The risk-return trade-off in human capital investment

In this paper, we analyze investments in human capital in a way which is standard for financial assets, but not (yet) for human capital assets. We study mean-variance plots of human capital assets. We compare the properties of human capital returns using a performance measure and by using tests for mean-variance spanning. Fields differ strongly not only in common rates of return, but also in return per unit of risk. We identify a range of educations that are efficient in terms of investment goods, and a range of educations that may be chosen for consumption purposes.     

Explaining the size differences of exporter premia: theory and evidence

Two decades of research have established pronounced exporter productivity premia (EPP) and exporter size premia (ESP). Yet, we do not know why such exporter premia differ so widely in magnitude across countries or sectors? We take this question to the theory and to the data. We derive the sectoral EPP and ESP in a standard heterogeneous firms trade model and apply the insights from the model to guide our empirical investigation of detailed Danish firm-level data. We show that a significant share of the observed variation in EPP and ESP across sectors can be accounted for by sector differences in the underlying variation in productivity dispersion, variable trade costs, the ratio of fixed export costs to fixed costs of production, and the elasticity of demand.     

Ist der Fahrplan der Energiewende noch einzuhalten?

The German energy transition represents a policy-driven, sustainability-oriented restructuring of both supply- and demand-side components of the entire energy system by 2050. Whereas the development of renewable energies in the electricity sector is right on track, due to the feed-in tariffs of the German Renewable Energy Sources Act, many other crucial requirements for a successful transition are not, amongst others the improvement of energy effi ciency and the decarbonisation of the transport sector. Contrary to the public discussion, the primary future challenges do not consist in limiting electricity prices or abandoning feed-in support schemes, but rather in coordinating the variety of actors as well as appropriately matching the different system elements (grids, technologies, energy sectors, demand and supply side, etc.). Much remains to be done. By highlighting some examples like the need to take into account future implications of climate change for the energy sector, the consequences of the current crisis in the European Union’s emissions trading scheme and the need for a cautious adjustment of the EEG, the paper argues that the major challenges regarding the German energy transition mainly go beyond the current policy-driven and short-term discussion of energy prices. Germany’s pioneering attempt to integrate steadily increasing share of non-dispatchable electricity from renewable sources is challenging the stability of the system. Several characteristics in the current selfregulating system are identifi ed and analysed, which reveal themselves as potential weaknesses or shortcomings in the upcoming system.     

Können Fiskalräte die europäische Schuldenkrise lösen?

This article analyses the role of independent fiscal institutions (IFIs) in dealing with the debt crisis in Europe. IFIs take the role of a fiscal watchdog by producing their own (or assessing the government’s) budget and macroeconomic forecast and have recently spread across many industrialized countries. Empirical evidence suggests that IFIs can contribute to solid public finances in conjunction with fiscal rules if these institutions are truly independent, have a clear mandate and access to sufficient resources, as well as a strong media impact.     

The IMF and the countries of the Council for Mutual Economic Assistance

In November 1981 Hungary and, one week later, Poland applied for membership of the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank). These applications have highlighted a subject which had been neglected for quite some time. This analysis deals with the problems and consequences which arise from the membership of countries of the Council for Mutual Economic Assistance (Comecon)—the economies of which largely conform to principles of central economic planning—in IMF, an institution organized according to market principles.