Volkswirtschaft - Open Access LMU - Teil 01/03 Archiv

We explore the efficiency of the forward reichsmark market in Vienna between 1876 and 1914. We estimate ARIMA models of the spot exchange rate in order to forecast the one-month-ahead spot rate. In turn we compare these forecasts to the contemporaneous forward rate, i.e., the market's forecast of the future spot rate. We find that shortly after the introduction of a "shadow" gold standard in the mid-1890s the forward rate became a considerably better predictor of the future spot rate than during the prior flexible exchange rate regime. Between 1907 and 1914 forecast errors were between a half and one-fourth of their pre-1896 level. This implies that the Austro-Hungarian Bank's policy of defending the gold value of the currency was successful in improving the efficiency of the foreign exchange market.

It is well known from the literature that a unionisation of labour markets leads to an increase in wages and a decrease in employment. However, in these models human capital formation is usually taken as given. This paper internalises the education decision and shows that a unionisation of the labour market for unskilled workers will also lead to an inefficiently low education level. We discuss the effects of an education subsidy. It will turn out that both the way of financing and the reaction of the trade union to tax rate changes are crucial for the employment and welfare effects.

This paper is a thoroughly revised and extended version of an article firstly published in the anthology "Moderne Wirtschaftsgeschichte" (München: Oldenbourg) in 1996. This book is an introduction to modern economic history for historians and economists. Accordingly this paper has to two objectives: Firstly, it presents economic theory explaining business cycles to historians. Secondly, for economists it illustrates both the possibilities and problems to detect and understand business cycles in the past. The paper is organised as follows: Section 1 sets the scene. It describes the approach of business cycles and provides a number of essential definitions. The next section shortly illustrates business cycles in the past 200 years in Germany (2). Section 3 deals with business cycle theory. To start with, it highlights the long tradition of theories that have sought to explain business cycles (3.1). Secondly it explains the "standard paradigm" (3.2). Thirdly it reviews the latest developments in business cycle theory (3.3). Section 4 discusses the application of business cycle theory in historical research. The last section deals with open questions and unsolved problems from a historian's point of view.

Models with multiple equilibria are a popular way to explain currency attacks. Morris and Shin (1998) have shown that, in the context of those models, unique equilibria may prevail once noisy private information is introduced. In this paper, we generalize the results of Morris and Shin to a broader class of probability distributions and show - using the technique of iterated elimination of dominated strategies - that uniqueness will hold, even if we allow for sunspots and individual uncertainty about strategic behavior of other agents. We provide a clear exposition of the logic of this model and we analyse the impact of transparency on the probability of a speculative attack. For the case of uniform distribution of noisy signals, we show that increased transparency of government policy reduces the likelihood of attacks.

Daily data from the German and U.S. equity markets before and after the introduction of the Euro are used to study the effect of exchange rate regime choices on equity markets. It is found that, since the introduction of the Euro, the volatility and the persistence of the German stock index have fallen significantly relative to those of the U.S. index. However, the switch in exchange rate arrangement appears to have no significant implication for the causal relationships - both the mean and varianc causalities - between the two equity markets.

More than 10 years ago, Amartya Sen estimated than some 100 million women are 'missing' as a result of excess female mortality in parts of the developing world, most notably South Asia, China, West Asia, and parts of North Africa (Sen, 1989; Sen 1990). Coale (1991) and Klasen (1994) used more precise demographic techniques and arrived at figures that varied between 60 million (Coale) and 90 million (Klasen). All three estimates confirmed the enormous toll excess female mortality was exacting on women in these parts of the world. All these estimates 'missing women' were based on demographic information of the 1980s and early 1990s. Since then, there has been considerable speculation about current trends of gender bias in mortality with some observers suggesting a falling intensity while others predicted the opposite (e.g. Klasen, 1994; Das Gupta and Mari Bath, 1997; Dreze and Sen, 1995; Mayer, 1999; Croll, 2000). Figure 1 shows recent projections by the United Nations Population Division of the sex ratio in the world and in the regions where males outnumber females. These estimates suggest that the sex ratio in the female deficit regions, after rising steadily since 1960, is estimated to peak in about 1985 and then are believed to decline quite sharply. Given the high share these regions have in the world's total population, a turning point in the global sex ratio, after a similar rise since 1960, is also estimated for 1995.

Using a sample of 21 OECD-countries we measure productivity in top-edge economic research by using data envelopment analysis (DEA). DEA is a tool for evaluating relative efficiency and is widely used when there are multiple inputs and outputs and one lacks a specific functional form of a production function. The publications in 10 economics journals with the highest average impact factor over the time period 1980-1998 are taken as research output. Inputs are measured by R&D expenditures, number of universities with economics departments and (as uncontrolled variable) total population. Under constant returns-to-scale the USA are in dominant position with remarkable distance to other countries. Under variable returns-to-scale the efficiency frontier is created by the USA with most productive scale size (MPSS), and by Ireland and New Zealand, which are technical efficient but scale inefficient. All countries - except the USA - display increasing returns-to-scale, which shows that they have a possibility to improve their efficiency by scaling up their research activities.

Der Aufsatz gibt zunächst einen kurzen Überblick über die Entwicklung des Marktes für Wagniskapital in den USA und in Deutschland. Dann wird gezeigt, mit welchen besonderen Anreiz- und Vertragsproblemen die Finanzierung von Innovationen zu kämpfen hat und welche neuen Instrumente von der Wagniskapitalbranche in den letzten Jahrzehnten entwickelt wurden, um diese Probleme in den Griff zu bekommen. Schließlich diskutieren wir die wichtigsten Argumente für die staatliche Subventionierung von Innovationen und zeigen, in welcher Form die Förderung der Wagniskapitalfinanzierung möglichst effizient erfolgen sollte.

This paper studies the relation between discrete-time and continuoustime principal-agent models. We derive the continuous-time model as a limit of discretetime models with ever shorter periods and show that optimal incentive schemes in the discrete-time models approximate the optimal incentive scheme in the continuous model, which is linear in accounts. Under the additional assumption that the principal observes only cumulative total profits at the end and the agent can destroy profits unnoticed, an incentive scheme that is linear in total profits is shown to be approximately optimal in the discrete-time model when the length of the period is small.

We study the evolution of prices set by duopolists who are uncertain about the perceived degree of product differentiation. Customers sometimes view the products as close substitutes, sometimes as highly differentiated. As the informativeness of the quantities sold increases with the price differential, there is scope for active learning by firms. When information has low value to the firms, they charge the same price as would be set by myopic players, and there is no price dispersion. When firms value information more highly, on the other hand, they actively learn by creating price dispersion. Such price dispersion arises in a cyclical fashion, and is most likely to be observed when the firms' environment changes sufficiently often, but not too frequently. Firms' payoffs are higher when they use correlated pricing strategies. Contrary to what one might expect, such coordination need not hurt consumers, provided they are sufficiently impatient.

This paper presents a dynamic theory of housing market fluctuations. It develops a life-cycle model where households are heterogeneous with respect to income and preferences, and mortgage lending is restricted by a down-payment requirement. The market interaction of young credit-constrained households with older or richer unconstrained households generates the following results. (1) Current income of young credit-constrained households affects housing prices independently of aggregate income. (2) Housing prices and the number of housing transactions are positively correlated. (3) Housing prices over-react to income shocks. (4) A relaxation of the down-payment constraint triggers a boom-bust cycle. These results are consistent with patterns observed in the US and the UK.

A brief statement of the costumary foundations of economic processes and institutions and a review of theoretical approaches to custom.

Wage formation is often analyzed by assuming that wage differentials reflect productivity differentials intrinsic to the workers, like differences in skill or qualification. Observed industry and firm effects on wages suggests, however, that wage differentials may result from causes rather unrelated to intrinsic productivity. This paper considers the polar case of homogeneous labor. The wage differentials emerging here are, thus, unrelated to individual differences. The model used is of an economy with a segmented labor market in which the primary sector industries are characterized by high turnover costs. This induces firms to pay efficiency wages reflecting turnover costs. The turnover case offers some rather surprising yet straightforward conclusions regarding efficiency, discrimination and taxation: Workers capture job rents; wage dispersion is too high; considerable wage differentials may arise from infinitesimally small differences in productivity; and a progressive wage tax will be welfare-enhancing.

We show that concerns for fairness may have dramatic consequences for the optimal provision of incentives in a moral hazard context. Incentive contracts that are optimal when there are only selfish actors become inferior when some agents are concerned about fairness. Conversely, contracts that are doomed to fail when there are only selfish actors provide powerful incentives and become superior when there are also fair-minded players. These predictions are strongly supported by the results of a series of experiments. Furthermore, our results suggest that the existence of fair actors may be an important reason why many contracts are left deliberately incomplete.