The paper contributes to the ongoing debate on the natural resource curse, which postulates a negative link between natural resource abundance and economic growth. It shows empirically that resource-rich countries appear to have a less developed financial system and investigates a potential mechanism behind this connection by applying insights from the finance and trade literature. It tests whether the resource sectors’ lower demand for short-term external credit negatively affects financial development. This is done with cross-sectional and panel analysis, using an instrument for credit demand based on exogenous geographic determinants. The results, however, suggest that poor economic diversity rather than firms’ credit demand drives the detrimental effect of resources on finance.

The green paradox conveys the idea that climate policies may have unintended side effects when taking into account the reaction of fossil fuel suppliers. In particular, carbon taxes that will be implemented in the future induce resource owners to extract more rapidly which increases present carbon dioxide emissions and accelerates global warming. Our results suggest that future carbon taxes may even decrease present emissions if resource owners face increasing marginal extraction costs and if there is a clean energy source that is a perfect substitute and exhibits learning-by-doing (LBD). If the marginal extraction cost curve is sufficiently at, resource owners respond to a future carbon tax with lowering total extraction and only slightly increase present extraction. Moreover, taxation leads to higher energy prices which induces the renewable energy firms to increase output not only in the future, but also in the present because of the anticipated benefits from LBD. This crowds out energy from the combustion of fossil fuels and may outweigh the initial increase in present extraction, leading to less emissions in the present.

This paper points to flaws in Gini decompositions by income sources and population subgroups and to common pitfalls in the interpretation of decomposition results, focusing on methods within the framework of Rao (1969). We argue that within this framework Gini elasticities may provide the only meaningful way to examine the relevance of income sources or population subgroups for total income inequality. Moreover, we show that existing methods are unsuitable to decompose the trend in the Gini coefficient and provide a coherent method to decompose the Gini trend by income sources. We add to the recent trend of multi-decompositions by deriving Gini elasticities from a simultaneous decomposition by income sources and population subgroups.

A large literature has documented top income share series based on income tax statistics using the common methodology established by Piketty (2001, 2003). The disappearance of capital income from the income tax base in many countries poses a major challenge to the comparability of these series both over time and between countries. First, we extend the existing German series including capital gains to 2010, and the series excluding capital gains to 2008. Second, we derive three homogeneous series by simulating legislative definitions of capital income prevailing in Germany between 2001 and 2010. For both simulation and the exclusion of capital gains, we employ a rich data set containing the tax files of all income taxpayers. Third, we construct a composite measure of stock dividends and interest income tax ows as a proxy for capital income missing in the data since 2009. We find that the drop in top income shares obtained from income tax statistics in the crisis year 2009 is largely attributable to the exclusion of capital income from the income tax base.

In a real-effort laboratory experiment to manipulate evasion opportunities, we study whether the moral evaluation of tax evasion is subject to a self-serving bias. We find that tax morale is egoistically biased: Subjects with the opportunity to evade taxes judge tax evasion as less unethical as opposed to those who cannot evade. The detection probability does not affect this result. Further, we do not find moral spillover effects, for example, on legal activities.

We argue that the impact of capital gains taxation on asset pricing depends on the tax awareness of market participants. While institutional investors should be generally well-informed about tax regulations, private investors have only limited tax knowledge and resources. As a result, market reactions on tax law changes may be delayed if a considerable fraction of market participants is not fully tax-aware. In line with our argument, we find evidence that the introduction of a previously announced German flat tax on private capital gains in 2009 resulted in a temporarily strong and significant increase of trading volumes, daily returns and asset prices. Our research implies that tax law changes provide an opportunity for well-informed investors to generate arbitrage benefits. Corresponding to our estimate, the capital gains tax resulted in an increase demand for shares of 160 % as well as in an price surplus of about 7.4 % within the last two trading days 2008.

This paper studies the bank-sovereign link in a dynamic stochastic general equilibrium set-up with strategic default on public debt. Heterogeneous banks give rise to an interbank market where government bonds are used as collateral. A default penalty arises from a breakdown of interbank intermediation that induces a credit crunch. Government borrowing under limited commitment is costly ex ante as bank funding conditions tighten when the quality of collateral drops. This lowers the penalty from an interbank freeze and feeds back into default risk. The arising amplification mechanism propagates aggregate shocks to the macroeconomy. The model is calibrated using Spanish data and is capable of reproducing key business cycle statistics alongside stylized facts during the European sovereign debt crisis.

For the timely detection of business-cycle turning points we suggest to use mediumsized linear systems (subset VARs with automated zero restrictions) to forecast the relevant underlying variables, and to derive the probability of the turning point from the forecast density as the probability mass below (or above) a given threshold value. We show how this approach can be used in real time in the presence of data publication lags and how it can capture the part of the data revision process that is systematic. Then we apply the method to US and German monthly data. In an out-of-sample exercise (for 2007-2012/13) the turning points can be signalled before the official data publication confirms them (but not before they happened in reality).

This paper tests whether the Ricardian Equivalence proposition holds in a life cycle consumption laboratory experiment. This proposition is a fundamental assumption underlying numerous studies on intertemporal choice and has important implications for tax policy. Using nonparametric and panel data methods, we find that the Ricardian Equivalence proposition does not hold in general. Our results suggest that taxation has a significant and strong impact on consumption choice. Over the life cycle, a tax relief increases consumption on average by about 22% of the tax rebate. A tax increase causes consumption to decrease by about 30% of the tax increase. These results are robust with respect to variations in the difficulty to smooth consumption. In our experiment, we find the behavior of about 62% of our subjects to be inconsistent with the Ricardian proposition. Our results show dynamic effects; taxation inuences consumption beyond the current period.

Local business profits respond to local business tax (LBT) rates that vary across municipalities. We estimate that a one percent increase in the LBT rate decreases the LBT base by 0.45 percent, based on the universe of German LBT return files, which include corporations and unincorporated businesses. However, the fiscal equalization scheme largely compensates municipalities for the loss in the LBT base when they increase the LBT rate. Our estimates suggest that using tax revenue data instead of tax return data, as commonly done in the literature, results in a significant bias of the elasticity away from zero

The ECB's one size monetary policy is unlikely to fit all euro area members at all times, which raises the question of how much monetary policy stress this causes at the national level. I measure monetary policy stress as the difference between actual ECB interest rates and Taylor-rule implied optimal rates at the member state level. Optimal rates explicitly take into account the natural rate of interest to capture changes in trend growth. I find that monetary policy stress within the euro area has been steadily decreasing prior to the recent financial crisis. Current stress levels are not only lower today than in the late 1990s, they are also in line with what is commonly observed among U.S. states or pre-euro German Länder.

We study contracting between a consumer and an expert. The expert can invest in diagnosis to obtain a noisy signal about whether a low–cost service is sufficient or whether a high–cost treatment is required to solve the consumer’s problem. This involves moral hazard because diagnosis effort and signals are not observable. Treatments are contractible, but success or failure of the low–cost treatment is observed only by the consumer. Payments can therefore not depend on the objective outcome but only the consumer’s report, or subjective evaluation. A failure of the low–cost treatment delays the solution of the consumer’s problem by the high–cost treatment to a second period. We show that the first–best solution can always be implemented if the parties’ discount rate is zero; an increase in the discount rate reduces the range of parameter combinations for which the first–best can be obtained. In an extension we show that the first–best is also always implementable if diagnosis and treatment can be separated by contracting with two different agents.

We revisit medium- to long-run exchange rate determination, focusing on the role of international investment positions. To do so, we make use of a new econometric framework accounting for conditional long-run homogeneity in heterogeneous dynamic panel data models. In particular, in our model the long- run relationship between effective exchange rates and domestic as well as weighted foreign prices is a homogeneous function of a country's international investment position. We find rather strong support for purchasing power parity in environments of limited negative net foreign asset to GDP positions; furthermore, long-run exchange rate equilibria may have little relation to purchasing power parity outside such environments. We thus argue that the purchasing power parity hypothesis holds conditionally, but not unconditionally, and that international investment positions are an essential component to characterizing this conditionality.

Cogan et al. (2009, 2010) claim that the stimulus package passed by the United States Congress in February 2009 had a multiplier far below one. However, the stimulus’ multiplier strongly depends on the assumed monetary policy response. Based on official statements from the Fed chairman, the economic outlook, past behavior of the FOMC, optimal policy considerations, and financial market expectations, we find that in February 2009 a period of monetary accommodation of three years would have been a reasonable prediction. This implies that an appropriate real time assessment of the stimulus’ effects would have been more optimistic than Cogan et al.’s.

Recent studies indicate that the natural resource curse, that is, the negative link between resource abundance and growth, may operate through a country’s financial system. Scholars show that resource-abundant economies suffer from lower financial development, which may indirectly affect welfare. The present study provides an explanation for this financial channel. It argues that resource-rich countries are likely to have a concentrated export structure, causing a reduction of the financial system’s size due to volatility and the associated high real interest rates. The paper shows empirically that export concentration tends to weaken private credit to GDP. The analysis builds on cross-sectional and panel data from 93 countries for the period 1970-2007. The direction of causality is tested with an instrumentation strategy using geographic and geospatial variables as well as dynamic panel techniques.

We examine the effects of increased international integration of both goods and financial markets on business cycle dynamics. To do so, we develop a new econometric framework for modelling cross-country spillovers in which the magnitude of these spillovers is an empirically determined function of the degree of a country's integration with international goods and financial markets. Our results suggest that the magnitude of cross-country spillovers for most country pairs has been increasing with strengthened goods and financial markets integration.

Country-by-Country Reporting (CbCR) soll für (insb. Steuer-)Behörden oder für die Öffentlichkeit Transparenz über die regionale Verteilung von Produktionsfaktoren, Gewinnen und Steuerzahlun-gen schaffen und so Steuervermeidungsstrategien aufdecken. Die folgende Analyse zeigt die Ent- stehungsgeschichte des CbCR und stellt die Möglichkeiten eines allgemein verpflichtenden CbCR für multinationale Unternehmen seinen Grenzen und Risiken gegenüber. Unsere Analyse zeigt, dass das CbCR die Informationsansprüche der Adressaten nicht in der Weise befriedigen kann, wie seine Befürworter es propagieren. Auch CbCR als ein weiterer Rechenversuch ändert nichts daran, dass Gewinne von multinationalen Unternehmen nicht lokal zuordbar sind. Ein auf wenige, nachprüfbar zu ermittelnde Kernelemente reduziertes CbCR würde – ob freiwillig, als industrielle Selbstver-pflichtung oder als gesetzliche Pflicht – für die Informationsadressaten den gleichen Nutzen bringen wie das bislang vorgeschlagene detaillierte CbCR. Ein solches Basis-CbCR würde beispielsweise die Umsatzerlöse, die Arbeitnehmerzahl und/oder die Lohnsumme, das Sachanlagevermögen und/oder die Abschreibungen darauf sowie die gezahlten Ertragsteuern und/oder den Steueraufwand je Land ausweisen, nicht aber das Einkommen vor Steuern.

Previous studies find that past unemployment reduces life satisfaction even after reemployment for non-monetary reasons (unemployment scarring). It is not clear, however, whether this scarring is only caused by employment-related factors, such as worsened working conditions, or increased future uncertainty as regards income and employment. Using German panel data, we identify non- employment-related scarring by examining the transition of unemployed people to retirement as a life event after which employment-related scarring does not matter anymore. We find evidence for non-employment-related non-monetary unemployment scarring for people who were unemployed for the first time in their life directly prior to retirement, but not for people with earlier unemployment experiences.

In this paper, we conceptualize Open Data ecosystems by analysing the major stakeholders in the UK. The conceptualization is based on a review of popular Open Data definitions and business ecosystem theories, which we applied to empirical data using a timeline analysis. Our work is informed by a combination of discourse analysis and in-depth interviews, undertaken during the summer of 2013. Drawing on the UK as a best practice example, we identify a set of structural business ecosystem properties: circular flow of resources, sustainability, demand that encourages supply, and dependence developing between suppliers, intermediaries, and users. However, significant gaps and shortcomings are found to remain. Most prominently, demand is not yet fully encouraging supply and actors have yet to experience fully mutual interdependence.

We investigate the hypothesis of failed integration and low social mobility of immigrants. For this purpose, an intergenerational assimilation model is tested empirically on household survey data and validated against administrative data provided by the Italian Embassy in Germany. In line with previous studies, we confirm substantial inequality of educational achievements between immigrants and natives. However, we find that the children of Italian immigrants exhibit fairly high intergenerational mobility. Furthermore, holding parental education constant, Italian second generation immigrants show no less opportunities than natives to achieve high schooling degrees. These findings suggest a rejection of the failed integration hypothesis.