Paul J. J. Welfens

Bio: Paul J. J. Welfens is an academic researcher from University of Wuppertal. The author has contributed to research in topics: Foreign direct investment & Globalization. The author has an hindex of 31, co-authored 289 publications receiving 2686 citations. Previous affiliations of Paul J. J. Welfens include University of Potsdam & University of Münster.

New Economy and Economic Growth in Europe and the U. S.

Abstract: From the Publisher: The New Economy in Europe and the US poses many unexplored issues. The authors present innovative theoretical and empirical analysis on Internet dynamics, productivity growth and organizational changes in selected OECD countries. New empirical findings related to telecommunications, Internet and growth also are presented. Based on the theoretical and empirical analyses various policy options are developed. Policy measures, both at the regional and national levels, can stimulate structural change, knowledge diffusion and economic growth. Different governance strategies for the Internet and e-commerce are identified from a global perspective.

The Economic and Financial Market Consequences of Global Ageing

Abstract: One: Economic and Financial Market Consequences of Global Ageing- Executive Overview- Section 1: Global Demographic Trends and Forecasts 1950-2050- Section 2: How is Ageing Likely to Impact Economically over the Next 50 Years: What are the Main Transmission Mechanisms?- 21: Expenditure Pressures on the Public Finances- 22: Demographic Change and Savings Behaviour- Box 1: Demographic Change and Savings Behaviour: Theoretical Considerations and Empirical Evidence- 23: Labour Supply Implications- 24: Capital Accumulation and Total Factor Productivity- 25: Interest Rate, Exchange Rate and Balance of Payments Developments- Box 2: Overview of the Basic Theoretical Mechanisms in the Ageing Model- Section 3: Global Capital Market Developments, Current Account Imbalances and the Evidence for Agerelated International Capital Flows- 31: External Capital Movements: an Historical Perspective- 311: Global Trends: 1870-2000: has the Degree and Nature of Capital Market Integration Changed Overtime?- 312: Country Specific Developments: Overview of Capital Market Integration Trends for the EU, US, Japan, Fast Ageing and Slow Ageing Countries: 1970-1998- Box 3: Gross Capital Movements: Indicator of Degree of Capital Market Openness- 32: Demographics and Foreign Capital Flows: Have Age-Related Capital Movements Been a Feature of Recent Decades?- 33: Future Trends in International Capital Movements- Box 4: Tracking the Trend Evolution of Net Foreign Assets: Global Capital Market Restrictions and the Growing Concentration of Capital Flows into the Us- Section 4: Global Ageing Scenario 2000-2050- 41: Model Assumptions- 42: Key Results- Box 5: Comparison of Growth Rates of GDP, Population and Living Standards for the Period 1950-2000 with that of the Model's Central Scenario for 2000-2050- Section 5: Policy Response: How Can the EU and the World as a Whole Effectively Deal with the Challenges of Ageing?- 51: Dealing with Ageing - What Should be the Focus of EU Policy Reforms?- Box 6: EU Budgetary Prudence: The Importance of Respecting the Stability and Growth Pact- 52: Dealing with the International Financial Market Effects of Ageing: More Not Less Globalisation is Needed- Box 7: Income Convergence: Theoretical and Empirical Evidence- Detailed Summary of Main Points from Part 1- Two: EU Pension Reform - an Overview of the Debate and an Empirical Assessment of the Main Policy Reform Options- Executive Overview of Key Policy Conclusions- Introductory Remarks- Section 1: Overview of the Pension Reform Debate- 11: Key Issues and Concepts- 12: Main Driving Forces behind the Growing Calls for Pension Reform- 121: Historical Analysis 1960-2000: What was the Role of Demographic, Labour Market and Generosity Factors in Determining the Past Growth of EU and us Public Pension Expenditure ?- 122: Future Evolution 2000-2050: What are the Implications of Ageing for Growth and Pension Expenditure Trends in the EU and the us?- 13: What are the Possible Policy Solutions?- Section 2: Description of Model Used to Assess the Pension Reform Options- 21: Model's Central Scenario of the Growth and Pension Expenditure Implications in the EU of Ageing Populations (2000-2050)- 22: Assessing the Explanatory Power of the Ageing Model: A Comparison with the Pension Projections from the EU's Economic Policy Committee- 23: Criteria for Evaluating the Effectiveness of the Various PAYG and Systemic Pension Reform Options Analysed in Sections 3 to 5- Section 3: PAYG System: Economic Assessment of the Main Parametric / Labour Market Reform Options: What is needed to Bring the System Back into Equilibrium?- 31: Changes to the Generosity of the PAYG System (Partial V Full Shift from Wage to Price Indexation)- 32: An Increase in the Effective Retirement Age- 33: Broad Package of "Payg" Reforms: Labour Market + Generosity + Retirement Age Changes- Section 4: Systemic Reform: 2 Key Factors to be Considered: Internal Rates of Return + Transition Burden- 41: Forecasts for the Internal Rate of Return of the PAYG + Funded Pension Systems: 2000-2050 (Central Scenario + Sensitivity Analysis)- 42: Forecasts for the Transition Burden in 2000 and its Evolution to 2050 (Central Scenario + Sensitivity Analysis)- Section 5: Economic Assessment of a Full / Partial Shift to Funding- 51: 100% Shift to Funding: Compulsory Savings Option- 52: 100% Shift to Funding: Voluntary Savings Option- 53: Partial Shift to Funding + Stabilisation of PAYG System- Section 6: An "Optimal" EU Pension Reform Strategy- 61: Basic Policy Options with Regard to Public Pension Systems- 62: Optimal Package of Reforms + Two Stage Transition Path- Box 1: "Optimal"2050- Section 2: How is Ageing Likely to Impact Economically over the Next 50 Years: What are the Main Transmission Mechanisms?- 21: Expenditure Pressures on the Public Finances- 22: Demographic Change and Savings Behaviour- Box 1: Demographic Change and Savings Behaviour: Theoretical Considerations and Empirical Evidence- 23: Labour Supply Implications- 24: Capital Accumulation and Total Factor Productivity- 25: Interest Rate, Exchange Rate and Balance of Payments Developments- Box 2: Overview of the Basic Theoretical Mechanisms in the Ageing Model- Section 3: Global Capital Market Developments, Current Account Imbalances and the Evidence for Agerelated International Capital Flows- 31: External Capital Movements: an Historical Perspective- 311: Global Trends: 1870-2000: has the Degree and Nature of Capital Market Integration Changed Overtime?- 312: Country Specific Developments: Overview of Capital Market Integration Trends for the EU, US, Japan, Fast Ageing and Slow Ageing Countries: 1970-1998- Box 3: Gross Capital Movements: Indicator of Degree of Capital Market Openness- 32: Demographics and Foreign Capital Flows: Have Age-Related Capital Movements Been a Feature of Recent Decades?- 33: Future Trends in International Capital Movements- Box 4: Tracking the Trend Evolution of Net Foreign Assets: Global Capital Market Restrictions and the Growing Concentration of Capital Flows into the Us- Section 4: Global Ageing Scenario 2000-2050- 41: Model Assumptions- 42: Key Results- Box 5: Comparison of Growth Rates of GDP, Population and Living Standards for the Period 1950-2000 with that of the Model's Central Scenario for 2000-2050- Section 5: Policy Response: How Can the EU and the World as a Whole Effectively Deal with the Challenges of Ageing?- 51: Dealing with Ageing - What Should be the Focus of EU Policy Reforms?- Box 6: EU Budgetary Prudence: The Importance of Respecting the Stability and Growth Pact- 52: Dealing with the International Financial Market Effects of Ageing: More Not Less Globalisation is Needed- Box 7: Income Convergence: Theoretical and Empirical Evidence- Detailed Summary of Main Points from Part 1- Two: EU Pension Reform - an Overview of the Debate and an Empirical Assessment of the Main Policy Reform Options- Executive Overview of Key Policy Conclusions- Introductory Remarks- Section 1: Overview of the Pension Reform Debate- 11: Key Issues and Concepts- 12: Main Driving Forces behind the Growing Calls for Pension Reform- 121: Historical Analysis 1960-2000: What was the Role of Demographic, Labour Market and Generosity Factors in Determining the Past Growth of EU and us Public Pension Expenditure ?- 122: Future Evolution 2000-2050: What are the Implications of Ageing for Growth and Pension Expenditure Trends in the EU and the us?- 13: What are the Possible Policy Solutions?- Section 2: Description of Model Used to Assess the Pension Reform Options- 21: Model's Central Scenario of the Growth and Pension Expenditure Implications in the EU of Ageing Populations (2000-2050)- 22: Assessing the Explanatory Power of the Ageing Model: A Comparison with the Pension Projections from the EU's Economic Policy Committee- 23: Criteria for Evaluating the Effectiveness of the Various PAYG and Systemic Pension Reform Options Analysed in Sections 3 to 5- Section 3: PAYG System: Economic Assessment of the Main Parametric / Labour Market Reform Options: What is needed to Bring the System Back into Equilibrium?- 31: Changes to the Generosity of the PAYG System (Partial V Full Shift from Wage to Price Indexation)- 32: An Increase in the Effective Retirement Age- 33: Broad Package of "Payg" Reforms: Labour Market + Generosity + Retirement Age Changes- Section 4: Systemic Reform: 2 Key Factors to be Considered: Internal Rates of Return + Transition Burden- 41: Forecasts for the Internal Rate of Return of the PAYG + Funded Pension Systems: 2000-2050 (Central Scenario + Sensitivity Analysis)- 42: Forecasts for the Transition Burden in 2000 and its Evolution to 2050 (Central Scenario + Sensitivity Analysis)- Section 5: Economic Assessment of a Full / Partial Shift to Funding- 51: 100% Shift to Funding: Compulsory Savings Option- 52: 100% Shift to Funding: Voluntary Savings Option- 53: Partial Shift to Funding + Stabilisation of PAYG System- Section 6: An "Optimal" EU Pension Reform Strategy- 61: Basic Policy Options with Regard to Public Pension Systems- 62: Optimal Package of Reforms + Two Stage Transition Path- Box 1: "Optimal" Policy Strategy: Maximising the Growth Rate Effects from Reform- Detailed Summary of Main Points from Part 2- Three: Annexes- Annex 1: Member States Analysis- Annex 2: Detailed Description of Ageing Model- Annex 3: Basic Data on Savings, Wealth Holdings and Retirement Income Financing- Annex 4: Results of Comparable Ageing Studies- Annex 5: Prefunding within the PAYG System: Intergenerational Equity Objective- List of Graphs- List of Tables- References

Macroeconomic and health care aspects of the coronavirus epidemic: EU, US and global perspectives

Abstract: The novel coronavirus (COVID-19) epidemic represents a major challenge for the world economy. While a detailed longer-term diffusion path of the new virus cannot be anticipated for individual countries, one may anticipate international supply shocks and declining GDP growth in many OECD countries and China in 2020; and one should expect falling asset prices in Asia, the United States and the European Union plus the United Kingdom – except for the price of risk-free government bonds. In the course of 2020/21 the US, the EU and the UK, as well as other countries, will face both an increasing number of infected patients as well as a higher case fatality ratio. Health care expenditures in the US could increase more than in the Eurozone and the EU in the medium term, a development that undermines the international competitiveness of the United States. The analysis suggests that per capita income is a positive function of the effective trade openness and of the new Global Health Security Index indicator from the NTI/Johns Hopkins University. A rising health care-GDP ratio in the US is equivalent to a rising US export tariff. As regards the coronavirus challenge, the ratio of acute care beds to the elderly in OECD countries shows considerable variation. Due to international tourism contraction alone, output growth in the Eurozone, the US and China can be expected to fall by about 1.6% in 2020. The COVID-19 challenge for the US Trump Administration is a serious one, since the lack of experts in the Administration will become more apparent in such a systemic stress situation – and this might well affect the November 2020 US presidential election which, in turn, would itself have considerable impacts on the UK and the EU27 as well as EU-UK trade negotiations. Integrating the health care sector into macroeconomics, which should include growth analysis, is an important task. The role of health quality - and health insurance coverage - for endogenous time horizons and economic welfare, respectively, is emphasized.

Sustainable Growth and Resource Productivity : Economic and Global Policy Issues

Abstract: Introduction Raimund Bleischwitz, Wuppertal Institute, Germany, Paul JJ Welfens, European Institute for International Economic Relations, Wuppertal (EIIW) and University of Wuppertal, Germany, and ZhongXiang Zhang, East-West Center, Honolulu, USA Part I: Raw materials supply and resource use from a global perspective 1 Will the mining industry meet global need for metals? Magnus Ericsson, Raw Materials Group (RMG), Stockholm, Sweden 2 Global resource use in a business-as-usual world up to 2030: Updated results from the GINFORS model Christian Lutz, Gesellschaft fur Wirtschaftliche Strukturforschung (GWS), Osnabruck, Germany, and Stefan Giljum, Sustainable Europe Research Institute (SERI), Vienna, Austria 3 Development and growth in mineral-rich countries Thorvaldur Gylfason, University of Iceland, CEPR, and CESifo, Iceland 4 The physical dimension of international trade 1962-2005: Empirical findings and tentative conclusions Monika Dittrich, University of Cologne and Wuppertal Institute, Germany 5 Defining critical materials Thomas E Graedel, School of Forestry and Environmental Studies, Yale University, USA Part II: The economics of resources and sustainable growth 6 Explaining oil price dynamics Paul JJ Welfens, European Institute for International Economic Relations, Wuppertal (EIIW) and University of Wuppertal, Germany 7 Technological catch-up or resource rents? A production frontier approach to growth accounting Natalia Merkina, Department of Economics, University of Oslo, Norway 8 Socio-ecological market economy in Europe: Interrelations between resource, labour and capital productivity Erich Hoedl, European Academy of Science and Arts, Austria 9 Why do companies ignore economic efficiency potentials? The need for public efficiency awareness Mario Schmidt, Pforzheim University of Applied Sciences, Germany Part III: Empirical analysis of resource productivity: Trends and drivers 10 Decoupling GDP from resource use, resource productivity and competitiveness: a cross-country comparison Soren Steger and Raimund Bleischwitz, Wuppertal Institute, Germany 11 Anxiety and technological change: Explaining the decline of sulphur dioxide emissions in Finland since 1950 Jan Kunnas, European University Institute, Italy, and Timo Myllyntaus, University of Turku, Turun yliopisto, Finland 12 Greece's fossil fuel use in 2006: A production, consumption and supply-chain analysis Eleni Papathanasopoulou, Sustainable Solutions Greece Part IV: Global policy issues 13 China and India's global demand for resources: Drawing some key implications on international energy security and Africa's development Jennifer Li, Foundation for Environmental Security and Sustainability, Falls Church (VA) and US Environmental Protection Agency, Washington, DC 14 Asian energy and environmental policy: Promoting growth while preserving the environment ZhongXiang Zhang, East-West Center, Honolulu, USA 15 The rationale for and economic implications of dematerialisation Paul Ekins, King's College, London, UK Conclusions: Towards a new resource economics Raimund Bleischwitz, Wuppertal Institute, Germany, Paul JJ Welfens, European Institute for International Economic Relations, Wuppertal (EIIW) and University of Wuppertal, Germany, and ZhongXiang Zhang, East-West Center, Honolulu, USA

Estimation and Inference in Econometrics

Abstract: Offering a unifying theoretical perspective not readily available in any other text, this innovative guide to econometrics uses simple geometrical arguments to develop students' intuitive understanding of basic and advanced topics, emphasizing throughout the practical applications of modern theory and nonlinear techniques of estimation. One theme of the text is the use of artificial regressions for estimation, reference, and specification testing of nonlinear models, including diagnostic tests for parameter constancy, serial correlation, heteroscedasticity, and other types of mis-specification. Explaining how estimates can be obtained and tests can be carried out, the authors go beyond a mere algebraic description to one that can be easily translated into the commands of a standard econometric software package. Covering an unprecedented range of problems with a consistent emphasis on those that arise in applied work, this accessible and coherent guide to the most vital topics in econometrics today is indispensable for advanced students of econometrics and students of statistics interested in regression and related topics. It will also suit practising econometricians who want to update their skills. Flexibly designed to accommodate a variety of course levels, it offers both complete coverage of the basic material and separate chapters on areas of specialized interest.

The Economic Institutions of Capitalism

Abstract: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

Growth in a Time of Debt

Abstract: We study economic growth and inflation at different levels of government and external debt. Our analysis is based on new data on forty-four countries spanning about two hundred years. The dataset incorporates over 3,700 annual observations covering a wide range of political systems, institutions, exchange rate arrangements, and historic circumstances. Our main findings are: First, the relationship between government debt and real GDP growth is weak for debt/GDP ratios below a threshold of 90 percent of GDP. Above 90 percent, median growth rates fall by one percent, and average growth falls considerably more. We find that the threshold for public debt is similar in advanced and emerging economies. Second, emerging markets face lower thresholds for external debt (public and private)--which is usually denominated in a foreign currency. When external debt reaches 60 percent of GDP, annual growth declines by about two percent; for higher levels, growth rates are roughly cut in half. Third, there is no apparent contemporaneous link between inflation and public debt levels for the advanced countries as a group (some countries, such as the United States, have experienced higher inflation when debt/GDP is high.) The story is entirely different for emerging markets, where inflation rises sharply as debt increases.

What's New about the New Economy? Sources of Growth in the Managed and Entrepreneurial Economies

Abstract: textThe purpose of this paper is to document the fundamental shift that is taking place in OECD countries. This shift is from the managed economy to the entrepreneurial economy. While politicians and policy makers have made a plea for guidance in the era of entrepreneurship, scholars have been slow to respond. This paper attempts to make a first step identifying and articulating these differences. We do this by contrasting the most fundamental elements of the newly emerging entrepreneurial economy with those of the managed economy. We identify fourteen trade-offs confronting these two polar worlds. The common thread throughout these trade-offs is the increased role of new and small enterprises in the entrepreneurial economy. A particular emphasis is placed on changes in economic policy demanded by the entrepreneurial economy vis-?-vis the managed economy.