to be unambiguously growth-promoting and neutral with respect to the earnings distribution.     

Long-Term Care Insurance and Life Insurance Demand

This article investigates the interaction between life insurance and long-term care insurance markets on the demand side. In the model utility depends on both consumption and bequest, and utility from consumption is contingent on the state of health. While the demand for life insurance increases both with decreasing income and with a rising degree of altruism, the influences of these two parameters on the demand for long-term care insurance are ambiguous. If the utility shock arising from disability declines, both insurance demands will rise.     

Public development aid: Below the target

At the beginning of the Second Development Decade (1970–1980) the Industrial countries set themselves the target of stepping up their public development aid to 0.7 p.c. of their GNP by 1975. The validity of this aim is still emphasised by representatives of international organisations as well as spokesmen of individual industrial countries, such as the Federal Republic of Germany.     

Future generations: Economic, legal and institutional aspects

In economics, the issue of ‘future generations’ is mainly related to the environmental problems of resource consumption and pollution and their distribution over long time horizons. This paper critically discusses fundamental concepts in economics, such as efficiency and optimality, in relation to the incorporation of future generations in present day decision-making. Cost-benefit analysis (CBA) and discounting are used as a starting point and criticized for its inherent flaws such as incommensurability of values and its tendency to hide rather than reveal underlying values which are assumed to be fixed. We then investigate alternative approaches, in which, unlike in CBA, the preferences are not assumed to be a priori but must be constructed. Thus, interest groups or individuals must sit down together and figure out what things seem to be worth. The aim is to involve all interested parties in planning for the future.Similarly, on a national and regional level, increasingly stakeholder processes, deliberative and interest group procedures are used to develop strategies and visions for resource management and conservation. A similar case can be made for institutions at the international level. The legal examples provided in this paper show that rather than only installing an institution such as the guardian for the future on the global level, more ‘democratized’ bottom up approaches might be more appropriate.     

Virtual Currencies,Distributed Ledgers and the Future of Financial Services

The phenomenon of virtual currencies has to be distinguished from the underlying distributed ledger technologies. Bitcoin and other cryptocurrencies need to be subject to strict financial regulation and supervision to ensure investor protection. At the same time, distributed ledger technologies will shape the future of the financial services in many respects. The disruptive potential is illustrated for selected financial products and processes.     

Cross-border mergers and acquisitions vs. greenfield foreign direct investment: The role of firm heterogeneity

We develop a general equilibrium model with heterogeneous firms to address two sets of questions: (1) what are the characteristics of firms that choose the various modes of foreign market access (exporting, greenfield FDI, and cross-border M&A), and (2) how does the international organization of production vary across industries and country-pairs? We show that the answers to these questions depend on the nature of firm heterogeneity. Depending on whether firms differ in their mobile or immobile capabilities, cross-border mergers involve the most or the least efficient active firms. The comparative statics on industry and country characteristics display a similar dichotomy.