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Taxation theory rarely takes entrepreneurship into consideration. We discuss how this omission affects conclusions derived from standard models of capital taxation when applied to entrepreneurial income. Some of the defining features of entrepreneurship often omitted by standard capital taxation theory are incorporated into the analysis. This includes the lack of a well-functioning external market for entrepreneurial effort, limited access to external capital and the complementarities between entrepreneurial effort, entrepre-neurial innovation and capital investment. Because of these constraints, the entrepreneurial project is tied to the individual owner-manager. Unlike the typical passive portfolio investor assumed in cost of capital models the entrepreneur is unable to decouple savings decisions from investment decisions, and due to the comple-mentarities in production makes a joint decision on the supply of effort and capital. The returns from success-ful entrepreneurial ventures thus cannot be readily divided into labor and capital income, in stark contrast to what is assumed in standard taxation theory. When unique attributes of entrepreneurship are taken into account, some major conclusions of capital taxation models no longer hold, including the neutrality of capital taxation in owner-managed firms. These results are particularly important for the Nordic system of dual taxation, the theoretical foundation of which relies on the ability to neatly separate capital income from the labor income of the self-employed.

We review the recent empirical research concerning market power on the Nordic wholesale market for electricity, Nord Pool. There is no evidence of blatant and systematic exploitation of system level market power on Nord Pool. However, generation companies seem from time to time able to take advantage of capacity constraints in transmission to wield regional market power. Market power can manifest itself in a number of ways which have so far escaped empirical scrutiny. We discuss investment incentives, vertical integration and buyer power, as well as withholding of base-load (nuclear) capacity.

Although there is a vast theoretical literature on the existence of a tradeoff between equity and efficiency, empirical investigations often fail to find evidence for this proposition. Furthermore there are hints that some social models in Europe can cope better with this trade-off and are actually able to provide what economists call a 'free lunch'. In this paper we use data from the Luxembourg Income Studies (LIS) to evaluate (a) whether there really exists something like a free lunch and (b) whether some social systems are actually better in coping with the trade-off between equity and efficiency. Obwohl in der theoretischen Literatur die Existenz eines Trade-Offs zwischen Effizienz und Gerechtigkeit deutlich bejaht wird, ist dieser in der Empirie nur schwierig zu finden. Darüber hinaus scheint der Trade-Off von den verschiedenen europäischen Sozialmodellen unterschiedlich gut bewältigt zu werden. In einigen Ländern scheint sogar kein Trade-Off zu bestehen, so dass die Vermutung besteht, dass ein 'free lunch' existiert. In diesem Paper nutzen wir Daten der Luxembourg Income Studies (LIS) um empirisch zu evaluieren, ob (a) tatsächlich ein 'free lunch' existiert und ob (b) eine strukturelle Überlegenheit des nordischen Sozialsystems vorliegt.

This paper analyses the forecasting power of weekly futures prices at Nord Pool. The forecasting power of futures prices is compared to an ARIMAX model of the spot price. The time series model contains lagged external variables such as: temperature, precipitation, reservoir levels and the basis (futures price less the spot price); and generally reflects the typical seasonal patterns in weekly spot prices. Results show that the time series model forecasts significantly beat futures prices when using the Diebold and Mariano (1995) test. Furthermore, the average forecasting error of futures prices reveals that they are significantly above the settlement spot price at the ‘delivery week’ and their size increases as the time to maturity increases. Those agents taking positions in weekly futures contracts at Nord Pool might find the estimated ARIMAX model useful for improving their expectation formation process for the underlying spot price.

'In der Entwicklung familialer Erwerbsmuster hat sich in Europa in den letzten Jahrzehnten ein tief greifender Wandel vollzogen. Bis Mitte des vergangenen Jahrhunderts existierte in vielen Familien mit Kindern noch eine eindeutige Arbeitsteilung zwischen einem erwerbstätigen, männlichen 'Familienernährer' und einer auf Kindererziehung und Hausarbeit spezialisierten Ehefrau. International vergleichende Daten belegen jedoch in allen modernen Gesellschaften für die jüngere Vergangenheit eine Annäherung der Erwerbsquoten von Männern und Frauen (Hofäcker 2006a). Sozialwissenschaftliche Diagnosen sehen zudem das Verhältnis zwischen den Geschlechtern 'im Umbruch' (Leitner et al. 2004) und das 'klassische Ernährermodell' in einem Zustand zunehmender Auflösung in Richtung einer Erwerbstätigkeit beider Ehepartner (Lewis 2004). Vor dem Hintergrund dieser Annäherung von Männern und Frauen im Erwerbsleben wird auch eine Angleichung in der familialen Arbeitsteilung zwischen den Geschlechtern gefordert: 'Neue Väter' sollen mehr Verantwortung für die Erziehung der Kinder übernehmen und sich bei der Erledigung alltäglicher Haushaltsarbeiten umfassender engagieren. Mehrere europäische Länder unterstützen diese innerfamiliale Angleichung zudem durch spezielle familienpolitische Programme. Lässt sich jedoch de facto ein Trend zu solchen, an einer gleichmäßigen Aufteilung von Haus- und Erwerbsarbeit orientierten 'neuen Vätern' erkennen? Der vorliegende Beitrag geht auf Basis der 1988, 1994 und 2002 erhobenen Daten des ISSP-Moduls 'Family and Changing Gender Roles' dieser Frage in insgesamt 18 Ländern Europas nach. Er rekonstruiert Einstellungsmuster von Vätern als notwendige Grundbedingung eines Verhaltenswandels und stellt diese anschließend der tatsächlichen Beteiligung von Vätern an Familien- und Haushaltsarbeit gegenüber. Der systematische Vergleich nationaler Kontextbedingungen ermöglicht es dabei zu rekonstruieren, inwiefern es nationaler Familien- und Arbeitsmarktpolitik gelungen ist, Männer verstärkt zur Übernahme familialer Verantwortung zu bewegen.' (Autorenreferat)

Scandinavian countries are often portrayed in policy debates as model examples having shown how to square concerns for efficiency and equity. The core principle of the Scandinavian welfare model is an individual entitlement to public sector provisions combined with collective financing via taxes. However, a high employment rate is needed to ensure financial viability of this model. The Scandinavian model faces several challenges which affect the possibilities of maintaining a high employment ratio, namely, demographic changes, a growth dilemma and globalization. This paper discusses how these challenges affect the need and scope for reforms of the Scandinavian welfare model.

This paper provides experimental estimates of the impact of a voucher for private care within the Nordic system of universal provision of public care. The private daycare voucher acted as a significant boost for new daycare entrepreneurs to enter the market thus increasing the overall daycare provision in the municipalities participating in the experiment. In a market that was providing high-quality, low-cost public daycare, a voucher is nevertheless found to have a significant, positive effect for the use of private daycare with zero to negligible effects on the use of public care and labor force participation.

In this article we discuss the plausibility ofthe “crowding out“ hypothesis that predicts adisplacement of family support in responseto the expansion of the welfare state. A theoreticaldiscussion of motives for privateintergenerational transfers suggests a limitedpotential of crowding out. However, in sumcrowding out is unlikely to occur becausecontradictory effects of crowding in are alsoprobable. Using a comparative approach, wetest whether the support that the elderly receivefrom their adult children varies systematicallywith the generosity in public expenditure,which is what we would expectaccording to the crowding-out assumption.The empirical findings contradict this hypothesis. Zusammenfassung Der Beitrag diskutiert die Plausibilität der These des „crowding out“, nach der der Ausbau sozialstaatlicher Leistungen familiale Unterstützungsleistungen und familiale Solidarität verdrängen würde. In einer theoretischen Erörterung der Motive für private intergenerationelle Unterstützungsleistungen wird herausgearbeitet, dass ein crowding out theoretisch zwar möglich, insgesamt betrachtet aber empirisch unwahrscheinlich ist, da gegenläufige Effekte des crowding in eine höhere Plausibilität haben. Mit Hilfe eines Ländervergleichs wird anschließend untersucht, ob sich die Anteile der Hilfen, die die Älteren von ihren Kindern erhalten, systematisch mit Blick auf das Niveau der wohlfahrtsstaatlichen Versorgung unterscheiden, wie es der These des crowding out entsprechen würde. Die deskriptiven empirischen Befunde sprechen jedoch ebenfalls gegen diese These., Journal of Family Research, Vol 18 No 3 (2006): Generationentransfers

The earnings of mothers make up an important, but difficult to quantify, component of parental expenditures on children. This paper compares the long-term earnings of women with children, women without children, and men. The study conducts separate analyses for less educated, moderately educated, and highly educated people in eight Anglo-American, Continental European, and Nordic countries. The study finds that, for the most part, these countries cluster into three groups, with mothers in the Continental European group experiencing the largest earnings differentials, mothers in the Nordic group experiencing the smallest, and mothers in the Anglo-American countries occupying the middle position.

How are wages set in an open economy? What role is played by demand pressure, international competition, and structural factors in the labour market? How important is nominal wage rigidity and exchange rate policy for the medium term evolution of real wages and competitiveness? To answer these questions, we formulate a theoretical model of wage bargaining in an open economy and use it to derive a simple wage equation where all parameters have clear economic interpretations. We estimate the wage equation on data for aggregate manufacturing wages in Denmark, Finland, Norway, and Sweden from the mid 1960s to the mid 1990s.

The paper argues, firstly, that it is in the interest of the Nordic countries to focus increasingly at the EU new Eastern Neighbourhood and make their policies in the region more active. The region is gaining importance for Europe for various reasons, one of which is that the success or failure of the transformation here will seriously affect the future of Russia. Secondly, the European Neighbourhood will have a better chance to succeed if promoted by a group of member states that are capable simultaneously to make it an EU priority and to work with the recipients of the policy. The paper argues that the Nordic countries are the best to fulfil this task.

"Levels of political involvement still are surprisingly different among European citizenries. Apparently, neither the establishment of democratic institutions nor the rise in competences among mass publics has lead to a convergence of the levels of political involvement. Only at a very general level, systemic differences can be noted between the settled democracies of North-western Europe and the newer democracies of Southern Europe. The analyses presented here examine several explanations of the cross-national differences in political involvement by developing multi-level models combining the impact of various factors at the individual and the macro level using the first wave of the European Social Survey (2002-2003) as the primary data source. The results show that of the social capital factors, only the support for norms and values contributes to the explanation of political involvement after the conventional antecedents at the individual level are taken into account. Neither social capital understood as an individual resource, nor social capital understood as a conditional effect at the macro level, appears to be very relevant for the explanation of differences in political involvement. Instead, the multi-level models tested here underline the relevance of conventional individual-level factors. Cross-national differences in political involvement are mainly due to differences in the distributions of these factors in the various countries." (author's abstract)

We have estimated the demand of erythropoietin (EPO) on market data from the Nordic countries. Assuming that prices are set in a Nash-Bertrand game we determine the degree of competition in this Nordic market. We also report the impact of product innovation on welfare, e.g on consumer and producer surplus. The product innovation is the entry of Aranesp in the Nordic market. We find a positive effect related to the introduction of Aranesp in the EPO market. The high increase in consumer surplus however seems not to be accompanied by a great increase in producer surplus, whose growth is slight. Some time after the introduction of the innovation, the surplus growth does not seem to increase, it remains more or less the same (or decreases a bit). An important conclusion in our paper is that although there are few firms competing in the Nordic market for EPO, the estimated long run market power is low.

In recent times World and Global History becamethe fast growing sections of international historiography,mainly due to the interest in North American universities,but also followed by an increasing interest in otherworld regions. The first European Congress in World andGlobal History, held from September, 22 to 25, 2005 at theUniversity of Leipzig, explored the field and tried to answerif there are specific European traditions and practices towrite and research world history in a global age. In the followingsection reports from the panels organised during thisconference give an impression of a first step towards a newway to think and to discuss about history on the Europeancontinent but also in contact with scholars from Australia,the Americas, Asia and Africa., Historical Social Research Vol. 31, No. 2 (2006): Focus: World and Global History in Europe Starting Point and Frequency: Year: 1979, Issues per volume: 4, Volumes per year: 1

"Das Papier untersucht die Behauptung, dass internationale Migration und zunehmende ethnische Heterogenität die Durchführbarkeit und Legitimität des umverteilenden Wohlfahrtsstaates vor große Herausforderungen stellt. Allerdings kann Einwanderung in europäischen Ländern möglicherweise auch Probleme der demographischen Alterung, von Arbeitskräfteknappheit im Bereich sozialer Dienstleistungen und der Finanzierung künftiger Renten abmildern. In dem Papier werden drei Betrachtungsweisen daraufhin geprüft, warum eine insgesamt vorteilhafte Beziehung von Einwanderung und Tragfähigkeit des Wohlfahrtsstaates bislang nicht erreicht wurde. Nach der ersten Betrachtungsweise wird der umverteilende Wohlfahrtsstaat gefährdet, weil die durch Zuwanderung gesteigerte ethnische Heterogenität die soziale Solidarität schwinden lässt. Die zweite Argumentationslinie bezieht sich darauf, dass die Zuwanderung von Personen - insbesondere aus nicht-westlichen Ländern - mit niedrigem Qualifikationsniveau unverträglich ist mit den negativen Arbeitsanreizen, die durch recht generöse und leicht zugängliche Leistungen des Wohlfahrtsstaates gesetzt werden. Die dritte Betrachtungsweise schließlich sieht die Ursachen der Probleme ökonomischer Integration von Immigranten in diskriminierenden Einstellungen und Praktiken von Entscheidungsträgern in den Empfängerländern, wozu insbesondere Arbeitgeber und das Personal in Einrichtungen der Arbeitsmarktpolitik und anderen sozialen Dienstleistungsorganisationen zu rechnen sind. In dem Papier wird die erste Betrachtungsweise aufgrund von theoretischen Überlegungen und empirischen Befunden zurückgewiesen. Im Schlussteil wird argumentiert, dass bessere Längsschnittdaten zu den Beschäftigungskontexten und Arbeitsbedingungen von Immigranten sowie dem Vorkommen von Diskriminierungen erforderlich sind, um eine Einschätzung der Gültigkeit der zweiten und dritten Argumentationslinie vornehmen zu können." (Autorenreferat) "The paper examines the claim that international migration and increased ethnic diversity challenge the sustainability and legitimacy of redistributive welfare states. Immigration might potentially lessen pressures related to demographic ageing, labour shortages in welfare services and the funding of future pensions in many European countries. The paper discusses three accounts of why a mutually beneficial relationship between immigration and welfare state sustainability so far has not been achieved. The first account claims that redistributive welfare states are undermined because increased immigration-based ethnic diversity diminishes social solidarity. The second account argues that immigration, especially from non-western countries, threatens the sustainability of redistributive welfare provision because there is an unfortunate interplay between the level of qualifications of immigrants and the work disincentives created by fairly generous and accessible social security benefits. The third account attributes the problems of immigrants' economic integration to discriminatory attitudes and practices of key decisionsmakers in the receiving countries, especially from employers and staff in employment and educational services. The paper questions the first of these accounts on theoretical and empirical grounds. The last part of the paper argues that there is a need for better longitudinal data about the employment contexts and work conditions of immigrants in receiving countries and the prevalence of discrimination, in order to enable an assessment of the relative merits of the second and third account." (author's abstract)

Norwegen und die Schweiz sind keine EU-Mitgliedstaaten, weil die Bevölkerungen die Integration mehrheitlich in Referenden ablehnte. Die enorme Mobilisierung und Emotionalisierung in den nationalen Integrationsdebatten kann weder durch ökonomische noch durch politische Umstände hinreichend erklärt werden, zumal die Eliten beider Länder mehrheitlich die Integration unterstützen. Die Hauptmobilisierungsressource von Euroskeptikern liegt vielmehr darin, tief verwurzelte nationale Selbst- und Fremdbilder zu reaktivieren. Diese Diskursanalyse beschreibt vergleichend, auf welche Art und Weise die größten euroskeptischen Akteure der Schweiz und Norwegens diesen Rückgriff auf das Nationale in Integrationsdebatten herstellen. Gefragt wird, wie die „Aktion für eine Unabhängige und Neutrale Schweiz“ (AUNS) und die eng mit ihr verbundene „Schweizerische Volkspartei“ (SVP) einerseits, und die norwegische Bewegung „Nein zur EU“ (norwegisch: Nei Til EU) andererseits, ihren Integrationswiderstand mittels nationaler Narrationen und Bildersprachen als sinnvoll darstellen. Hierzu werden umfangreiche euroskeptische Bild- und Textquellen referiert und gedeutet. Damit wird ein Beitrag zur Forschung über das Selbstverständnis, die Denkweise, die Rhetorik und das Tugendsystem anti-integratorischer Bewegungen geleistet. Denn Euroskeptiker verstehen sich primär als Verteidiger der guten nationalen Gemeinschaft. Diese Gemeinschaft und dessen Nationalstaat beschreiben sie als wärmer, natürlicher, näher, gerechter, effizienter, friedlicher und demokratischer als das integrierte Europa, welches als ferner, kalter, bürokratischer Superstaat EU dargestellt wird. Norway and Switzerland are not member states of the EU, since the majority of the people rejected integration in several referenda. The emotionality and the enormous mobilisation in national debates on integration cannot sufficiently be explained by economic and political reasons, since the majority of the elites are supporting integration. Instead, the main resource of mobilisation for Eurosceptics lies in reactivating deeply rooted descriptions of national self and other. For carving out these collective images, this discourse-analysis compares how the major Eurosceptical actors of Switzerland, the “Action for an Independent and Neutral Switzerland” (AUNS) together with the tightly connected “Swiss People’s Party” (SVP), on one hand, and the Norwegian movement “No To EU” (NEI TIL EU), on the other hand, describe their actions as meaningful in their iconography and narrations. In doing so, the study refers to and interprets extensive material from Eurosceptical actors and contributes to the understanding of Eurosceptical self-perception, ways of thinking, rhetoric and virtue system. Here Eurosceptics perceive themselves mainly as defenders of the national community and its nation-state, which are regarded as warm, natural, close, justified, efficient, peaceful and democratic, while Europe is perceived as the cold, distant, bureaucratic superstate EU.

"This paper analyses the impact enlargements have had on the integration of the European Union (EU). For this purpose, integration was conceptualised as the sense of community across national boundaries and measured as interpersonal trust between EU nationalities. Eurobarometer surveys form the database used, with country dyads serving as units of analysis. The key result is that enlargements do not necessarily weaken trust. Enlargement to the North has actually strengthened trust levels within the EU, despite extending the Community from the central city belt to the Nordic periphery. Enlargements to the South and East, however, have weakened trust levels. The integrative effect of enlargement depends on the extent to which acceding nations differ from existing club members in three main dimensions: the level of modernisation (mechanisms: prestige), cultural characteristics (mechanisms: similarity) and their power in the international system (mechanisms: perceived threat). A cautiously optimistic conclusion can be drawn from the observation that in the past, after each wave of territorial extension, trust has subsequently increased." (author's abstract), "In diesem Beitrag werden die Auswirkungen der Erweiterungen auf die Integration der EU untersucht. 'Integration' wird dabei gemessen über transnationales Vertrauen: das Ausmaß des generalisierten zwischenmenschlichen Vertrauens, das die EU-Völker ineinander setzen. Eurobarometer-Umfragen der Jahre 1976-1997 dienen als Datenbasis, dyadische Länderpaare als Untersuchungsfälle. Erweiterungen schwächen nicht automatisch den Zusammenhalt. So wirkte die Norderweiterung Vertrauen stärkend, obwohl sie vom Städtegürtelzentrum zur nordischen Peripherie ging. Jedoch haben die Süd- und Osterweiterung das Vertrauen geschwächt. Der integrative Effekt von Erweiterungen hängt davon ab, in welchem Maße sich die beitretenden Nationen in drei Schlüsseldimensionen von den Mitgliedern unterscheiden: der am Modernitätsgrad hängenden Reputation, der kulturellen Ähnlichkeit und der an Bevölkerungsgröße und Militärpotential hängenden Bedrohlichkeit. Die Osterweiterung hat die Gemeinschaft in den zwei erstgenannten Dimensionen (weiter) heterogenisiert, und die derzeit geplanten Erweiterungen werden dies auch tun. Vorsichtigen Optimismus kann man aus der Tatsache ableiten, dass bislang auf jeder Erweiterungsstufe das gegenseitige Vertrauen nach den Erweiterungen angewachsen ist. Es ist durchaus denkbar, dass wir eine ähnliche atmosphärische Verbesserung in der osterweiterten EU erleben." (Autorenreferat)

Following Turkey’s application for EU membership in 1987, a Customs Union (CU) between Turkey and the EU, mainly covering trade in manufacturing goods and processed agricultural products, came into effect in 1995. In addition to a large agricultural sector, Turkey also specializes in the production and exportation of relatively low-price, low-quality varieties of manufactured products. We use a theoretical framework in order to demonstrate that these features of the Turkish economy imply asymmetric changes in the trade volumes of the incumbent countries of the EU as a result of the EU-Turkey CU. By examining disaggregated trade data we find that the technologically sophisticated EU countries (e.g., mainly the Northern European countries) are also least similar to Turkey in terms of their export structure, whereas the degree of export similarity between the less technologically sophisticated EU members and Turkey is high. Our econometric results indicate that, in contrast to the “Northern” group’s exports to other EU15 countries (which have remained intact), the Southern countries’s exports to the other EU15 countries have declined as a result of the EU-Turkey CU. Moreover, the extra penetration of the Turkish market by EU countries has not been more favourable to the Southern group. These findings also imply that technologically sophisticated countries may see no significant further benefits from Turkey’s full accession to the EU (whereas the migration and political influence related costs for these countries may be large).

We develop methods and employ similar sample restrictions to analyse differences in intergenerational earnings mobility across the United States, the United Kingdom, Denmark, Finland, Norway and Sweden. We examine earnings mobility among pairs of fathers and sons as well as fathers and daughters using both mobility matrices and regression and correlation coefficients. Our results suggest that all countries exhibit substantial earnings persistence across generations, but with statistically significant differences across countries. Mobility is lower in the U.S. than in the U.K., where it is lower again compared to the Nordic countries. Persistence is greatest in the tails of the distributions and tends to be particularly high in the upper tails: though in the U.S. this is reversed with a particularly high likelihood that sons of the poorest fathers will remain in the lowest earnings quintile. This is a challenge to the popular notion of ’American exceptionalism’. The U.S. also differs from the Nordic countries in its very low likelihood that sons of the highest earners will show downward ’long-distance’ mobility into the lowest earnings quintile. In this, the U.K. is more similar to the U.S.

The paper shows how entrepreneurial taxes interact with the career choice of individuals, the quality of entrepreneurs, and their effort and investments. It is particularly relevant to differentiate the early effects on start-up enterprises with substantial uncertainty from the tax effects on mature firms where the uncertainty is resolved. That is why the neutrality results of dividend taxation from mature company theory do not carry over to start-up enterprises. The Nordic dual model encourages (discourages) the establishment of new enterprises by entrepreneurs who anticipate high (low) profitability.

This paper analyses the differences in hourly labour productivity growth rates and levels between the Nordic EU countries (Denmark, Finland and Sweden) and four larger euro area countries (Germany, France, Italy and Spain). Additional information for the euro area as a whole, the UK and the US is also provided. Given that the economic and social models developed in the Nordic EU countries are in many ways closer to those of the larger euro area countries than that of the US, the experience of these countries is particularly interesting. Since the mid-1990s, the Nordic EU countries, particularly Sweden and Finland, have experienced stronger labour productivity growth than the larger euro countries. Like in the US, innovation and technological changes have played a major role in explaining the higher labour productivity growth in the Nordic EU countries compared with the larger euro area economies. Information and Communication Technology (ICT) diffusion is a key element to explain these differences. A number of institutional indicators, relating to market regulation, human capital, R&D investments and venture capital, show that the Nordic EU economies are better positioned than some of the larger euro area countries to exploit the opportunities provided by ICT in terms of productivity growth. However, remaining labour market rigidities may not allow the Nordic EU countries to fully enjoy the benefits of ICT diffusion in terms of increased employment.

In uniform price, sealed-bid day-ahead electricity auctions, the market price is set at the intersection between aggregate demand and supply functions built by a market operator. Each day, just one agent - the marginal generator - owns the market-clearing plant. Day-ahead auctions are moreover embedded in multi-segment systems, wherein diverse protocols coexist and change over time. Such a complex environment leads to adoption of simple, adaptive bidding rules. Specifically, such a market design lets two different types of routines emerge, depending on whether the agent is a likely marginal or inframarginal generator. However, because of the uniform price mechanism, only the bidding behavior of the former can be reflected into market prices. Depending on the specific way marginal generators process past information to set their bids - 'hyperbolic' or 'exponential' - electricity prices are likely to display long- or short-memory. Experimental evidence on hyperbolic discounting - a quite robust behavioral bias in humans - supports a long-memory view of electricity prices. This insight is broadly confirmed by spectral analysis of daily data from NordPool and CalPX markets, in sharp contrast with most previous empirical studies. This paper underlines the importance of institutional settings in determining market outcomes, and an interesting mapping of bidding rules and models of information processing into the time series properties of market prices.

The dual income tax combines a progressive tax schedule for labour income with a low flat tax rate on capital income and corporate income. This paper restates the case for the dual income tax and discusses alternative methods of taxing business income under such a tax system, paying special attention to the taxation of income from closely held corporations. It is argued that the imputed normal return to shares in unlisted companies should be taxed as capital income, while above-normal returns should be subject to labour income tax. The paper demonstrates that such a tax scheme can be designed to be neutral towards the firm's investment and financing decisions and towards the decisions of shareholders to realize their shares.

Der vorliegende Band basiert auf den Beiträgen der Wissenschaftler und Studierenden, die am IRISEN-II-Sommerkurs teilgenommen haben, und gibt einen Überblick über Inhalte und Diskussionen dieses Studienkurses. Konzepte und Methoden zur Beurteilung des globalen Wandels und seiner Folgen für Mensch und Natur in Nordeuropa standen im Mittelpunkt des von der Europäischen Union geförderten IRISEN-II-Studienkurses, der vom 21. Juli bis 3. August 2002 an der Forschungsstation Abisko in Nordschweden stattfand. Hauptanliegen des Kurses war es, die komplexen Beziehungen zwischen Umwelt und Gesellschaft bei regionalen Klimaveränderungen aufzuzeigen und die Bedeutung interdisziplinärer Forschung und einer Kooperation zwischen Wissenschaft und Entscheidungsträgern sowie gesellschaftlichen Interessengruppen hervorzuheben. Der Kurs bot 30 Doktoranden und Postdoktoranden natur- und gesellschaftswissenschaftlicher Disziplinen aus 12 Ländern die Gelegenheit, mit über 25 Experten verschiedener Nationalitäten und Fachwissenschaften aus Forschung und Praxis in Vorlesungen, Diskussionsforen und auf Exkursionen in einen interdisziplinären Dialog zu treten. The present volume is based on the lectures by the 26 scientists involved in IRISEN-II as well as the student presentations given in the frame of the discussion forums during the course.The Advanced Study Course IRISEN-II introduced 30 European graduate students from 12 countries to interdisciplinary research on global change. The course addressed the issue of regional climate change in the European North and its impacts on the one hand and the methodologies for regional climate modelling and integrated climate impact studies on the other. The course, which was carried out at Abisko Scientific research Station in subarctic Sweden from July 21 to August 3, 2002, was funded by the European Commission.

Mit Blick auf die zunehmende demographische Alterung der Gesellschaften in Europa gelangt das Konzept des aktiven Alterns immer deutlicher in den Fokus sozialpolitischer Debatten. Vor diesem Hintergrund zeigt der Beitrag auf, in welcher Form die ausgleichenden institutionellen Prozesse des Wohlfahrtsstaates zu sehr unterschiedlichen Politikergebnissen führen. Der erste Abschnitt beleuchtet im Sinne institutioneller Pfadabhängigkeit, wie die institutionellen Strukturen verschiedener wohlfahrtsstaatlicher Regime politische Kompetenzträger dazu führen, die charakteristischen politischen Antworten auf die demographische Alterung zu formulieren. Der zweite Abschnitt illustriert schließlich, wie Politikgemeinschaften peripher zum Mittelpunkt wohlfahrtsstaatlicher Institutionen allgemeine Politikpraktiken entwickelt haben, und zwar in Form einer kohärenten Kritik sowohl an den gegenwärtigen politischen Richtlinien als auch an politischen Programmen zum aktiven Altern. Hierbei wird deutlich, wie sich Wohlfahrtsstaaten selbst entgegen den Voraussagen der institutionellen Pfadabhängigkeit verändern. In einer Schlussfolgerung werden die Barrieren und Möglichkeiten für die politischen Agenden zum aktiven Altern betrachtet, die aus den derzeitigen institutionellen und politischen Landschaften in Europa hervorgehen. (ICG2)

"Cross-national comparative analysis of generalised social trust in 60 countries shows that it is associated with, and is an integral part of, a tight syndrome of cultural, social, economic, and political variables. High trust countries are characterized by ethnic homogeneity, Protestant religious traditions, good government, wealth (GDP per capita), and income equality. This particular combination is most marked in the high trust Nordic countries but when this group of outliners is removed from the analysis, the same general pattern is found in the remaining 55 countries, albeit in a weaker form. There are indications that rural societies tend to have comparatively low levels of generalized trust but no evidence that large-scale urban society tends to undermine trust. The cause and effect relations between trust and its correlates are impossible to specify but the results suggest that the ethnic homogeneity and Protestant traditions have a direct impact on trust, and an indirect one through their consequences for good government, wealth and income equality. The importance of ethnic homogeneity for generalised trust also suggests that the difference between particularised and generalised trust may be one of degree rather than kind." (author's abstract) "Generalisiertes Vertrauen in die Mitmenschen ist eng verknüpft mit einem Syndrom kultureller, sozialer, wirtschaftlicher und politischer Kontextmerkmale. Dies zeigt eine komparative Makro-Analyse mit 60 Ländern, basierend auf dem World Value Survey und Makro-Indikatoren. Insbesondere ethnische Homogenität, protestantische religiöse Tradition, hohe Regierungsqualität, Wohlstand und Einkommensgleichheit begünstigen ein hohes generalisiertes Vertrauen der Bevölkerung. Diese Merkmale finden sich in Kombination - und besonders ausgeprägt - in den nordischen Ländern, die auch die höchsten Vertrauenswerte aufweisen. Doch selbst wenn man die nordischen Länder als Ausreißer in der Analyse nicht berücksichtigt, sind für die verbleibenden 55 Länder dieselben Determinanten von Vertrauen wirksam, wenn auch in abgeschwächter Form. Zwar können die genauen Ursache-Wirkungszusammenhänge zwischen Vertrauen und den genannten Ländermerkmalen nicht spezifiziert werden. Jedoch legen die Ergebnisse nahe, dass ethnische Homogenität und Protestantismus zum einen auf direktem Wege ein Klima des Vertrauens erzeugen, zum anderen auf indirektem Wege, indem sie die Regierungsqualität, die wirtschaftliche Entwicklung und Einkommensverteilung beeinflussen. Die Bedeutung ethnischer Homogenität für Vertrauen wirft auch die Frage auf, ob zwischen partikularisiertem und generalisiertem Vertrauen wirklich - wie oft angenommen - ein fundamentaler Unterschied besteht oder ob dieser nicht eher gradueller Natur ist." (Autorenreferat)

This paper examines the role of unobserved ability in explaining inter-industry wage differentials, drawing on data on brothers. Such data allow us to account for unmeasured abilities due to common family and community factors shared by siblings. Important advantages of this approach are that we do not rely on assumptions of exogenous job mobility and that estimates reflect long-run wage differentials rather than short-run differences following switch of industry. The data sets come from four of the Nordic countries and the United States. We find that, in the Nordic countries, only a moderate proportion of the variability in industry wages is due to unobserved ability, while unmeasured factors explain as much as half of the industry wage variation observed in the United States. Accounting for such differences, we show that the U.S. inter-industry wage dispersion is similar to those of the Nordic countries.

It is widely accepted that in liberalized electricity markets log-returns display fat-tailed densities. Besides qualitative assessments, so far precise characterizations of the shape of the distribution have been seldom provided. In this work, we characterize the conditional and unconditional probability density functions of daily electricity log-returns, and of the underlying shocks from the NordPool market, for each of the 24 hours, through a very flexible and general family of distributions, namely the Subbotin family. Our study contributes with novel results in the field. First, we show that price fluctuations in electricity markets are additive in nature. We do this by exploiting a scaling relationship between price level and volatility, which is in turn a new result in the electricity markets literature. Second, in line with recent studies, we uncover the existence of multiple regimes in price dynamics, and we characterize the distributional shape for each of them. Interestingly, the shocks behind electricity price dynamics are approximately Laplace if one conditions on low price levels, and closer to a Gaussian in correspondence of high initial price levels. These results are at variance with the evidence from financial markets. The peculiar non-storable nature of electricity, and the varying strength of correlations between bidding behaviors at different load levels are suggested as possible key factors behind the specificities of electricity markets outcomes.

'Die Voraussetzungen für eine Kooperation im Sicherheitsbereich sollten für die nordischen Länder in vielerlei Hinsicht besser sein als für ganz Europa. Es besteht dort ein Netzwerk für Kontakte und Kooperationen zwischen Regierungen, Bürokratien, nationalen Parlamenten, politischen Parteien, Handels- und Arbeitsorganisationen. Die Vereinigung 'Norden' bezieht sich auf Solidarität, gegenseitiges Verständnis und grenzüberschreitende Zusammenarbeit. Im Gegensatz zu anderen Formen zwischenstaatlicher Kooperation - wie SAS, Nordischer Rat, nordische Passunion, nordische Freihandelszone innerhalb der EFTA - haben es die nordischen Länder im Bereich der Sicherheits- und Verteidigungspolitik aber nicht zu einer ähnlich intensiven Zusammenarbeit gebracht. Das rührt auch daher, dass nordische Kooperation traditionellerweise innerhalb eines breiteren europäischen (und transatlantischen) Rahmens am besten funktioniert hat. Damit die nordischen Länder ihre Möglichkeiten innerhalb der EU besser nutzen, ist es nötig, dass sie eine entspanntere und realistischere Einstellung gegenüber der Entwicklung einer gemeinsamen europäischen Sicherheits- und Verteidigungspolitik entwickeln. Solange Dänemark, Schweden und Finnland jedoch ihre so genannte 'kollektive' nordische Zurückhaltung bezüglich Verteidigung beibehalten, wird es keine optimale Kooperation innerhalb der EU geben.' (Autorenreferat), 'The conditions for Nordic security co-operation ought to be in many ways better than those for a European one. A network for contacts and co-operation between governments, officials, national assemblies, political parties, organisations of trade and working life exists. The association of 'Norden' has referred to solidarity, mutual understanding and co-operation across the borders. In contrast to the various interstate co-operation modes - like the establishment of SAS, Nordic Council, Northern passport union, Nordic industrial free trade area within the EFTA - the Nordic countries have not been able to co-operate as intensively in the field of security and defence politics as one at first could expect. This is also due to the fact that Nordic co-operation traditionally functioned best within a broader European (and transatlantic) framework, and not in a specific Norden-centric sphere. In order that the Norden is to take advantage of its opportunities within the EU it is a prerequisite that the Nordic countries take a more relaxed and realistic attitude towards the development of a common European policy on security and defence. Today the Nordic countries have an opportunity which is far from utilised. But as long as Denmark, Sweden and Finland do not stop with this so-called 'collective' Nordic reservation on defence, an optimal co-operation within the EU is long in coming.' (author's abstract)

Recent research in natural sciences shows that boreal forests' dynamics are much more complex than what many models traditionally used in forestry economics reflect. This essay analyses some challenges of accounting for such complexity. When forest owners continuously harvest several species, more than one harvesting strategy can be optimal. Which one it is depends on the forest's initial state. For some initial states, two different strategies may yield the same welfare. If whole stand harvesting of one tree species is preferred, the optimal period between each harvesting occasions depends on other species' dynamics.

In this paper we investigate crude oil and products price dynamics. We present a comparison among ten price series of crude oils and fourteen price series of petroleum products, considering four distinct market areas (Mediterranean, North Western Europe, Latin America and North America) over the period 1994-2002. We provide first a complete analysis of crude oil and product price dynamics using cointegration and error correction models. Subsequently we use the error correction specification to predict crude oil prices over the horizon January 2002-June 2002.The main findings of the paper can be summarized as follows: a) differences in quality are crucial to understand the behaviour of crudes; b) prices of crude oils whose physical characteristics are more similar to the marker show the following regularities: b1) they converge more rapidly to the long-run equilibrium; b2) there is an almost monotonic relation between Mean Absolute Percentage Error values and crude quality, measured by API° gravity and sulphur concentration; c) the price of the marker is the driving variable of the crude price also in the short-run, irrespective of the specific geographical area and the quality of the crude under analysis.

This paper investigates whether failure in innovation at the firm level can account for cross-country heterogeneity in manufacturing productivity growth. There is no strong evidence in the literature on the existence of such link. Our work, however, differs in a number of ways from much of the previous cross-country comparisons on the relationship between innovation and productivity using firm-level data. First, a broader definition of innovation input is used in which research and development is one of several sources of innovation. Second, a quantitative innovation output measure is used in the analysis. Third, the analysis is based on larger and more representative samples of firms including small firms. Finally, an econometric framework based on the knowledge production function accounting for both selectivity and simultaneity bias is employed. The results from Nordic countries show that given difficulties in pooling the data, it is important to specify country-specific models accounting for country-specific effects and differences in the countries national innovation systems.