Kiel Institute for the World Economy

About: Kiel Institute for the World Economy is a facility organization based out in Kiel, Germany. It is known for research contribution in the topics: Foreign direct investment & Productivity. The organization has 318 authors who have published 1909 publications receiving 42832 citations. The organization is also known as: Institut für Weltwirtschaft an der Universität Kiel.

Income and Distribution Effects of Migration and Remittances: An Analysis Based on CGE Models for Selected CIS Countries

Abstract: This paper analyzes the direct and indirect income effects of international labor migration and remittances in selected CIS countries. The analysis is based on computable general equilibrium (CGE) models for Moldova, Ukraine, Georgia, Kyrgyzstan, and Russia. All net emigration countries would experience a sharp contraction of private consumption in the absence of remittances. In Russia, the main effect of immigration has been to hold down the real wage (as potential capital stock adjustments in response to immigration are not reflected in our comparative-static modeling framework). The paper concludes that because of the important contribution of migration and remittances to stabilizing and sustaining incomes in many CIS countries, enhanced opportunities for legal labor migration should figure prominently in any deepening of bilateral relations between CIS countries and the European Union under the European Neighborhood Policy.

Sectoral Value Added Prices, TFP Growth, and the Low-Skilled Wage in High-Income Countries

Abstract: This econometric analysis investigates the impact of changes in sectoral value-added prices and total factor productivity (TFP) on the equilibrium relative wage of low-skilled workers in eleven high-income countries. The key finding is that TFP growth mandated an increase in the unskilled wage, relative to the remuneration of human capital, during the 1970s, but a decrease during the 1980s. This is consistent with the observation that, in most sample countries, the relative wage and employment opportunities of low-skilled workers tended to improve until about 1980, but have deteriorated since then. While the regression results suggest that technological change played a large role in shifting labour demand against low-skilled workers, this conclusion is qualified because the empirical evidence is also compatible with product upgrading and outsourcing of low-skill intensive production activities to low-income countries.

It’s all about gains: Risk preferences in problem gambling.

Abstract: Problem gambling is a serious socioeconomic problem involving high individual and social costs. In this article, we study risk preferences of problem gamblers including their risk attitudes in the gain and loss domains, their weighting of probabilities, and their degree of loss aversion. Our findings indicate that problem gamblers are systematically more risk taking and less sensitive toward changes in probabilities in the gain domain only. Neither their risk attitudes in the loss domain nor their degree of loss aversion are significantly different from the controls. Additional evidence for a similar degree of sensitivity toward negative outcomes is gained from skin conductance data-a psychophysiological marker for emotional arousal-in a threat-of-shock task. (PsycINFO Database Record

Farmers' Subjective Valuation of Subsistence Crops: The Case of Traditional Maize in Mexico [Dissertation]

Abstract: [PhD Dissertation] Subsistence farmers may not respond to market incentives if their resource allocation decisions are based on shadow prices. This may seem puzzling from an economic point of view if shadow prices are not taken into account. Subsistence maize farmers in rural Mexico are an example with their non-response to decreasing maize prices after NAFTA. Previous research suggests that the market price may fail to represent incentives if farmers' crops have non-market values. I explore subjective valuation of subsistence crops in the context of traditional maize in Mexico - the center of domestication and diversity of maize. I show how these values affect farmer behaviour and the design of on-farm conservation programs. My theoretical contribution extends the basic agricultural household model by combining transaction costs and an asymmetric missing market for subsistence crop. This missing market arises from the fact that the market-purchased crops lack the non-market values attached to farmer's own crop, hence are imperfect substitutes for it. This model explains why some farmers may allocate resources in ways that cannot be explained by market prices even in the absence of transaction costs. Shadow prices predict farmers' resource allocation better than market prices and represent incentives to maintain subsistence crops. Using nationally-representative data, I estimate production functions and shadow prices. I conclude that the value of traditional maize to subsistence farmers is significantly higher than market prices for maize. The same is not true for modern maize. I identify key farm- and farmer-specific factors correlated with shadow prices of traditional maize. Use of irrigation and producing on land with high-quality soil are negatively correlated with shadow prices; male-headed households and those of indigenous origin have above-average shadow prices for traditional maize. The latter correlation is especially true in southern and southeastern Mexico indicating high (de facto) incentives to maintain traditional maize in these regions. On-farm conservation programs would be more effective if targeted to communities with high shadow prices. The method I use is flexible enough to be applied to guide conservation programs for other crops in other regions

Government activity and economic growth – one size fits All?

Abstract: This study investigates the role of government activity in economic growth, arguing that economic systems are important and that, therefore, one size of government does not fit all countries. Taking a panel of 111 countries over the years from 1971 to 2010, we consider clusters of economic systems as predicted by an extended Varieties of Capitalism (VoC) approach. The empirical growth impact of government activity is positive but u-shaped and depends on both the quality of institutions and the institutional setting. For the polar cases of liberal economies and Scandinavian coordinated market economies, the potential growth impact is quite similar and superior to other clusters of countries. However, the maximum growth effect is realized for above-average levels of government activity in the Scandinavian countries, while this would be detrimental to growth in liberal countries. Hence, high levels of government activity are consistent with growth but only in economic systems consistently rooted in a high level of government activity.