Kiel Institute for the World Economy

Displaying 1-28 of 28 results

  • White Papers // May 2011

    The Effect Of Inflation On Real Commodity Prices

    Recent research has shown that economic conditions have an important effect on real commodity prices. The authors quantify the contribution of fluctuations in inflation to this particular link. In the data, a temporary rise in inflation causes real commodity prices to rise, as does a rise in trend inflation. They...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2011

    Optimal Inflation And Firms? Productivity Dynamics

    Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. The author presents a New Keynesian model with growth in firm-specific productivity and firm turnover that captures these two phenomena. The model predicts that the optimal rate of long-run...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2011

    Rising Import Demand In China: Cui Bono And Why?

    The paper measures income elasticity of demand for manufacturing imports in China since 1990 disaggregated by major trading partners such as the US, Japan, Germany and rest of the EU. German exporters seem to have benefited from the highest demand elasticity. The paper proposes explanatory factors such as a high...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2011

    Trend Growth And The Dynamic Effects Of Government Spending

    The paper studies the macroeconomic effects of government spending shocks in an economy characterized by positive trend growth. It shows that the lower is the trend growth rate the less inflationary are government spending shocks and vice versa. Moreover, on impact output is higher but exhibits less persistence the lower...

    Provided By Kiel Institute for the World Economy

  • White Papers // Nov 2010

    A Conditionally Heteroskedastic Global Inflation Model

    This paper proposes a multivariate model of inflation with conditionally heteroskedastic common and country-specific components. The model is estimated in one-step via Quasi-Maximum Likelihood for the G7 countries for the period Q1-1960 to Q4-2009. It is found that various model specifications considered fit well the first and second order dynamics...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jul 2010

    A Two-Sector Model Of Public Investment And Growth

    The authors consider a two-sector economy, where public infrastructure unevenly affects the productivity of the sectors. Private and public capitals are produced with different technologies, and the sector producing the infrastructure is not benefiting from its services. The government provides both infrastructure investment and a flow of intermediate goods, enhancing...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2010

    Religious Orders And Growth Through Cultural Change In Pre-Industrial England

    The authors advance the hypothesis that cultural values such as high work ethics and thrift, "The Protestant ethic" according to MaxWeber, may have been diffused long before the Reformation, thereby importantly affecting the pre-industrial growth record. The source of pre-Reformation Protestant ethics, according to the proposed theory, was the Catholic...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2010

    Engel's Law And Growth With Directed Technical Change

    This paper presents a tractable endogenous two-sector growth model with non-Gorman intra-temporal preferences and directed technical change. One of the two consumption goods is a necessity, whereas the other is a luxury. If the economy starts with a low initial knowledge stock, households are relatively poor and a high expenditure...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2010

    Rising R&D Intensity And Economic Growth

    Over the past decades, private R&D spending in the US and other developed countries has been growing faster than GDP. In the United States, for example, R&D expenditures (excluding those funded by the federal government) have grown from 0.63% of GDP in 1953 to 1.95% of GDP in 2007, i.e....

    Provided By Kiel Institute for the World Economy

  • White Papers // Apr 2010

    Firm Heterogeneity, Credit Constraints, And Endogenous Growth

    This paper is concerned with the role of firm heterogeneity under credit constraints for economic growth. The authors focus on firm size, innovativeness and credit constraints in a semi-endogenous growth model reflecting recent empirical findings on firm heterogeneity. It allows for an explicit solution for transitional growth and balanced growth...

    Provided By Kiel Institute for the World Economy

  • White Papers // Apr 2010

    Access To Finance And Exporting Behavior In Transition Countries

    The authors analyze the link between firms' access to finance and their decisions to enter and exit the export market. They employ the Business Environment and Enterprise Performance Survey (BEEPS) conducted in 2005 and 2008-2009 to 28 countries in Eastern Europe and Central Asia. They find that more productive, foreign...

    Provided By Kiel Institute for the World Economy

  • White Papers // Mar 2010

    Globalization, Pass-Through And Inflation Dynamic

    An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. The authors present an extension of Dornbusch (1987)'s model to analyze the extent to...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2010

    FDI Liberalization, Firm Heterogeneity And Foreign Ownership: German Firm Decisions In Reforming India

    The paper investigates the role of firm-level productivity and industry-level R&D for MNEs' choice of undertaking FDI, and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2010

    FDI And Income Inequality: Evidence From A Panel Of US States

    This paper employs state-level panel data to explore the relationship between inward Foreign Direct Investment (FDI) and income inequality in the United States. Using panel co-integration techniques that allow for cross-sectional heterogeneity, cross-sectional dependence, and endogenous repressors, the authors find that the short-run effects of FDI on income inequality are...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2010

    Firm Heterogeneity, Industry Characteristics And Types Of FDI: The Case Of German FDI In The Czech Republic

    In addition to firm and industry characteristics, the heterogeneity of Foreign Direct Investment (FDI) has to be taken into account when analyzing the determinants of outward FDI. The authors combine two firm-specific datasets on German firms with subsidiaries and joint ventures in the Czech Republic, compared to a control group...

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2009

    Do We Face A Credit Crunch?

    The weakness of credit growth in the United States and Europe has given rise to concerns that the financial crisis has led to a credit crunch which has deepened the recession in the real economy and poses a serious threat to the recovery that seems to have started in the...

    Provided By Kiel Institute for the World Economy

  • White Papers // Nov 2009

    FDI By Early Movers, Followers And Latecomers: Timing Of Entry By German Firms During Transition In The Czech Republic

    Theoretical considerations suggest that the option of waiting under conditions of uncertainty affects the relative importance of firm-level productivity and distance-related transaction costs as driving forces of FDI. Yet the timing of FDI has received little attention in the empirical literature on FDI determinants. To help close this gap, the...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Imports, Pass-Through, And The Structure Of Retail Markets

    The authors construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. They are especially interested in studying the degree of pass-through of import into retail prices and the effects of retail market regulation. The paper shows...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Relationship Banking Within The Irish SME Sector And Its Implication

    Relationship banking involves the provision of financial services by an intermediary that invests in obtaining customer-specific information, often proprietary in nature; and evaluates the profitability of these investments through multiple interactions with the same customer over time and/or across products (Boot, 2000). The authors assess the presence and impact of...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Domestic Repercussions Of Different Types Of FDI: Firm-level Evidence For Taiwanese Manufacturing

    It is widely feared that outward FDI gradually hollows out domestic manufacturing and displaces local workers. The authors address this concern by drawing on exceptionally informative firm-specific data on Taiwanese multinationals in manufacturing. In particular, they assess whether repercussions at home depend on the size, location and type of outward...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2009

    Vertical FDI Versus Outsourcing: The Role Of Host Country Human Capital

    The decision to make or buy an input is usually studied with reference to the home country. However, since the offshored input is produced in a host country, there is a strong reason to believe that the host country factors would also influence the organization decision of offshore production. In...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2009

    The Economic Drivers Of Human Trafficking: Micro-Evidence From Five Eastern European Countries

    Human trafficking is a humanitarian problem of global scale, but quantitative research on the issue barely exists. This paper is a first attempt to explore the economic drivers of human trafficking and migrant exploitation using micro data. The authors argue that migration pressure combined with informal migration patterns and incomplete...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2009

    Industrialization In Malaysia: Changing Role Of Government And Foreign Firms

    This paper examines the changing role of government and foreign firms in Malaysia's industrialization process. Economists have held different views of the role of government in industrialization. Some believed that the developing world was full of market failures and the only way in which poor countries could escape from their...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2009

    Overseas Links As Export Conduits

    This paper investigates the relationship between exports and overseas links using data from the UK Community Innovation Survey. Overseas vertical and horizontal links are associated with an average increase in export intensity of 74 and 156 percent for vertical and horizontal overseas links respectively. Firm size shows no significant interactions...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2009

    The Role Of Production Technology For Productivity Spillovers From Multinationals: Firm-Level Evidence For Hungary

    This paper analyzes the potential for productivity spillovers from inward foreign direct investment using administrative panel data on firms for Hungary. The authors hypothesise that the potential for spillovers is related to observable characteristics of the production process of foreign affiliates, and evaluate this empirically. They further explore the role...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2009

    Energy Saving Technology Diffusion Via FDI And Trade: A CGE Model Of China

    This paper introduces intra- and inter-sectoral technology diffusion via FDI and imports into a recursive-dynamic CGE model for climate policy analyses. It analyzes China's accession to a Post Kyoto emission regime that keeps global emissions from 2012 on constant. Due to ongoing energy efficiency gains, partly stemming from international technology...

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2008

    Transitional Dynamics In The Solow-Swan Growth Model With AK Technology And Logistic Population Change

    This paper offers an alternative way, based on the logistic population growth hypothesis, to yield transitional dynamics in the standard AK model with exogenous savings rate. Within this framework, the authors show that the dynamics of the capital stock per person and its growth rate can be non-monotonic over time....

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2008

    Unions Power, Collective Bargaining And Optimal Monetary Policy

    The authors study the design of optimal monetary policy (Ramsey policies) in a model with sticky prices and unionized labor markets. Collective wage bargaining and unions monopoly power tend to dampen wage fluctuations and to amplify employment fluctuations relatively to a DNK model with walrasian labor markets. The optimal monetary...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2011

    Rising Import Demand In China: Cui Bono And Why?

    The paper measures income elasticity of demand for manufacturing imports in China since 1990 disaggregated by major trading partners such as the US, Japan, Germany and rest of the EU. German exporters seem to have benefited from the highest demand elasticity. The paper proposes explanatory factors such as a high...

    Provided By Kiel Institute for the World Economy

  • White Papers // Mar 2010

    Globalization, Pass-Through And Inflation Dynamic

    An important aspect of the globalization process is the increase in interdependence among countries through the deepening of trade linkages. This process should increase competition in each destination market and change the pricing behavior of firms. The authors present an extension of Dornbusch (1987)'s model to analyze the extent to...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2010

    FDI And Income Inequality: Evidence From A Panel Of US States

    This paper employs state-level panel data to explore the relationship between inward Foreign Direct Investment (FDI) and income inequality in the United States. Using panel co-integration techniques that allow for cross-sectional heterogeneity, cross-sectional dependence, and endogenous repressors, the authors find that the short-run effects of FDI on income inequality are...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Imports, Pass-Through, And The Structure Of Retail Markets

    The authors construct a model of trade with heterogeneous retailers to examine the effects of trade liberalization on retail market structure, imports and social welfare. They are especially interested in studying the degree of pass-through of import into retail prices and the effects of retail market regulation. The paper shows...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Relationship Banking Within The Irish SME Sector And Its Implication

    Relationship banking involves the provision of financial services by an intermediary that invests in obtaining customer-specific information, often proprietary in nature; and evaluates the profitability of these investments through multiple interactions with the same customer over time and/or across products (Boot, 2000). The authors assess the presence and impact of...

    Provided By Kiel Institute for the World Economy

  • White Papers // Sep 2009

    Domestic Repercussions Of Different Types Of FDI: Firm-level Evidence For Taiwanese Manufacturing

    It is widely feared that outward FDI gradually hollows out domestic manufacturing and displaces local workers. The authors address this concern by drawing on exceptionally informative firm-specific data on Taiwanese multinationals in manufacturing. In particular, they assess whether repercussions at home depend on the size, location and type of outward...

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2008

    Unions Power, Collective Bargaining And Optimal Monetary Policy

    The authors study the design of optimal monetary policy (Ramsey policies) in a model with sticky prices and unionized labor markets. Collective wage bargaining and unions monopoly power tend to dampen wage fluctuations and to amplify employment fluctuations relatively to a DNK model with walrasian labor markets. The optimal monetary...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2009

    Overseas Links As Export Conduits

    This paper investigates the relationship between exports and overseas links using data from the UK Community Innovation Survey. Overseas vertical and horizontal links are associated with an average increase in export intensity of 74 and 156 percent for vertical and horizontal overseas links respectively. Firm size shows no significant interactions...

    Provided By Kiel Institute for the World Economy

  • White Papers // Nov 2010

    A Conditionally Heteroskedastic Global Inflation Model

    This paper proposes a multivariate model of inflation with conditionally heteroskedastic common and country-specific components. The model is estimated in one-step via Quasi-Maximum Likelihood for the G7 countries for the period Q1-1960 to Q4-2009. It is found that various model specifications considered fit well the first and second order dynamics...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2009

    The Role Of Production Technology For Productivity Spillovers From Multinationals: Firm-Level Evidence For Hungary

    This paper analyzes the potential for productivity spillovers from inward foreign direct investment using administrative panel data on firms for Hungary. The authors hypothesise that the potential for spillovers is related to observable characteristics of the production process of foreign affiliates, and evaluate this empirically. They further explore the role...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2011

    Optimal Inflation And Firms? Productivity Dynamics

    Empirical data indicate that firms tend to have below-average productivity upon entry and that they tend to experience post-entry productivity growth. The author presents a New Keynesian model with growth in firm-specific productivity and firm turnover that captures these two phenomena. The model predicts that the optimal rate of long-run...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2011

    The Effect Of Inflation On Real Commodity Prices

    Recent research has shown that economic conditions have an important effect on real commodity prices. The authors quantify the contribution of fluctuations in inflation to this particular link. In the data, a temporary rise in inflation causes real commodity prices to rise, as does a rise in trend inflation. They...

    Provided By Kiel Institute for the World Economy

  • White Papers // Apr 2010

    Firm Heterogeneity, Credit Constraints, And Endogenous Growth

    This paper is concerned with the role of firm heterogeneity under credit constraints for economic growth. The authors focus on firm size, innovativeness and credit constraints in a semi-endogenous growth model reflecting recent empirical findings on firm heterogeneity. It allows for an explicit solution for transitional growth and balanced growth...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2010

    Religious Orders And Growth Through Cultural Change In Pre-Industrial England

    The authors advance the hypothesis that cultural values such as high work ethics and thrift, "The Protestant ethic" according to MaxWeber, may have been diffused long before the Reformation, thereby importantly affecting the pre-industrial growth record. The source of pre-Reformation Protestant ethics, according to the proposed theory, was the Catholic...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2010

    Engel's Law And Growth With Directed Technical Change

    This paper presents a tractable endogenous two-sector growth model with non-Gorman intra-temporal preferences and directed technical change. One of the two consumption goods is a necessity, whereas the other is a luxury. If the economy starts with a low initial knowledge stock, households are relatively poor and a high expenditure...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jul 2010

    A Two-Sector Model Of Public Investment And Growth

    The authors consider a two-sector economy, where public infrastructure unevenly affects the productivity of the sectors. Private and public capitals are produced with different technologies, and the sector producing the infrastructure is not benefiting from its services. The government provides both infrastructure investment and a flow of intermediate goods, enhancing...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2010

    Rising R&D Intensity And Economic Growth

    Over the past decades, private R&D spending in the US and other developed countries has been growing faster than GDP. In the United States, for example, R&D expenditures (excluding those funded by the federal government) have grown from 0.63% of GDP in 1953 to 1.95% of GDP in 2007, i.e....

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2011

    Trend Growth And The Dynamic Effects Of Government Spending

    The paper studies the macroeconomic effects of government spending shocks in an economy characterized by positive trend growth. It shows that the lower is the trend growth rate the less inflationary are government spending shocks and vice versa. Moreover, on impact output is higher but exhibits less persistence the lower...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2010

    Firm Heterogeneity, Industry Characteristics And Types Of FDI: The Case Of German FDI In The Czech Republic

    In addition to firm and industry characteristics, the heterogeneity of Foreign Direct Investment (FDI) has to be taken into account when analyzing the determinants of outward FDI. The authors combine two firm-specific datasets on German firms with subsidiaries and joint ventures in the Czech Republic, compared to a control group...

    Provided By Kiel Institute for the World Economy

  • White Papers // Feb 2010

    FDI Liberalization, Firm Heterogeneity And Foreign Ownership: German Firm Decisions In Reforming India

    The paper investigates the role of firm-level productivity and industry-level R&D for MNEs' choice of undertaking FDI, and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jan 2009

    Energy Saving Technology Diffusion Via FDI And Trade: A CGE Model Of China

    This paper introduces intra- and inter-sectoral technology diffusion via FDI and imports into a recursive-dynamic CGE model for climate policy analyses. It analyzes China's accession to a Post Kyoto emission regime that keeps global emissions from 2012 on constant. Due to ongoing energy efficiency gains, partly stemming from international technology...

    Provided By Kiel Institute for the World Economy

  • White Papers // Nov 2009

    FDI By Early Movers, Followers And Latecomers: Timing Of Entry By German Firms During Transition In The Czech Republic

    Theoretical considerations suggest that the option of waiting under conditions of uncertainty affects the relative importance of firm-level productivity and distance-related transaction costs as driving forces of FDI. Yet the timing of FDI has received little attention in the empirical literature on FDI determinants. To help close this gap, the...

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2008

    Transitional Dynamics In The Solow-Swan Growth Model With AK Technology And Logistic Population Change

    This paper offers an alternative way, based on the logistic population growth hypothesis, to yield transitional dynamics in the standard AK model with exogenous savings rate. Within this framework, the authors show that the dynamics of the capital stock per person and its growth rate can be non-monotonic over time....

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2009

    Vertical FDI Versus Outsourcing: The Role Of Host Country Human Capital

    The decision to make or buy an input is usually studied with reference to the home country. However, since the offshored input is produced in a host country, there is a strong reason to believe that the host country factors would also influence the organization decision of offshore production. In...

    Provided By Kiel Institute for the World Economy

  • White Papers // May 2009

    Industrialization In Malaysia: Changing Role Of Government And Foreign Firms

    This paper examines the changing role of government and foreign firms in Malaysia's industrialization process. Economists have held different views of the role of government in industrialization. Some believed that the developing world was full of market failures and the only way in which poor countries could escape from their...

    Provided By Kiel Institute for the World Economy

  • White Papers // Apr 2010

    Access To Finance And Exporting Behavior In Transition Countries

    The authors analyze the link between firms' access to finance and their decisions to enter and exit the export market. They employ the Business Environment and Enterprise Performance Survey (BEEPS) conducted in 2005 and 2008-2009 to 28 countries in Eastern Europe and Central Asia. They find that more productive, foreign...

    Provided By Kiel Institute for the World Economy

  • White Papers // Jun 2009

    The Economic Drivers Of Human Trafficking: Micro-Evidence From Five Eastern European Countries

    Human trafficking is a humanitarian problem of global scale, but quantitative research on the issue barely exists. This paper is a first attempt to explore the economic drivers of human trafficking and migrant exploitation using micro data. The authors argue that migration pressure combined with informal migration patterns and incomplete...

    Provided By Kiel Institute for the World Economy

  • White Papers // Dec 2009

    Do We Face A Credit Crunch?

    The weakness of credit growth in the United States and Europe has given rise to concerns that the financial crisis has led to a credit crunch which has deepened the recession in the real economy and poses a serious threat to the recovery that seems to have started in the...

    Provided By Kiel Institute for the World Economy