Optimal research and development and the cost of business cycles

While research and development (R&D) investment has been procyclical in the post-war period, recent literature suggests that the optimal path for R&D is countercyclical, and that the economy would be better off by subsidizing R&D in recessions. The objective of this paper is to analyze the welfare effects of distortions in the intertemporal allocation of R&D resources and to compare diverse policy interventions so as to improve social welfare. To this end, we introduce a calibrated dynamic stochastic general equilibrium model with Schumpeterian endogenous growth that is capable of explaining the observed procyclicality of R&D. Our results show that the cost of business cycles is lower in the decentralized economy with procyclical R&D than in the efficient allocation with countercyclical R&D. This is because the suboptimal propagation of shocks in the decentralized equilibrium offsets some of the existing steady-state distortions. In this second-best context, countercyclical R&D subsidies have no positive effect on welfare. In contrast, fiscal policies aimed at restoring the optimal steady-state produce large welfare gains.     

“A profit table or a profit calculator?” A note on the design of Cournot oligopoly experiments

We report on an experiment conducted to evaluate the effects of varying the way in which market information is presented to participants in laboratory Cournot duopolies. We find that the most standard variations, which are the use of a profit table or a profit calculator, yield indistinguishable performance. However, the addition of a best-response option to the profit calculator tends to increase aggregate output to the Cournot level and decrease the incidence of tacit collusion.     

Continuous-time mean-variance portfolio optimization in a jump-diffusion market

In this paper, we take up an approach of (Lindberg, in Bernoulli, 15(2):464–474, 2009) who introduced a new parameterization of the Black–Scholes model that allows for an easy solution of the continuous-time Markowitz mean-variance problem. We generalize the results of (Lindberg, in Bernoulli, 15(2):464–474, 2009) to a jump-diffusion market setting and slightly correct the proof and the assertion of the main result. Further, we demonstrate the implications of the Lindberg parameterization for the stock price drift vector in different market settings, analyse the dependence of the optimal portfolio from jump and diffusion risk and finally indicate how to use the method. We particularly also show how the optimal strategy can be obtained with the restricted use of historical data.     

Optimal macroeconomic policies in a financial and economic crisis: a case study for Slovenia

In this paper, we study different and, in particular, “optimal” reactions of fiscal (and to some extent monetary) policies to the financial and economic crisis of 2007–2009 in Slovenia, a small open economy that is part of the Economic and Monetary Union (EMU). Using an econometric model of the Slovenian economy, we simulate the effects of the global crisis under the assumption of no-policy reactions, i.e. assuming that macroeconomic policies are conducted without attempting to deal with the effects of the crisis. Next, we study the possibilities of fiscal policy reducing or even annihilating the effects of the crisis. We also investigate the optimal reaction of fiscal policies based on the assumption that Slovenian policy-makers behave as though they were optimizing an objective function. We show that optimal policies call for only a very modestly active countercyclical role of fiscal policies. There are strong trade-offs between countercyclical fiscal policies and the requirements of fiscal solvency.     

Why should Austrian economists be pluralists?

Peter Boettke (2007) argues that economists need not act pluralistically in order for pluralism to thrive in the marketplace of economic ideas. From a market process perspective, Boettke sees intellectual diversity and openness as catallactic outputs, not inputs—emergent by-products of academic specialization and trade. To expect individual scholars to behave in a pluralistic manner is unnecessary and “completely inappropriate” since it detracts from their central task: “to commit themselves to an approach and pursue it doggedly, even in the face of great doubt and resistance by one’s peers” (Boettke 2007). This paper proposes a Smithian revision of Boettke’s position. The author argues that scholarly pluralism is best understood as a constitutional rule of academic life—a virtue ethic that promotes learning and intellectual freedom by mitigating tyranny and autarky in the republic of science. Drawing from the writings of Adam Smith, Friedrich Hayek, Deirdre McCloskey, Bruce Caldwell, James Buchanan, Don Lavoie, and Boettke himself, the author argues that scholarly pluralism has been, and continues to be, a necessary condition for the flourishing of Austrian economists as free, responsible, efficacious thinkers.     

Frühreha nach Apoplex: Je früher desto besser

Herausforderung an ein multidisziplin?res Team – Um m?glichst gro?e Erfolge zu erzielen, muss die Frührehabilitation nach einem Schlaganfall bereits auf der Stroke Unit beginnen. Sabine Kemmler schildert die gro?e Herausforderung an die Versorgung von Schlaganfall-Patienten für Pflegekr?fte.     

PAALiativ: Technik als Chance?

Assistenztechnologie im Wohnumfeld — Die Terminalphase des Lebens in h?uslicher Umgebung verbringen zu k?nnen entspricht dem Wunsch der meisten Menschen. In Oldenburg startete mit PAALiativ ein Projekt, mit dem exemplarisch nach M?glichkeiten der technischen Unterstützung für ein selbstbestimmtes Leben Schwerstkranker gesucht wird.     

Süchtige Sammler

Wohnungsdesorganisation bei Sucht - Chaotische Wohnverh?ltnisse lassen sich oft auf eine Suchterkrankung zurückführen. Dabei kann man einen deutlichen Unterschied zwischen Wohnungen von Menschen mit einer Kaufsucht und denen von Menschen mit psychischen St?rungen und Verhaltensst?rungen durch psychotrope Substanzen beobachten.