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.

The Seniority Structure of Sovereign Debt

Abstract: Sovereign governments owe debt to many foreign creditors and can choose which creditors to favor when making payments. This paper documents the de facto seniority structure of sovereign debt using new data on defaults (missed payments or arrears) and creditor losses in debt restructuring (haircuts). We overturn conventional wisdom by showing that official bilateral (government-to-government) debt is junior, or at least not senior, to private sovereign debt such as bank loans and bonds. Private creditors are typically paid first and lose less than bilateral official creditors. We confirm that multilateral institutions like the IMF and World Bank are senior creditors.

Modelling the dynamics of EU economic sentiment indicators: an interaction-based approach

Abstract: This article estimates a simple univariate model of expectation or opinion formation in continuous time adapting a ‘canonical’ stochastic model of collective opinion dynamics (Weidlich and Haag, 1983; Lux, 1995, 2009a). This framework is applied to a selected data set on survey-based expectations from the rich EU business and consumer survey database for 12 European countries. The model parameters are estimated through Maximum Likelihood (ML) and numerical solution of the transient probability density functions for the resulting stochastic process. The model's success is assessed with respect to its out-of-sample forecasting performance relative to univariate Time Series (TS) models of the Autoregressive Moving Average model, ARMA(p, q) and Autoregressive Fractionally Integrated Moving Average, ARFIMA(p, d, q) varieties. These tests speak for a slight superiority of the canonical opinion dynamics model over the alternatives in the majority of cases.

National sentiment and economic behavior: evidence from online betting on European football.

Abstract: National sentiment can have major implications for individual consumption and investment choices but has been researched little by economists. This article studies how national sentiment in the form of a perception or loyalty bias of bettors may affect pricing patterns on national wagering markets for European football. The authors show theoretically that both biases can be profitably exploited by domestic bookmakers through price adjustment. Analyzing empirically a unique data set of betting odds from online bookmakers in Europe, the authors find evidence of sys- tematic biases in the pricing of own national teams, deviations that can be explained by the aforementioned two biases.