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The findings have important implications for the empirical work on the money demand schedule, i.e. it seems that the conventional equation leaves much too much in the disturbance term. Moreover, expectations of future monetary injections are highly important for the current demand for money.
The above points are discussed in the following order. Section II provides an evaluation of the current shock-absorption view of money on which the present work is based. In Section III, a microeconomic approach is provided to rationalize the shock-absorption view of money under exogenous money supply injections. Implications for empirical work will be discussed. The testable form of the model is derived in Section IV. The empirical results are reported in Section V for five economies: West Germany, Australia, the USA, Finland and Sweden. The final section summarizes the results. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to examine whether price expectations satisfy the rationality hypothesis in Muth's sense, using direct observations on price expectations included in the IFO business survey data. The IFO Institute of Munich has been conducting monthly panel surveys for over 5000 manufacturing establishments. They are asked, for one thing, whether their selling prices will increase, remain the same or decrease over the next three months. The question about the actual price changes is also included in the survey. If the problems arising due to the qualitative nature of the data are solved, this unique set of data should provide valuable information for the study of price expectations.
First, the data construction is explained in Section II. Then, Section III contains the development of several statistical measures of forecasting performance for the qualitative data. In Section IV the accuracy and consistency of prediction, are examined. Section V investigates the validity of the rational expectation hypothesis by testing the unbiasedness and efficiency of price expectations. The main empirical findings and their implications are discussed in Section VI. [ABSTRACT FROM AUTHOR]

The relation of output to workers and hours is a frequently investigated topic. The points addressed are the development of wages over the business cycle or the adjustment of the workweek and employment if output is fluctuating. Some papers concerned with wages take supply factors into account,[1] whereas other authors only consider the demand for labour.[2] This paper is of the second kind, disregarding labour supply or wage effects it is only looking at the effects of current or expected production and orders regarding the adjustment of labour.
In this paper the question of how expected output determines the demand for hours of work and employment is investigated more closely. An adjustment model for employment and hours per worker is discussed. This model leads to conclusions which modify the hypotheses of Topel (1982) and Rossana (1985). One feature of this model is the consideration of adjustment costs of recruitment and overtime premiums. The costs associated with the worker are not constant over time. Usually in the beginning of an employment relationship fixed costs arise. These fixed costs are caused by training expenditures and foregone output in the period when workers are settling into their new jobs. Other fixed costs are expenditures for search and screening by the employer. [ABSTRACT FROM AUTHOR]

One of the dominant economic themes of the 1980s was the USA's persistent current account deficit. This deficit had, of course, its counterpart in a capital account surplus -borrowing from the rest of the world. Observers, whether academic economists, market operators or press commentators, repeatedly questioned whether the situation could continue. Would world investors (in the financial sense) grow weary, or at least wary, of putting their funds into US securities, with the result that the dollar would collapse in the foreign exchange markets and/or US interest rates would have to rise to exorbitant levels to persuade the world to keep buying US paper?
The current account deficits have continued but by the time of writing, at least, the catastrophe has not happened. The dollar has moved down at times but also up at times, so that exchange rates against other currencies cannot be said to have collapsed. Interest rates, meanwhile, do not show a risk premium which is visible, as it were, to the naked eye.
However, that is not necessarily to say that no risk premium exists. This paper reports an attempt to determine whether there is such a risk premium on US hands and also for the sake of comparison, on those of the UK, France and Germany (Federal Republic). For reasons which will be made clear below, we concentrate on long-term bonds.
The results suggest that, a risk premium related to current account deficits exists for the USA, but there appears to be no evidence of a risk premium for the other countries. A suggestion is offered as to why this may be so.
The results can be seen in terms of the ultra-familiar, textbook IS-LM-BP model. The implication of a risk premium on current account deficits is that the BP curve is upward-sloping. In the absence of such a premium, it is flat.
The paper is organized as follows: Section II summarizes the development of the relevant theory; Section III explains the method of investigation and... [ABSTRACT FROM AUTHOR]

This paper investigates the effects of government spending on real and nominal exchange rates within the context of an open economy equilibrium rational expectations model. The model predicts that both real and nominal exchange rates appreciate in response to anticipated and unanticipated increases in government spending. Empirical evidence from Germany for the period 1975:2-1989:4 provides some weak support for the predictions of the model.
The purpose of this paper is to shed more light on the role of fiscal policy in the determination of exchange rates by investigating the effects of government spending on real and nominal exchange rates. For this purpose, McCallum and Whitaker (1979) is extended to an open economy setting where the home country is assumed to produce and consume a single traded commodity and considered to be a price taker in the world commodity and capital markets. Within this framework it is shown that both anticipated and unanticipated increases in government spending lead to an appreciation of real and nominal exchange rates. Empirical evidence from Germany for the period 1975:2-1989:4 provides some support for the predictions of the model. [ABSTRACT FROM AUTHOR]

The extent of international capital mobility is assessed in a time series context. The possibility that the current account balance of different OECD countries contains a unit root is explored. It is shown that if the ratio of the current account balance to GDP is found to be integrated of the order of one, the country is likely to be part of the world capital market. The results for the whole period 1950-1988 indicate that the current account balance of at least Germany, Japan and the United States contains a unit root. Considering the subperiods before and after 1972 it is shown that international capital mobility increased after the breakdown of the Bretton Woods System. This paper develops a new approach to testing whether a country is linked to the international capital market. We show that if a country's current account balance expressed as a ratio to GDP contains a unit root, then there is no long-run stable relationship between its saving and investment rates and the country is linked to the international capital market. [ABSTRACT FROM AUTHOR]

This paper proposes a theoretical model to assess the effect of 'news' on the spot-forward-exchange-rate relationship and thereby predicts the direction of the impact of 'news' on the exchange rate. Two types of 'news' are analysed: rational expectations type innovations and announcement effects from newspapers. By using historical data from a time period which includes the German hyperinflation of the early 1920s, an estimable form of the model is derived which is substantially simpler than the version required using contemporary data. Preliminary empirical results support the main theoretical predictions but also cast some doubt on a literal interpretation of the exchange rate model plus rational expectations. [ABSTRACT FROM AUTHOR]

This paper investigates the integration of EU money supplies for the ERM period 1979Q1--93Q4. An estimating equation is derived from a simple equilibrium model of the EU money markets. Estimation is undertaken using the Johansen maximum likelihood cointegration procedure. The results show that those EU members with relatively low exchange rate premia against the DM are those whose variations in the money supply have been most sensitive to those of Germany. [ABSTRACT FROM AUTHOR]

This paper studies the determinants of disability retirement and unemployment of older workers, two labor market phenomena which the German public discussion combines under the label of early retirement. A social policy issue attracting much attention in German public debate is the reform of the retirement system. This reform is required because the current utilization of early retirement will not be affordable in future years. Both disability retirement and early retirement after unemployment are very common among older workers in Germany. During the 1980s more than half of all new retirees were disability retirees. The article shows the fractions of male cohorts that were either employed, unemployed or already in disability retirement by 1991. Out of all men aged 58 in 1991 about 18.3% had already retired due to disability and about 7% were unemployed. The public discussion indiscriminately combines disability retirement and `early retirement after long-term unemployment under the label of early retirement. Additionally, the high correlation between the two forms of labor force exit is confirmed by social scientists. This study tests the hypothesis that disability retirement and retirement after unemployment are substitute mechanisms for older workers to exit the labor force before reaching retirement age and compares the determinants of transitions into the two states.

In this paper, a dynamic decision model of the firm with a delayed adjustment of employment and investment is developed. Special attention is devoted to dynamic inefficiencies, i.e. underutilizations of the capital stock and labour hoarding. Market disequilibrium is introduced by allowing for a sluggish adjustment of wages and prices. The model of the firm is complemented by explicit aggregation, and the aggregate model is estimated for the FRG for the period 1960 to 1989. The empirical results reveal that dynamic adjustment constraints for employment and capital contributed to the persistence of unemployment in Germany in the 1980s. [ABSTRACT FROM AUTHOR]

This paper examines the effects of German foreign aid to, and net trade with, Namibia on Namibia's recent (1985-95) economic performance. The analysis suggests significant benefits for Namibia from trade with and assistance from Germany. However, domestic capital is found to determine Namibian economic growth more than net trade with Germany and German foreign aid to Namibia, while the effect of German capital tends be larger than that of German aid. A need for direct foreign investment from Germany to Namibia is inferred. Two types of further investigations are required: a joint determination of economic growth, aid, trade and capital formation, and a disaggregation of German aid to Namibia with an analysis of its individual impacts compared with similar effects of aid from other donors. [ABSTRACT FROM AUTHOR]

This paper reports results of an empirical study on the effectiveness of labour market policy. Data from Austria, France, Germany, Great Britain, Sweden and the United States are used to apply a simultaneous equation model with wages and employment being the endogenous variables. In order to explain employment, the amount of unemployment benefits per unemployed (passive labour market policy) and payment for wage subsidies and training per employed and unemployed person (active labour market policy) are used in addition to real wages and output. Wages and output have their expected impact on total employment. It turns out that passive labour market policy has a negative, and active labour market measures a positive, effect on the number of persons employed. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to develop and test a cash-in-advance model of an open economy. Following the contribution of Bohn (1991) and using intertemporal balance of payments theory we set up a currency demand function with real consumption expenditure, the foreign interest rate and exchange rate expectations as the core explaining variables. We test the model with the aid of the econometric techniques proposed by Hylleberg, Engle, Granger and Yoo (1990) and Engle, Granger, Hylleberg and Lee (1993) relying on quarterly seasonally unadjusted data for Germany in the period 1960: 1 to 1993: 4. The findings reported in the paper support the suggestions made by the theoretical model. [ABSTRACT FROM AUTHOR]

The macro evidence of increased adjustment pressure since the early 1970s suggests that job mobility should have increased. Hence, retrospective and spell data from the German Socio-Economic Panel are combined in order to test the hypothesis that job stability for German workers declined between 1974 and 1994. Using count data regression models in which we control for labour market experience, various demographic factors, and occupation, we find that job stability did not decrease, but if anything increased, between 1974 and 1994. Our finding suggests that labour market inflexibility is an important factor in explaining the European unemployment problem. [ABSTRACT FROM AUTHOR]

The introduction of an European common market for electricity and the opening of the power markets to eastern Europe and Scandinavia will have a drastic and lasting effect on the structure of the German electricity industry. This paper presents an evaluation of the possible effects of a single market especially on the power trade within Europe and the German power plant system. One special aspect is the investigation, whether a flooding of the German electricity market with French nuclear power could happen. Scenario simulations reject the argumentation that a European common market for electricity would lead to a dramatic increase in international electricity trade. [ABSTRACT FROM AUTHOR]

On several occasions, the 1980s witnessed non-Keynesian effects of fiscal contractions. Most notably, cuts in government spending in Ireland, Denmark and Germany are known to have coincided with increases in private consumption spending. Self-fulfilling expectations about the effects of stabilization policies may explain these and a diversity of opposing experiences. This paper formulates a dynamic stochastic equilibrium model with equilibrium indeterminacy, which allows for sunspot fluctuations as well as for systematic consumption effects of government policy in either direction. Cointegration tests and Euler equation estimates suggest that the model is approximately in accord with German data. Parameter estimates imply that the non-Keynesian experiences are not due to self-fulfilling expectations but to the productivity effects of government-provided infrastructure services. [ABSTRACT FROM AUTHOR]

Many theoretical analyses of the sources of economic growth focus on knowledge spillovers and scale economies to explain growth endogenously. The contribution of this paper is to shed some light on these arguments by an empirical investigation based on a production function framework. Sectoral production functions are estimated with annual German data of 51 sectors from 1960-90. The estimates reveal that both a pure Solow growth model and a Solow model augmented with human capital cannot account for the observed productivity increases. The model should be extended by allowing for inter-industry spillovers and scale economies at the aggregate level, as well as for scale economies associated with human capital at the sectoral level. The business cycle affects observed productivity changes in the short run and in the long run. [ABSTRACT FROM AUTHOR]

The paper appraises the in-sample and out-of-sample adequacy of linear AR and nonlinear SETAR models of unemployment rates for Germany, Japan, the UK and the US. Tests are reported for the presence and specification of threshold nonlinearities, SETAR model estimates, limiting dynamic properties and residual diagnostics, and out-of-sample forecasting performance. In-sample, threshold non-linearities are confirmed to be strongly present for the UK, US and Germany, and more marginally so for Japan. Out-of-sample, excepting Japan, SETAR models provide superior onestep-ahead forecast on RMSE grounds, most notably for the US. Final tests indicate that these models exhibit predictive accuracy in the sense of parameter and residual variance stability, implying the potential for exploitation of such nonlinearity in official forecasting. [ABSTRACT FROM AUTHOR]

This paper investigates the relationship between size and growth for a sample of banks from France, Germany, Italy and the UK over the period 1990 to 1996. Using several measures of bank size (total assets, equity and value of off balance sheet business), we test for size effects on growth, using models which incorporate the influences of previous growth, bank type and country of origin. The results of the analysis suggest that for Italy, small banks tend to grow faster than larger banks. No relationship is found between bank size and growth for France, Germany and the UK. This suggests a process of increasing concentration in these banking systems, even in the absence of bank specific strategic advantages. Small banks tend to have more variable growth rates than their larger counterparts. This suggests that large banks may enjoy advantages associated with diversified operations, which make them less susceptible to periods of extremely high or low growth. [ABSTRACT FROM AUTHOR]

This study presents an application of the Generalized Error Correction Model (GECM) for heterogeneous factor demands based on the quadratic cost function. Using data for 26 West German manufacturing industries over the period 1976-1995, it turns out that less general specifications such as the partial adjustment and the static AR(1) model are rejected. Furthermore, both short-run and long-run labour demands of different skill classes are inelastic. Unskilled labour is found to have a somewhat higher wage elasticity in absolute terms than medium-skilled labour. A small part of the shift in demand away from unskilled labour can be explained by the substitutability relationship between intermediate materials and unskilled labour. Between 6 and 13 percent of the observed shift towards high-skilled labour can be explained by capital accumulation. [ABSTRACT FROM AUTHOR]

The article investigates the effect of taxes and social premiums on female labour supply and household income. A comparison is made between labour supply and household income between the Netherlands and the Federal Republic of Germany in 1992. A discrete choice model for labour supply is used in which taxes and social premiums are implicitly incorporated. As male labour supply is highly inelastic an individual, male chauvinist model is used. The estimated models are used to simulate the effect of the differences in the tax and social premium system on the differences in labour supply and income between both countries. The results indicate that labour force participation is higher the more individualized the system. The German system leads to a lower tax burden compared to the Dutch system. It is concluded that differences in the tax and social premium system between both countries have hardly any influence on the differences in the inequality of net household labour income. There is evidence that the German system leads to a slightly more unequal distribution of household income. It is also concluded that although the tax and social premium system does influence labour supply and income, it can be doubted whether these effects are substantial. [ABSTRACT FROM AUTHOR]

This study employs Johansen's cointegration technique to determine the long-run relationship between exchange value of the DM and German production. It is shown that depreciation of the DM has a long-run expansionary impact on German production. This conclusion is based on a new method of selecting the order of VAR and the appropriate cointegrating vector simultaneously. [ABSTRACT FROM AUTHOR]

This study tests to what degree the incidence of payroll taxes in Germany is on employment and whether in consequence payroll taxes, in particular social insurance contributions, are the culprit behind the growing unemployment problem. Using industry level data for 18 years (1977–1994) a system of five dynamic factor demand equations is estimated. Various simulations indicate that the employment effects of payroll taxes are minimal. [ABSTRACT FROM AUTHOR]

This paper tests for business cycle symmetry in G7 countries during the post-World War II period using a number of tests, each reflecting alternative definitions of business cycle asymmetry. The tests are applied to monthly coincident economic indicators of business cycles. This found that business cycles in the US are characterized by both longitudinal (deepness) and transversal (steepness and sharpness) asymmetries: further, it is found that asymmetric transition probabilties and time irreversibility are due to nonlinearities. On the contrary, business cycles in Germany exhibits a symmetric behaviour. Between these extremes are the other countries, for which at least one of the tests here considered rejects the null of cyclical symmetry. Particularly, business cycle is characterized by deepness and sharpness in Canada, asymmetry in persistence in France and Japan, and asymmetric transition probabilities in France and United Kingdom. [ABSTRACT FROM AUTHOR]

The paper seeks to empirically identify factors that influence the probability of being a fast-growing firm in Eastern and Western Germany. Descriptive analyses have shown that most firms experience only small positive or negative employment growth or stagnate over time. The job generation mechanism rests with a handful of firms that increase their employment significantly over time. The empirical analysis shows that the probability of being a fast-growing firm depends on different factors when separating Eastern and Western Germany as well as using different definitions of fast-growing firms. Moreover, the analysis shows that technology-intensive manufacturing branches and knowledge-based business-related services do not generate the majority of fast-growing firms. [ABSTRACT FROM AUTHOR]

This paper investigates sector-specific driving forces for the standardization activities at national standardization organizations. In the first part, theoretical hypotheses concerning sector-specific standardization are derived. The empirical test is performed by a two-step procedure. First, based on 19 sectors, these hypotheses are tested empirically for Germany. The results show that R&D-intensive sectors standardize very actively; additionally, intellectual property rights play an important role. Furthermore, standardization increases with the concentration of the enterprises up to a certain threshold, where standardization activities decline again. Finally, export-intensive sectors tend to standardize more. Secondly, because of the small data base, these hypotheses are empirically tested in a pool model, an international cross-section approach based on 20 sectors and seven countries. These results are generally in concordance with the findings of Germany. After a summary of the results, recommendations for future standardization practice are given. [ABSTRACT FROM AUTHOR]

The objectives of the paper are to examine the determinants of interregional labour migration for German regions using the data on gross flows of labour movements across regions. This is one of the few studies where data on labour migration is used. There also was a wage convergence after reunification between regions of East and West Germany and this to a certain extent provides an explanation for non-linear relationship between wage differences among regions and migration. As the study distinguishes the blue-collar and white-collar wage difference between regions, different relationships between migration and blue and white-collar workers' wage differences can be assessed. We also test the hypothesis whether highly skilled workers migrate to the regions where inequality is greater while less skilled workers tend to migrate to the regions where inequality is low. [ABSTRACT FROM AUTHOR]

This paper develops a dynamic duopolistic model of advertising and price competition. Advertising accumulates a stock of goodwill which enters directly into the demand functions and both the cooperative and predatory effects of advertising are considered. It is shown that firms invest more in advertising the higher the degree of cooperativeness of advertising and some comparative static results are provided. In the second, empirical part of the article, estimations of the demand equations are presented using data from the German automobile industry. The main conclusion drawn is that advertising plays an important role in this market and has a predatory nature. [ABSTRACT FROM AUTHOR]

Economic thought has often regarded business cycles as asymmetric. This study examines the existence of asymmetries over the business cycle in seven European countries: France, Germany, Ireland, Italy, Luxembourg, The Netherlands and the United Kingdom. To analyse this issue, industrial production in these countries from 1957 to 1998 is examined, and quarterly contractions and expansions in this variable are compared. The results obtained with both parametric and non- parametric methods allow the existence of asymmetries in these countries to be questioned. [ABSTRACT FROM AUTHOR]

This study analyses the patent trends and volatilities for the top 12 foreign patenting countries in the US market from 1975 to 1997. Japan is ranked first in terms of foreign patents registered in the USA, followed by Germany. Patent registrations from each of these countries have increased steadily over time, but at different rates. Using monthly time series data for 1975-1997, the time-varying volatility of Australian, Japanese and German patents registered in the USA is examined in detail. The asymmetric AR(1)-GJR(1,1) model is found to be suitable for Australia and Japan, while the best fitting model for Germany is the symmetric AR(1)-GARCH(1,1) model. [ABSTRACT FROM AUTHOR]

This study concentrates on four computerized political markets in Germany between 1990 and 1998. While this new method for the prediction of election events worked quite well in the USA it did not perform as well in Germany. Searching for the causes of this distinction it is shown that, in contrast to the findings of Forsythe et al. (1992), (i) extraordinary profits were achieved less by people who took advantage of other people's anomalies than by those people who acquired an advantage from the existence of asymmetric information, (ii) the marginal trader hypothesis does not hold when applied to German markets, and that (iii) traders relied on public opinion polls. It is argued that these distinctions are caused by the differences in the German and the US voting systems. Additionally, it is shown that to a certain extent (iv) election markets were able to predict the contemporary mood of the electorate without the help of public opinion polls, (v) first of all the informed traders used public opinion polls as a source of information, and (vi) prices themselves became a source of information on which expectations were based. [ABSTRACT FROM AUTHOR]

The theory of career mobility (Sicherman and Galor, Journal of Political Economy, 98 (1), 169-92, 1990) claims that wage penalties for overeducated workers are compensated by better promotion prospects. Sicherman (Journal of Labour Economics, 9 (2), 101-22, 1991) was able to confirm this theory in an empirical study using panel data. However, the only retest using panel data so far (Robst, Eastern Economic Journal, 21, 539-50, 1995) produced rather ambiguous results. In the present paper, random effects models to analyse relative wage growth are estimated using data from the German Socio-Economic Panel. It is found that overeducated workers in Germany have markedly lower relative wage growth rates than adequately educated workers. The results cast serious doubt on whether the career mobility model is able to explain overeducation in Germany. The plausibility of the results is supported by the finding that overeducated workers have less access to formal and informal on-the-job training, which is usually found to be positively correlated with wage growth even when controlling for selectivity effects (Pischke, Journal of Population Economics, 14, 523-48, 2001). [ABSTRACT FROM AUTHOR]

This study examines the impact of German public start-up assistance programmes administered by the Deutsche Ausgleichsbank (DtA) on the performance of young firms. The empirical analysis is based on firms from the ZEW Entrepreneurship Study that either received start-up loans in one or more DtA schemes or did not receive any funding from the DtA at all. The paper applies a non-parametric matching approach often applied by labour market economists. The interesting success measure is the average annual employment growth rate over a six year period and the resulting causal effect is the difference of this measure between the group of subsidized firms and the selected control group firms that did not receive any DtA start-up loans. The empirical analysis shows that DtA start-up loans significantly improve the average employment growth rate. [ABSTRACT FROM AUTHOR]

The effects of patents as indicators for innovations and standards on German trade performance are analysed in general and German–British trade in detail. The latter analysis goes a step further than the approach of Swann et al. (1996) and is based on a broader and more detailed database. The results show that Germany's export performance can primarily be explained by its innovative capacity and only to a small extent by its strength in standards. Furthermore, the results underscore the common view of the trade-fostering effect of international standards, while ‘idiosyncratic' standards have ambiguous effects on exports. [ABSTRACT FROM AUTHOR]

Which dimensions of wage setting differ across establishments applying collective contracts and uncovered establishments? The empirical analysis reported here utilizes German linked employer–employee data for the years 1990, 1995 and 2001 and is restricted to workers without supervisory functions in larger manufacturing firms. Results show that the expected wage of an average worker is higher in firms applying collective contracts, while returns to human capital and the gender wage gap are reduced. Moreover, during the 1990s these effects became stronger. [ABSTRACT FROM AUTHOR]

The decline in output volatility in Germany is analysed. A lower level of variance in an autoregressive model of output growth can be either due to a change in the structure of the economy (a change in the propagation mechanism) or a reduced error term variance (reduced impulses). In Germany the decline output volatility is due to a decline in the persistence of the growth process. This is in contrast to the US results, where a break in the variance seems to dominate the decline in persistence. A change in the conduct of monetary policy (the establishment of another monetary policy regime) could be part of an explanation for the change in propagation. Stochastic simulations with a New Keynesian DSGE model support the hypothesis. [ABSTRACT FROM AUTHOR]

Given that instructional student ratings measure differences in pedagogical productivity, this study examines whether perceived attractiveness of German university teachers impact on these differences. Apart from some refinements and adjustments to idiosyncracies of the German system of higher learning, the quantitative analysis widely follows the strategy of the seminal work by Hamermesh and Parker (2005), based on US data. In comparison to findings for the USA, perceived attractiveness of teachers is found to have, if at all, only a weakly significant and quantitatively less important impact on the evaluation outcomes. [ABSTRACT FROM AUTHOR]

The paper deals with the role played by private equity investors (venture capital companies and corporate investors) in the emergence of a new biotechnology industry in Germany in the second half of the 90's. Our analysis takes into account the different business models and business fields to be found in the biotechnology industry. Based on theoretical arguments, a great relevance of venture capital companies (VCC) in financing young innovative biotechnology firms developing health care applications and technology platforms is expected, whereas corporate investors like incumbents in pharmaceutical and chemical industries may play a more important role in financing supplier companies. The empirical analysis is based on 378 biotechnology firms, founded between 1995 and 1999. Descriptive results emphasize a crucial importance of the access to venture capital provided by venture capital companies: VCC are venturing partner of 42 percent of healthcare developer in their early stage. Opposite to that, corporate investors are marginally involved as venturing partner of high risk projects. The observed pattern also holds in a multivariate analysis which controls for some core variables as determinants of equity funding. The result for corporate investors differs from observations in the US for collaborative arrangements. Therefore, country specific settings may matter. [ABSTRACT FROM AUTHOR]

The paper analyses the determinants of household work contracted in the German shadow economy. The German socio-economic household panel, which enumerates casual domestic employment, is used to estimate the demand for such household work. The regressors include regional wage rates, household income and several control variables for household composition. It is found that the demand for household work in the shadow economy is very income elastic. This suggests that targeted wage subsidies, linked to household work agencies, would be very effective in raising the legal demand for domestic help. A wage subsidy of 50% of wage costs could thus establish up to 500  000 new jobs for previously unemployed or non-working low skilled workers. The net fiscal costs of such a scheme are about 6.200 Euro per full-time job. In addition, society benefits from more law enforcement and from a raised female labour supply, especially by highly qualified mothers. [ABSTRACT FROM AUTHOR]

An important aim of severance payments is to reduce the economic disadvantages of dismissed employees. However, it may well be the case that a considerable fraction of employees is actually better off, if they are re-employed shortly after their dismissal. This is the first attempt to estimate the relevance of overcompensation by severance payments. It is found that about 7% of dismissed employees or about one quarter of those with severance payments are overcompensated in Germany. In particular, employees with many years of tenure have chances to receive severance payments as well as wage increases in their new jobs subsequent to dismissal. [ABSTRACT FROM AUTHOR]

This study empirically examines the relationship between public funding and repertoire decisions in the German public theatre sector. A cross-sectional econometric model is constructed to estimate the effects for a sample of 127 public theatres covering the theatre season 1998/1999 using a conventionality index as the dependent variable which has to be calculated first. The empirical results show that public subsidy, subscription income, multiple venues, the existence of other theatres in a community as well as the size and the level of education of a community have a significant impact on repertoire conventionality. [ABSTRACT FROM AUTHOR]

This paper develops a semi-structural modelling approach to study asymmetric monetary transmission in Europe. A system of dynamic equations containing reaction functions for monetary policy as well as output gap and inflation equations is simultaneously estimated for France, Germany and Italy. We find asymmetries on the demand side in the strength of interest rate transmission and on the supply side in the effects of the output gap on inflation. The responses are similar in Germany and Italy and generally stronger than in France. Out-of-sample tests do not find a structural break in the transmission mechanisms prior to the establishment of the European Monetary Union. [ABSTRACT FROM AUTHOR]

This paper employs multivariate panel cointegration techniques to re-examine the empirical relationship between bilateral real exchange rates and real interest rates. The results from a panel of 1470 quarterly observations on Canada, France, Germany, Italy, Japan, UK, and USA over the period 1977 to 1994 indicate the absence of any long-run relationship between the two variables. [ABSTRACT FROM AUTHOR]

This study examines the long-run relationship between monetary policy and dividend growth in Germany. For this purpose, cointegration is tested for between both variables in the period 1974 to 2003. However, problems related to spurious regression arise from the mixed order of integration of the series used, from mutual causation between the variables and from the lack of a long-run relationship among the variables of the model. These problems are addressed by applying the bounds testing approach to cointegration in addition to a more standard long-run structural modelling approach. In principle, both procedures are capable of dealing with the controversial issue of the exogeneity of monetary policy vis-à-vis dividend growth. However, the structural modelling approach still leaves a certain degree of uncertainty about the integration properties of the interest rate and the dividend growth. Hence, one feels legitimized to refer to the bounds testing procedure and to conclude that in the longer term short-term rates drive stock returns but not vice versa. [ABSTRACT FROM AUTHOR]

Cross-sectional evidence on price levels is scarce for all countries. However, several studies suggest that there might exist considerable differences in price levels within countries, which has obvious welfare implications. A sample of price levels in 50 German cities in 1993 is used to analyse the determinants of inter-city price level differentials. The most important explanatory variables for price level differentials are population size and density and the average wage level. Using this information, the price levels are predicted in all 440 German districts and aggregated to the state level. At the state level convergence of the price levels to a common mean is found, but at a very low speed. The estimated half-life is about 19 years. [ABSTRACT FROM AUTHOR]

The objective of this paper is to improve estimations of the size and scope of the underground economy by introducing a new approach that combines the advantages of the two most commonly used approaches, i.e. currency demand and multiple indicators, multiple causes (MIMIC). The new approach is applied to Germany. Among other things, it is shown that the approach yields improved estimation results. Some policy perspectives are discussed in the concluding section. [ABSTRACT FROM AUTHOR]

Various attempts to assess the performance of German hospitals have generated a wide range of estimates regarding their efficiency. These attempts were based on different, often rather small data sets consisting of heterogeneous hospitals; the techniques applied range from simple benchmarking approaches to studies which employ Data Envelopment Analysis (DEA). Some studies report ‘dramatic differences in efficiency’ and propose savings potentials of 50%; others find an average efficiency in excess of 95% and characterize almost 75% of their observations as fully efficient. This study presents results for two datasets representative of two segments of the German hospital system. These segments comprise all hospitals that have one internal medicine and one surgery department; the hospitals are located in the old federal states of Germany. None of the hospitals provides tertiary care. DEA can be applied because all hospitals offer a comparable quality and range of services. The results were estimated with a DEA-bootstrapping procedure and suggest an average bias–corrected efficiency of around 80%. [ABSTRACT FROM AUTHOR]

This paper employs four cointegration test approaches, PO, HI, JJ and KSS, to test for pairwise long-run equilibrium relationships between Taiwan's stock price index and each of the stock price indexes of four European markets – French, German, Dutch, and British stock markets. The results from these four tests are robust and clearly consistent in suggesting that the Taiwan stock market is not pairwise cointegrated with the four European stock markets. This provides strong evidence that there exist long-run benefits for Taiwan investors diversifying in the equity markets of Taiwan's major European trading partners, France, Germany, Holland, and the UK, over the sample period considered from 6 January 1998 to 30 May 2002. These findings could be valuable to Taiwan individual investors and financial institutions holding long-run investment portfolios in the equity markets of France, Germany, Holland, and the UK. [ABSTRACT FROM AUTHOR]

The purpose of this study is to analyse the effects of short- and long-term unemployment on health satisfaction. The data source used for the analysis is the German Socio-Economic Panel (GSOEP) which, given its longitudinal structure, allows one to better overcome the problem of endogeneity. Three different models are used in order to assess the effect of short and long-term unemployment and reemployment on health satisfaction. The results show that short-term unemployment has only a significant (and negative) effect for men, while for women short-term unemployment does not have a significant effect on health satisfaction. Being unemployed for a long period has a significant and negative effect for both men and women. Finally, it can be also concluded from the empirical analysis that reemployment has a significant and positive effect on health satisfaction for both unemployed men and women, independent of how long individuals have been unemployed. [ABSTRACT FROM AUTHOR]

In a recent paper Edward Lazear proposed the ‘Jack-of-all-trades’ view of entrepreneurship. Based on a coherent model of the choice between self-employment and paid employment he shows that having a background in a large number of different roles increases the probability of becoming an entrepreneur. The intuition behind this proposition is that entrepreneurs must have sufficient knowledge in a variety of areas to put together the many ingredients needed for survival and success in a business, while for paid employees it suffices and pays to be a specialist in the field demanded by the job taken. This study contributes to the entrepreneurship literature by empirically testing Lazear's hypothesis using a large recent representative sample of the German population. The empirical estimation takes the rare events nature of becoming a nascent entrepreneur and the regional stratification of the sample into account. The results illustrate the statistical significance and economic importance of the ‘jack-of-all-trades’ theory. [ABSTRACT FROM AUTHOR]