KfW/ZEW CO2 Panel: Vermeiden oder kaufen – Deutsche Unternehmen im Emissionshandel

The European Emission Trading Scheme (EU-ETS) is the first large-scale and inter-regional trading scheme for greenhouse gas emissions. It is seen as the central instrument of European climate policy. After a first testing-phase (2005–2007), the second trading period of the EU-ETS had started in 2008, with stronger incentives for investment in low-carbon technologies and carbon dioxide abatement. However, there is hardly any evidence how emissions trading fares in practice. The KfW/ZEW CO₂ Barometer shows that trading of emission permits is actively used by 75 percent of German companies, but the price-signals that stem from the EU-ETS were relatively weak so far—too weak to set strong incentives for carbon dioxide emission reductions on the company-level. Also in the case of the ‘clean development mechanism’ (CDM) which was introduced to promote emission reductions in developing counties, there is need for further development.     

Robust political economy

This paper introduces the idea of “robust political economy.” In the context of political economic systems, “robustness” refers to a political economic arrangement's ability to produce social welfare-enhancing outcomes in the face of deviations from ideal assumptions about individuals' motivations and information. Since standard assumptions about complete and perfect information, instantaneous market adjustment, perfect agent rationality, political actor benevolence, etc., rarely, if ever actually hold, a realistic picture and accurate assessment of the desirability of alternative political economic systems requires an analysis of alternative systems' robustness. The Mises-Hayek critique of socialism forms the foundation for investigations of robustness that relax ideal informational assumptions. The Buchanan-Tullock public choice approach complements this foundation in forming the basis for investigations of robustness that relax ideal motivational assumptions. JEL Code B53, P16, P26     

Science-based entrepreneurship education as a means for university-industry technology transfer

This paper explores the potential of university-industry technology transfer through science-based entrepreneurship education (SBEE). The scientific literature focuses mostly on enabling university-industry technology transfer via university-industry collaboration in research, and not so much in (science) education. The paper identifies four strands of relevant literature for further theorizing SBEE principles to research its contribution to industry-technology transfer: 1. Embedding entrepreneurship education in universities; 2. Balancing theory and practice of entrepreneurship education; 3. Cultivating an entrepreneurial mindset through entrepreneurship education; and 4. Creating spin-offs through entrepreneurship education. One of the main theoretical contributions of this paper is, that SBEE is different from regular entrepreneurship education in its need for being firmly embedded in a science, technology and R&D environment, both within and outside the university. This is important in order to give SBEE students the opportunity to gain experience with handling the hurdles for successful university-industry technology transfer. The main empirical finding is that elements in the program, related to for example the balance between teaching entrepreneurship through theory and experiential learning, are not systematically covered. It means that fundamental questions such as: Can entrepreneurship be indeed taught? Which elements of entrepreneurship can be taught through theory, and which ones must be experienced in practice? are currently left unanswered. Systematic coverage of these questions enables a better exploitation of the possibilities that SBEE offers for university-industry technology transfer.

     

The impact of endogenous tax treaties on foreign direct investment: theory and evidence

Abstract .  This paper investigates the effect of tax treaties on bilateral stocks of outward FDI. For this purpose we employ a numerically solvable general equilibrium model of trade and multinational firms to study the impact of tax treaties on both welfare and outward FDI. The model indicates under which factor endowment configurations countries gain in welfare when implementing a tax treaty. This motivates an empirical specification of the endogenous selection into implementing new tax treaties. Using data of bilateral OECD outward FDI between 1985 and 2000, we find a significant negative impact of newly implemented tax treaties on outward FDI stocks.     

Aid versus Trade: Some Considerations

Trade is the engine of development.
The biggest thing the developed world can do to alleviate poverty is remove trade barriers. The benefits of that are infinitely better than direct aid.
It is trade, not aid, that holds the key to creating jobs and raising incomes.
…we are very clear that it is through trade, much more than through aid, that we can enable the poorest people in the poorest countries of our world to start that journey of modernization, of economic reform—a pathway out of poverty and into prosperity.     

Cross subsidies in the telephone network after divestiture

Those who do not understand history are condemned to repeat it. The current discussion of cross-subsidies by the RBOCs threatens to reiterate all of the confusions of pre-divestiture discussions of AT&T's presumed cross subsidies. More careful analysis of current conditions reveals that the RBOC's competitive activities are not being cross subsidized out of the local rate base. If they are being subsidized, the subsidies come from the IX carriers.     

Effects of time horizon and asset condition on the profitability of technical trading rules

In much of the literature, the debate over technical trading strategies has centered around the question of whether an actively managed portfolio, controlled by a technical indicator, can outperform a passively managed portfolio. Typically, the time horizon is considered to be years. Additionally, the trader is assumed to use a technical trading strategy that is independent of asset conditions. These assumptions may not correspond well with reality. Traders often have much shorter time horizons and may switch between rebalancing or trading strategies on the basis of perceived shifts in market condition. This paper presents a study of the profitability of technical trading rules as a function of asset state or condition. Several common technical trading strategies were run on 296 stocks over a 15 year period. Strategies were run with 1 month rolling time horizons, significantly shorter than those used in similar studies in the literature. Stocks were segmented based on volatility and volume, which allowed for the examination of a strategy’s performance in different asset conditions. Several strategies were demonstrated to have consistently better risk-to-reward ratios under specific asset conditions and short time horizons. This finding helps to explain why some practitioners implement technical trading strategies.     

Bargaining solutions with non-standard objectives

I examine the pure-strategy solutions of the sealed-bid bargaining game with incomplete information, when the buyer's and seller's objectives are other than the standard objective, namely maximization of expected profit. The motivation for this exploration lies in three problems of the standard formulation: the necessity of assuming common priors, the existence of uncountably many Nash equilibria, with no means for the players to coordinate on any one of them, and the uncertain relationship between these equilibria and observed behavior in bargaining experiments. Specifically, I consider two alternative objectives: minimization of maximum regret, and maximization of maximum profit. The solution concept here is not Nash equilibrium, but rather -individually rational strategy bundle. For that reason, I shall, where appropriate, use the word “solution” in place of “equilibrium.” Yet we find that the notion of Nash Equilibrium reappears, in a sense to be explained. In the minimax-regret case I find (in contrast to the case of expected profit) a unique solution; this solution reduces, for priors with coincident support, to the linear equilibrium of Chatterjee-Samuelson. In the maximum-profit case there are many solutions; they turn out to be slight generalizations of the one-step equilibria of Leininger-Linhart-Radner.     

Rethinking an old empirical puzzle: econometric evidence on the forward discount anomaly

Using both semiparametric and parametric estimation methods, this paper corroborates earlier findings of fractionally integrated behaviour in the forward premium. Two new explanations are also proposed to help reconcile earlier conflicting empirical evidence on the time series properties of the forward premium. Traditional regression approaches used to test the forward rate unbiasedness hypothesis are then evaluated, including regression in levels, in returns (Fama's, 1984 , regression), and in error‐correction format. Interesting statistical and/or interpretive implications are found in all three cases. For example, the predictions of the appropriate nonstandard limit theory are consistent with many of the standard empirical results reported from Fama's regression, including the commonly occurring, yet puzzling negative correlations between spot returns and the forward premium. It is suggested that the principal failure of unbiasedness, may be due instead to the difference in persistence between these two series. Copyright © 2001 John Wiley & Sons, Ltd.     

Computing equilibria of GEI by relocalization on a Grassmann manifold

An algorithm is described to compute equilibria of the general economic model with incomplete asset markets, that is, of GEI. The algorithm is based on the existence of a route of zeros of a homotopy whose domain includes the price simplex and a Grassmann Manifold. This route is followed, in effect, by localizing and following diffeomorphic pieces in Euclidean space, and by relocalizing as is necessary.