Showing papers by "Kiel Institute for the World Economy published in 2015"
TL;DR: In this paper, the authors explore the network topology arising from a dataset of the overnight interbank transactions on the e-MID trading platform from January 1999 to December 2010.
Abstract: We explore the network topology arising from a dataset of the overnight interbank transactions on the e-MID trading platform from January 1999 to December 2010. In order to shed light on the hierarchical structure of the banking system, we estimate different versions of a core---periphery model. Our main findings are: (1) the identified core is quite stable over time in its size as well as in many structural properties, (2) there is also high persistence over time of banks' identified positions as members of the core or periphery, (3) allowing for asymmetric `coreness' with respect to lending and borrowing considerably improves the fit and reveals a high level of asymmetry and relatively little correlation between banks' `in-coreness' and `out-coreness', and (4) we show that the identified core---periphery structure could not have been obtained spuriously from random networks. During the financial crisis of 2008, the reduction of interbank lending was mainly due to core banks reducing their numbers of active outgoing links.
337 citations
TL;DR: In this article, Baur and Lucey (2010) augmentation of their model to a smooth transition regression (STR) using an exponential transition function which splits the regression model into two extreme regimes: periods in which stock returns are on average and therefore allowing to test whether gold acts as a hedge for stocks, the other one accounts for extreme market conditions where the volatility of the stock returns is high.
297 citations
TL;DR: In this paper, the authors used self-reported information on life satisfaction and two individual green space measures to explore how urban green space affects the well-being of the residents of Berlin, the capital city of Germany.
280 citations
TL;DR: In this paper, the authors present results of a meta-regression on valuation of consumer preferences for a larger share of renewable energy in their electricity mix, revealing a number of important factors that explain the differences in WTP values for renewable energy.
173 citations
TL;DR: In this paper, the authors compare attitudes towards urban green spaces provision, perception, and use of urban parks and find that there are similarities between cities regarding attitudes towards ES provision and the importance of different park characteristics for visitors.
Abstract: Urban green spaces, including parks, provide numerous ecosystem services (ES) for city inhabitants. Besides provisioning and regulating services, they also provide cultural services by giving people opportunities to recreate and experience nature in the city. The focus of this paper is on cultural ES provided by urban parks in four European cities (Berlin, Stockholm, Rotterdam, and Salzburg). We compare attitudes towards ES provision, perception, and use of urban parks. In particular, we compare the perception of several park characteristics to their stated importance for park visitors. Results indicate that there are similarities between cities regarding attitudes towards ES provision and the importance of different park characteristics for visitors. Park use patterns such as the share of regular park visitors or the activities carried out, however, vary significantly between cities. The city-specific context, including park availability, quality, and perception but also the inhabitants' preferences for cultural ES and existing substitutes, is thus crucial for urban planning. (C) 2014 Elsevier B.V. All rights reserved.
156 citations
TL;DR: Today's global biomass potentials substantially exceed previous estimates and even 2050s' demands, thanks to increasing cropping intensities and the spatial reallocation of crops to their profit-maximizing locations.
Abstract: Global biomass demand is expected to roughly double between 2005 and 2050. Current studies suggest that agricultural intensification through optimally managed crops on today's cropland alone is insufficient to satisfy future demand. In practice though, improving crop growth management through better technology and knowledge almost inevitably goes along with (1) improving farm management with increased cropping intensity and more annual harvests where feasible and (2) an economically more efficient spatial allocation of crops which maximizes farmers' profit. By explicitly considering these two factors we show that, without expansion of cropland, today's global biomass potentials substantially exceed previous estimates and even 2050s' demands. We attribute 39% increase in estimated global production potentials to increasing cropping intensities and 30% to the spatial reallocation of crops to their profit-maximizing locations. The additional potentials would make cropland expansion redundant. Their geographic distribution points at possible hotspots for future intensification.
139 citations
TL;DR: In this article, the effects of ECB communications about unconventional monetary policy operations on the sovereign spreads of Greece, Ireland, Italy, Portugal, and Spain relative to Germany between 2008 and 2012 were investigated.
116 citations
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TL;DR: The authors studied the political fall-out from systemic financial crises over the past 140 years and found that after a crisis, voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners.
Abstract: Partisan conflict and policy uncertainty are frequently invoked as factors contributing to slow post-crisis recoveries. Recent events in Europe provide ample evidence that the political aftershocks of financial crises can be severe. In this paper we study the political fall-out from systemic financial crises over the past 140 years. We construct a new long-run dataset covering 20 advanced economies and more than 800 general elections. Our key finding is that policy uncertainty rises strongly after financial crises as government majorities shrink and polarization rises. After a crisis, voters seem to be particularly attracted to the political rhetoric of the extreme right, which often attributes blame to minorities or foreigners. On average, far-right parties increase their vote share by 30% after a financial crisis. Importantly, we do not observe similar political dynamics in normal recessions or after severe macroeconomic shocks that are not financial in nature.
93 citations
TL;DR: In this article, a quasi-experimental difference-in-differences approach was used to analyze the effects of the combined disaster on people's subjective well-being, finding that people living in a place affected by the tsunami or close to the Fukushima Dai-ichi power plant experienced a drop in life happiness, while the effects declined with distance to the place of the disaster.
Abstract: Based on a quasi-experimental difference-in-differences approach, we use panel data for 5979 individuals interviewed in Japan before and after the tsunami and nuclear accident at Fukushima to analyze the effects of the combined disaster on people's subjective well-being. To conduct our analysis, we use Geographical Information Systems to merge the subjective well-being data with information on respondents' distance from the Fukushima Dai-ichi nuclear power plant, their proximity to nuclear power stations in general, and the spatial distribution of radioactive fallout after the accident. Our main findings are as follows: (1) After the disaster, people living in a place affected by the tsunami or close to the Fukushima Dai-ichi power plant experienced a drop in life happiness, while the effects declined with distance to the place of the disaster. (2) No change in subjective well-being is detectable in people living close to nuclear facilities in general. (3) In contrast to happiness with life after the disaster, no effect on people's happiness with their entire life can be found among those affected by the disaster. (4) The drop in life happiness in municipalities affected by the tsunami is equivalent to 72% of annual income and reaches 240% for those living in close distance to the Fukushima Dai-ichi power plant (<= 150 km). (C) 2015 Elsevier B.V. All rights reserved.
90 citations
TL;DR: In this article, the marginal abatement cost curve of CO2 emissions in China is estimated using a parameterized directional output distance function, and four types of model specifications are applied to fit the MAC-carbon intensity pairs.
80 citations
TL;DR: It is shown that environmental tipping points can profoundly alter cost−benefit analysis, justifying a much more stringent climate policy, which takes the form of a higher immediate price on carbon.
Abstract: Most current cost−benefit analyses of climate change policies suggest an optimal global climate policy that is significantly less stringent than the level required to meet the internationally agreed 2 °C target. This is partly because the sum of estimated economic damage of climate change across various sectors, such as energy use and changes in agricultural production, results in only a small economic loss or even a small economic gain in the gross world product under predicted levels of climate change. However, those cost−benefit analyses rarely take account of environmental tipping points leading to abrupt and irreversible impacts on market and nonmarket goods and services, including those provided by the climate and by ecosystems. Here we show that including environmental tipping point impacts in a stochastic dynamic integrated assessment model profoundly alters cost−benefit assessment of global climate policy. The risk of a tipping point, even if it only has nonmarket impacts, could substantially increase the present optimal carbon tax. For example, a risk of only 5% loss in nonmarket goods that occurs with a 5% annual probability at 4 °C increase of the global surface temperature causes an immediate two-thirds increase in optimal carbon tax. If the tipping point also has a 5% impact on market goods, the optimal carbon tax increases by more than a factor of 3. Hence existing cost−benefit assessments of global climate policy may be significantly underestimating the needs for controlling climate change.
TL;DR: In this paper, a method to estimate the direct effects of foreign ownership on foreign firms' productivity and the indirect effects from the presence of foreign-owned firms on other foreign and domestic firms's productivity in a unifying framework, taking interactions between firms into account.
TL;DR: Positive migration effects seem to compensate the elderly for decreasing social contact with their migrant family members, and are linked to an income effect which leads to improvements in diet and reallocation of time use from subsistence farming to leisure and sleep which may have further beneficial effects.
TL;DR: In this article, the authors argue that competition for export markets and political support prevents donor countries from coordinating their aid activities between one another, and they perform logit and fractional logit estimations for a large sample of recipient countries and aid activities.
Abstract: Development assistance has been criticised for a lack of coordination between aid donors. This paper argues that competition for export markets and political support prevents donor countries from coordinating their aid activities between one another. To test these hypotheses, we perform logit and fractional logit estimations for a large sample of recipient countries and aid activities since the early 1970s. Our empirical results reveal that export competition between donors is a major impediment to aid coordination. Although less conclusive, we also find some evidence that donors' competition over political support prevents them from coordinating aid activities more closely.
TL;DR: In this paper, the authors investigated the technical inefficiency, shadow price and substitution elasticity of CO 2 emissions of China based on a provincial panel for 2001-2010, and showed that China's technical efficiency increases over the period implying further scope for CO 2 emission reduction in the medium and longer term at best by 4.5 and 4.9% respectively.
Abstract: This paper investigates the technical inefficiency, shadow price and substitution elasticity of $$\hbox {CO}_{2}$$
emissions of China based on a provincial panel for 2001–2010. Using linear programming to calculate a quadratic parameterized directional output distance function, we show that China’s technical inefficiency increases over the period implying further scope for $$\hbox {CO}_{2}$$
emissions reduction in the medium and longer term at best by 4.5 and 4.9 % respectively. Our results (notwithstanding regional differences) highlight increases in the shadow price of $$\hbox {CO}_{2}$$
abatement (1,000 Yuan/ton in 2001 to 2,100 Yuan/ton in 2010). Additionally, increasingly steep substitution elasticity highlights the difficult reality of reducing China’s $$\hbox {CO}_{2}$$
emissions.
TL;DR: In this paper, the authors argue that donors try to resolve this dilemma by delivering aid through non-state actors, and they provide evidence that bypassing governments via NGOs and multilateral organizations is indeed a response to weak recipient state institutions.
TL;DR: In this article, the authors empirically investigate potential determinants of the allowance price dynamics in the European Union Emission Trading Scheme during Phase II and place particular emphasis on the fuel price selection.
Abstract: We empirically investigate potential determinants of the allowance price dynamics in the European Union Emission Trading Scheme during Phase II. In contrast to previous studies, we place particular emphasis on the fuel price selection. We show that results are extremely sensitive to choosing different price series of potential determinants, such as coal and gas prices. In general, only the influence of economic activity in Europe and hydropower provision in Norway is robustly explaining allowance price dynamics. The influence of fuel switching on allowance prices and, therefore, equalization of marginal abatement costs - in particular in the long run - is still rather small.
TL;DR: In this article, the authors examined whether the experience of shocks influenced individual risk attitude and found that adverse shocks perpetuate vulnerability to poverty via their effect on risk attitude, which suggests that risk-coping strategies profit from case-specific design.
TL;DR: This article examined foreign exchange intervention based on novel daily data covering 33 countries from 1995 to 2011 and found that intervention is widely used and an effective policy tool, with a success rate in excess of 80 percent under some criteria.
Abstract: This study examines foreign exchange intervention based on novel daily data covering 33 countries from 1995 to 2011. We find that intervention is widely used and an effective policy tool, with a success rate in excess of 80 percent under some criteria. The policy works well in terms of smoothing the path of exchange rates, and in stabilizing the exchange rate in countries with narrow band regimes. Moving the level of the exchange rate in flexible regimes requires that some conditions are met, including the use of large volumes and that intervention is made public and supported via communication.
TL;DR: This paper found that agents behave more selfishly when taking from a public account than when giving to a public good, and that a pure extension of the action space into the taking domain also leads to a significant increase in selfish behavior.
Abstract: We replicate Andreoni (Quarterly Journal of Economics 110: 1–21, 1995)’s finding that agents behave more selfishly when taking from a public account than when giving to a public good. Based on a neutral language setting we add new insights into motivations to give or take in a linear public good setting: we find that Andreoni’s result is partly driven by the complete elimination of giving options in the taking frame. However, a pure extension of the action space into the taking domain also leads to a significant increase in selfish behavior.
TL;DR: In this paper, the authors provide insight into public perceptions of sulfate injection and explore their underlying patterns using a survey conducted in Germany, finding that the acceptance of the technology is associated with the belief that climate change is a serious problem and that humans will eventually be able to control nature.
Abstract: Injecting sulfate aerosols into the stratosphere could quickly offset global warming caused by anthropogenic greenhouse gas emissions. Because the technology would have global side effects, it raises not only technological but also political, ethical, and social concerns. Therefore, research on sulfate injection should be accompanied by a global debate that incorporates public perceptions and concerns into the development and governance of the technology. Our paper provides insight into public perceptions and explores their underlying patterns using a survey conducted in Germany. The data reveal a differentiated picture. Laboratory research on sulfate injection is broadly approved, whereas field research is much less approved. Immediate deployment is largely rejected. The acceptance of the technology is associated with the belief that climate change is a serious problem and that humans will eventually be able to control nature. It is also determined by the levels of trust in scientists and firms. Among the strongest objections against the technology is the belief that humans should not manipulate nature in the way injecting sulfate would. The actual public perceptions of sulfate injection will, however, evolve along with the ongoing debate between the public, experts, and policymakers.
TL;DR: The authors analyzes the wage premia associated with workers' occupational use of foreign languages in Germany and finds evidence that the particularly large returns of immigrants originate in parts of the service sector that are linked to imports and exports.
TL;DR: In this article, the importance of geo-strategic and commercial motives for the allocation of German aid to 138 countries over the 1973-2010 period was investigated, and it was shown that geo-striches were at least as strong under the socialist leadership.
Abstract: We investigate the importance of geo-strategic and commercial motives for the allocation of German aid to 138 countries over the 1973–2010 period. We find that geo-strategic and commercial motives matter. When we relate them to the political color of the German government in general, and the Ministry for Economic Cooperation and Development and the Federal Foreign Office in particular, we find their importance to be at least as strong under the socialist leadership. Socialist leadership decreases the amount of aid commitments, controlled for other factors.
TL;DR: In this paper, the authors revisited data for the Italian interbank network based on overnight loans recorded on the e-MID trading platform during the period 1999-2010 using both daily and quarterly aggregates.
Abstract: Previous literature on statistical properties of interbank networks has reported various power-laws, particularly for the degree distribution (i.e., the distribution of credit links between institutions). In this paper, we revisit data for the Italian interbank network based on overnight loans recorded on the e-MID trading platform during the period 1999–2010 using both daily and quarterly aggregates. In contrast to previous reports, we find no evidence in favor of a power-law characterizing the degree distribution. Rather, the data are best described by negative Binomial distributions. For quarterly data, Weibull, Gamma, and Exponential distributions tend to provide comparable fits. We find similar results when investigating the distribution of the number of transactions, even though in this case, the tails of the quarterly variables are much fatter. The absence of power-law behavior casts doubts on previous claims that these interbank data fall into the category of scale-free networks.
TL;DR: This paper found that aid tends to be less effective when political ideology differs between the donor and the recipient, and that political misalignment between donor and recipient governments may render aid less effective by adding to transaction costs and giving rise to incentive problems.
TL;DR: The authors explored which host and home country factors are associated with donations made by permanent migrants to the Philippines and found that on the host country side, donations increase with the income level of Filipinos and with the number of hate crimes against minorities.
TL;DR: This paper investigated the impact of foreign direct investment (FDI) on population health using panel data for up to 179 countries for the period between 1980 and 2011 and found that the relationship between FDI and health is nonlinear, depending on the level of income.
Abstract: This paper investigates the impact of foreign direct investment (FDI) on population health using panel data for up to 179 countries for the period between 1980 and 2011. Our main finding is that the relationship between FDI and health is nonlinear, depending on the level of income: FDI has a positive effect on health at low levels of income, but the effect decreases with increasing income, then changes sign and becomes increasingly negative at higher levels of income.
TL;DR: The economic impacts of global climate change at about 2 °C above the pre-industrial level are generally higher in China than in India, due to higher 2010–2050 cumulative abatement in China and the fact that India can offset more of its abatements cost though international emission trading.
Abstract: This paper presents a modeling comparison on how stabilization of global climate change at about 2 °C above the pre-industrial level could affect economic and energy systems development in China and India. Seven General Equilibrium (CGE) and energy system models on either the global or national scale are soft-linked and harmonized with respect to population and economic assumptions. We simulate a climate regime, based on long-term convergence of per capita carbon dioxide (CO2) emissions, starting from the emission pledges presented in the Copenhagen Accord to the United Nations Framework Convention on Climate Change and allowing full emissions trading between countries. Under the climate regime, Indian emission allowances are allowed to grow more than the Chinese allowances, due to the per capita convergence rule and the higher population growth in India. Economic and energy implications not only differ among the two countries, but also across model types. Decreased energy intensity is the most important abatement approach in the CGE models, while decreased carbon intensity is most important in the energy system models. The reduction in carbon intensity is mostly achieved through deployment of carbon capture and storage, renewable energy sources and nuclear energy. The economic impacts are generally higher in China than in India, due to higher 2010–2050 cumulative abatement in China and the fact that India can offset more of its abatement cost though international emission trading.
TL;DR: In this article, the link between gold prices and exchange rates was examined based on gold prices denominated in five different currencies and the related bilateral exchange rates, and the causalities and short-run volatility transmission under closer scrutiny.
TL;DR: In this paper, the authors examined the effects of corruption on productivity using enterprise data for the economies of Central and Eastern Europe and the CIS and found that bribery is more harmful for firm-level productivity than red tape.
Abstract: Using enterprise data for the economies of Central and Eastern Europe and the CIS, this study examines the effects of corruption on productivity. Corruption is narrowly defined as the occurrence of informal payments to government officials to ease the day-to-day operation of firms. The effects of this “bribe tax” on productivity are compared to the consequences of red tape, which may be understood as imposing a “time tax” on firms. When testing effects in the full sample, only the bribe tax appears to have a negative impact on firm-level productivity, while the effect of the time tax is insignificant. We also find that the surrounding environment influences the way in which firm behaviour affects firm performance. In particular, in countries where corruption is more prevalent and the legal framework is weaker, bribery is more harmful for firm-level productivity.