Analyzing determinants of bond yield spreads with Bayesian Model Averaging

This paper analyzes determinants of country default risk in emerging markets, reflected by sovereign yield spreads. The results reported so far in the literature are heterogeneous with respect to significant explanatory variables. This could indicate a high degree of uncertainty about the “true” regression model. We use Bayesian Model Averaging as the model selection method in order to find the variables which are most likely to determine credit risk. We document that total debt, history of recent default, currency depreciation, and growth rate of foreign currency reserves as well as market sentiments are the key drivers of yield spreads.     

Cost-effectiveness analysis of standalone trabecular micro-bypass stents in patients with mild-to-moderate open-angle glaucoma in Canada

Objectives: To estimate the cost-utility of two trabecular micro-bypass stents (TBS) implantation vs standard of care (SOC) in patients with mild-to-moderate open-angle glaucoma (OAG) in the Canadian healthcare setting.

Methods: The deterioration in visual field (VF) defect over a 15-year time horizon was tracked using a Markov model with Hodapp-Parrish-Anderson stages of glaucoma (mild, moderate, advanced, severe/blind) and death as health states. Meta-analyses of randomized clinical trials were conducted to estimate the pooled reduction in intraocular pressure (IOP) and medication use due to TBS and SOC. The rate of decline in VF loss was adjusted by the extent of IOP reduction to estimate transition probabilities. Healthcare resource utilization, unit costs (2017 CAD), and progression-related utility scores were obtained by literature review, and medication costs with wastage were obtained from IMS Brogan PharmaStat. The impact of parameter and methodological uncertainty on costs and quality-adjusted life years (QALYs) was examined using probabilistic and 1-way sensitivity analyses.

Results: The meta-analysis showed an additional reduction of 1.13 medications/patient and an additional decrease in IOP of –1.10?mmHg at 36?months favoring TBS. TBS strongly dominated medication alone, due to higher improvement in quality-of-life (0.068 QALYs), fewer blind eyes (–0.0031), and a decrease in total healthcare costs of C$2,908.3 per patient over the time horizon (C$9,394.1 TBS vs C$12,302.4 medication alone). Sensitivity analyses showed that results were robust to the uncertainties in model inputs and assumptions. Time-to-dominance was 44?months (3.7?years).

Conclusions: The TBS procedure was cost-effective over SOC in a 15-year time horizon, with quality-of-life gains.     

Sichere Stromversorgung bei hohen Anteilen volatiler erneuerbarer Energien

Recently, concerns have been rising that the energy transition may impair the security of power supply in Germany by increasing the risk of shortages and black-outs in the long run. While power generation from volatile wind and solar energy has grown rapidly, incentives to invest in conventional back-up capacity have diminished. To respond to these concerns, the German government has adopted an energy policy reform package to strengthen the regulatory framework for the power market. But is this package appropriate to sustainably safeguard the German power supply?     

Zur Analyse der Auswirkungen der Biomethaneinspeisung auf die Entwicklung der deutschen Erdgasversorgung

Natural gas offers several advantages compared to other fossil fuels, especially regarding its specific CO₂ emissions and its flexibility in usage. Thus, it is expected that the consumption of natural gas will further increase in the future. Nevertheless, this increase is accompanied by a growing dependence on imports. Biomethane, i.e. conditioned biogenous gas, is an interesting possibility for the substitution of natural gas. As it is a renewable and indigenous energy source, it contributes to the reduction of both: CO₂ emissions and gas imports. Similar to the renewable electricity generation, the German government sets targets for the biomethane feed-in and has introduced promotion mechanisms to achieve these goals. Within this paper the possible role of biomethane in the German natural gas supply has been evaluated by applying the optimising energy flow model PERSEUS-EEM. Results show that the CO₂ emissions trading system by itself is not sufficient for the competitiveness of biomethane. Model results demonstrate that a significant increase of the German natural gas demand can be expected especially due to the stringent CO₂ reduction targets. Even when the political CO₂-reduction targets are reached, biomethane will not play a major role in the natural gas supply of Germany.     

Flow with the Water – können starre,abgeschlossene Kategorien die Realität im heutigen China beschreiben?

VORSCHAU

Vorschau     

Audits,Reputation, and Repeated Interaction in a Capital Budgeting Setting

This experimental study investigates the use of audits as a control instrument in capital budgeting processes and factors that contribute to audit efficiency (or inefficiency) in a repeated relationship. We disentangle reputational aspects of superiors and subordinates from an increased social content in repeated relationships. In settings where subjects face new counterparts every round, we find that reputational aspects strongly affect the superiors' and subordinates' behavior. This leads to a decrease in slack and an increase in the superior payoff. However, in a repeated relationship with an increased level of social content, these benefits are no longer present. In fact, the subordinates' ability to retaliate against their superior for prior punishments in the repeated setting by reporting more slack in later rounds has negative effects on the use of audits and decreases audit efficiency. These findings imply that, in repeated relationships, social factors play an important role and might impair the disciplining effects of audits.     

Mindestlohn: Warnung vor massiven Arbeitsplatzverlusten wenig fundiert — eine Replik

This article by Jürgen Kromphardt argues against the view that the introduction of a legal minimum wage of €8.50 per hour for all jobs will result in a massive reduction of jobs. He finds the theoretical foundation of this forecast very shaky, because the assumptions of this model are not fulfilled in the real world. It is thus unsurprising that empirical analyses do not corroborate it. Groll and Kooths respond that neither demand-side market power in the labour market nor supply-side price-setting capacity in the goods market are sufficient reasons to justify the introduction of minimum wages. They reiterate the major arguments both in the narrow environment of a static market model and in a more enriched framework that puts human action in the centre of economic analysis. They also show that topping up low incomes within the German ALG II transfer system can hardly be considered a wage subsidy.     

Regulierung, Bildung und Wohlstand — der IW-Regulierungsindex

Education is considered as a key factor for the future development of an economy. Therefore, a well-designed education system is indispensable for a society to maintain or increase its welfare. The regulation of the education system is one of the main tools to which a government has recourse in order to infl uence the system. By using the regulation index created by the Cologne Institute for Economic Research (Institut der deutschen Wirtschaft (IW) K?ln), it is possible to quantify this regulation and to identify positive or negative trends. The authors show that a higher extent of regulation usually correlates with negative economic performance. In terms of education, the results indicate that a higher extent of regulation has a negative impact on the labour market, threatening sustainable long-term development of the economy.     

Vinyl record: a cultural icon

In this paper, we use the case of the vinyl record to show that iconic objects become meaningful via a dual process. First, they offer immersive engagements which structure user interpretations through various material experiences of handling, use, and extension. Second, they always work via entanglements with related material ecologies such as turntables, speakers, mixers, and rituals of object care. Additionally, these engagements are complimented by a mediation process which emplaces the vinyl historically, culturally, spatially, and also politically, especially in the context of digitalization. This relational process means that both the material affordances and entanglements of vinyl allow us to feel, handle, experience, project, and share its iconicity. The materially mediated meanings of vinyl enabled it to retain currency in independent and collector’s markets and thus resist the planned obsolescence and eventually attain the status of celebrity commodity with totemic power in music communities. This performative aspect of vinyl markets also means that consumers read closely the signals and symbols regarding vinyl’s status, as its various user groups and champions try to interpret its future, protect, or challenge its current position. Vinyl’s future, and the larger expansion of pressing plants and innovative turntable production around it, largely depend on processes of cultural and status mobility. In the current phase of market expansion, vinyl’s status might be challenged by its own success. Neither a fashion cycle phenomenon, nor simple market conditions explain vinyl’s longevity. Rather, cultural contextualization of vinyl as thing and commodity is crucial for avoiding symbolic pollution and retaining sacred aura.