"We analyze the effects of the unprecedented rise in trade between Germany and 'the East' - China and Eastern Europe - in the period 1988-2008 on German local labor markets. Using detailed administrative data, we exploit the cross-regional variation in initial industry structures and use trade flows of other high-income countries as instruments for regional import and export exposure. We find that the rise of 'the East' in the world economy caused substantial job losses in German regions specialized in import-competing industries, both in manufacturing and beyond. Regions specialized in export-oriented industries, however, experienced even stronger employment gains and lower unemployment. In the aggregate, we estimate that this trade integration has caused some 493,000 additional jobs in the economy and contributed to retaining the manufacturing sector in Germany. We also conduct our analysis at the individual worker level, and find that trade had a stabilizing overall effect on employment relationships." (Author's abstract, IAB-Doku) ((en))

The Rise of the East and the Far East: German Labor Markets and Trade Integration

https://www.dice.hhu.de/fileadmin/redaktion/Fakultaeten/Wirtschaftswissenschaftliche_Fakultaet/DICE/Discussion_Paper/065_Fonseca_Normann.pdf

Explicit vs. Tacit Collusion – The Impact of Communication in Oligopoly Experiments

This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.

/pdf/competition-policy-and-productivity-growth-an-empirical-15y5lwz5rs.pdf

Competition policy and productivity growth: an empirical assessment

Financial stability review

This paper discusses the general characteristics of online markets from a competition theory perspective and the implications for competition policy. Three important Internet markets are analyzed in more detail: search engines, online auction platforms, and social networks. Given the high level of market concentration and the development of competition over time, we use our theoretical insights to examine whether (a) leading Internet platforms have non-temporary market power and, based on this analysis, (b) whether any specific market regulation beyond general competition law rules is warranted in these three online markets.

/pdf/google-facebook-amazon-ebay-is-the-internet-driving-4pb5gz8unr.pdf

Google, Facebook, Amazon, eBay: Is the internet driving competition or market monopolization?

This paper develops a theoretical model which explains several stylized facts observed in the euro area interbank market after the collapse of Lehman Brothers in 2008. The model shows that if transaction costs are high, banks with a liquidity deficit will prefer to borrow liquidity from the central bank rather than from surplus banks in the interbank market. This implies that the central bank assumes an intermediary function. From a policy perspective, we argue that possible measures of the Eurosystem to reactivate the interbank market may conflict, inter alia, with monetary policy aims.

https://www.econstor.eu/bitstream/10419/37356/1/VfS_2010_pid_793.pdf

The Euro Area Interbank Market and the Liquidity Management of the Eurosystem in the Financial Crisis

This paper shows that depending on the distribution of banks' uncertain liquidity needs and on how monetary policy is implemented, frictions in the interbank market may reinforce the effectiveness of monetary policy. These frictions imply that with its lending and deposit facilities the central bank has an additional effective instrument at hand to impose an impact on bank loan supply. While lowering the rate on the lending facility has, taken for itself, an expansionary effect, lowering the rate on the deposit facility has a contractionary effect. This result has interesting implications for monetary policy implementation at the zero lower bound.

/pdf/frictions-in-the-interbank-market-and-uncertain-liquidity-4tazzldeeb.pdf

Frictions in the interbank market and uncertain liquidity needs: Implications for monetary policy implementation

This paper develops a model to analyze two different bad bank schemes, an outright sale of toxic assets to a state-owned bad bank and a repurchase agreement between the bad bank and the initial bank. For both schemes, we derive a critical transfer payment that induces a bank manager to participate. Participation improves the bank's solvency and enables the bank to grant new loans. Therefore, both schemes can reestablish stability and avoid a credit crunch. However, an outright sale will be less costly to taxpayers than a repurchase agreement only if the transfer payment is sufficiently low.

Reestablishing stability and avoiding a credit crunch: Comparing different bad bank schemes

https://www.econstor.eu/bitstream/10419/49094/1/667627928.pdf

Achim Hauck

Papers

The Euro Area Interbank Market and the Liquidity Management of the Eurosystem in the Financial Crisis

Frictions in the interbank market and uncertain liquidity needs: Implications for monetary policy implementation

Reestablishing stability and avoiding a credit crunch: Comparing different bad bank schemes

Reestablishing stability and avoiding a credit crunch: Comparing different bad bank schemes

Frictions in the interbank market and uncertain liquidity needs: Implications for monetary policy implementation