Search

Empirical studies show that the elasticity of substitution between capital and labor is larger than one in developed countries but smaller in developing countries. This paper develops a production function which allows for this structure in the elasticity of substitution. The case of a falling real interest rate and capital deepening in the developed countries in the presence of FDI flows from the developed to the developing country is analyzed. It is shown that this structure in the elasticity of substitution can be responsible for a U-shaped relationship between the capital intensity of the developed country and the relative capital intensity of the developing country. This carries over to an inverted U-shaped relationship between the capital intensity of the developed country and FDI profitability.

Technischer Fortschritt und Humankapital sind die Triebfedern des langfristigen globalen Wachstums. Welche Rolle spielen sie im Rahmen der internationalen Arbeitsteilung? Wie wirkt sich die erwartete demographische Schrumpfung in den Industrieländern auf die Entwicklung des Humankapitals aus? Wie sollte die Politik auf den steigenden Bedarf an qualifizierten Arbeitskräften reagieren?

Aufwendungen fur Forschung und Entwicklung werden im Hinblick auf die internationale Wettbewerbsfahigkeit eines Wirtschafts- und Technologiestandorts als besonders bedeutsam eingeschatzt. Wie lasst sich der Zusammenhang zwischen Forschung und wirtschaftlicher Entwicklung empirisch nachweisen? Welchen Rang nimmt Deutschland im internationalen Vergleich der Forschungs- und Innovationsaktivitaten ein? Welche Handlungsoptionen ergeben sich fur die Wirtschaftspolitik?

The Kyoto Protocol on the reduction of greenhouse gas emissions can finally come into force now that Russia has signed it. What has been the trend of emissions in the individual industrial countries in recent years? What options do the countries have? What EU strategy should be chosen for the coming negotiations on the climate regime after 2012?

The industrial nations are often accused of achieving their relative affluence by using natural resources at the expense of the developing countries. Is this accusation justified? Would it really be in the developing countries' interests if the industrial nations drastically reduced their consumption of natural resources, as is so often demanded?

The prospective WTO Millennium Round of negotiations will highlight critical economic issues regarding the application and implementation of the WTO rules to international trade in goods and services. In this book, a distinguished group of academic experts considers the agenda and areas of interest for the next Round in light of Seattle, the functions of the WTO and competition policy issues arising from trade liberalization.

We show that the welfare of a representative consumer can be related to observable aggregate data. To a first order, the change in welfare is summarized by (the present value of) the Solow productivity residual and by the growth rate of the capital stock per capita. We also show that productivity and the capital stock suffice to calculate differences in welfare across countries, with both variables computed as log level deviations from a reference country. These results hold for arbitrary production technology, regardless of the degree of product market competition, and apply to open economies as well if TFP is constructed using absorption rather than GDP as the measure of output. They require that TFP be constructed using prices and quantities as perceived by consumers. Thus, factor shares need to be calculated using after-tax wages and rental rates, and will typically sum to less than one. We apply these results to calculate welfare gaps and growth rates in a sample of developed countries for which high-quality TFP and capital data are available. We find that under realistic scenarios the United Kingdom and Spain had the highest growth rates of welfare over our sample period of 1985-2005, but the United States had the highest level of welfare.

[Weltkonjunktur bleibt vorerst schwach] Die Weltkonjunktur hat im Jahr 2012 weiter an Fahrt verloren. Zur Jahreswende 2012/13 scheint der Tiefpunkt der globalen konjunkturellen Dynamik zwar durchschritten zu sein. Doch belasten Unsicherheiten den Ausblick, die insbesondere im Zusammenhang mit der Staatsschuldenkrise im Euroraum und dem zukünftigen finanzpolitischen Kurs in den Vereinigten Staaten stehen. Für die Prognose ist angenommen, dass sich die Lage im Euroraum allmählich weiter entspannt. Bezüglich der Finanzpolitik in den Vereinigten Staaten unterstellen wir, dass ein Kompromiss erzielt wird, der zwar die Konjunktur im kommenden Jahr merklich dämpft, die Perspektiven auf die mittlere Frist aber verbessert. Unter diesen Voraussetzungen erwarten wir, dass die Produktion in den fortgeschrittenen Volkswirtschaften im Winterhalbjahr 2012/13 allenfalls sehr schwach zulegen und danach langsam an Schwung gewinnen wird. Die Wirtschaft in den Schwellenländern wird, auch dank wirtschaftspolitischer Anregungen, im Verlauf des kommenden Jahres zunehmend Fahrt aufnehmen. Die Weltproduktion insgesamt dürfte im Jahr 2013 mit einer Rate von 3,4 Prozent expandieren, nach voraussichtlich 3,2 Prozent im zu Ende gehenden Jahr. Für 2014 erwarten wir eine wieder etwas stärkere Zunahme des globalen Bruttoinlandsprodukts (3,9 Prozent). - [Deutschland: Ausgeprägte Konjunkturschwäche] Das schwache außenwirtschaftliche Umfeld und die Unsicherheit über die Wirtschaftspolitik zur Bewältigung der Krise im Euroraum belasten weiterhin die wirtschaftliche Entwicklung in Deutschland. Insgesamt haben sich die Konjunkturaussichten gegenüber unserer Herbstprognose deutlich eingetrübt. Für das kommende Jahr prognostizieren wir einen schwachen Anstieg des Bruttoinlandsproduktes um lediglich 0,3 Prozent (gegenüber 1,1 Prozent in der Herbstprognose). Für das übernächste Jahr erwarten wir eine Expansion um 1,5 Prozent - auch dieser Wert bleibt unter unserer bisherigen mittelfristigen Projektion zurück. Die Flaute im Außenhandel dürfte nur nach und nach überwunden werden. Zwar werden von den binnenwirtschaftlichen Triebkräften im Verlauf des Prognosezeitraums wohl zunehmend stärkere Impulse auf die Produktion ausgehen, diese sind aber im kommenden Jahr noch zu schwach, um einen weiteren Rückgang der Kapazitätsauslastung aufzuhalten. Dementsprechend dürfte auch die unternehmerische Investitionstätigkeit zunächst sehr schwach bleiben und sich erst im übernächsten Jahr spürbar beleben, sofern das Vertrauen nicht abermals durch eine Zuspitzung der Krise im Euroraum erschüttert wird. Der Beschäftigungsaufschwung ist vorerst vorbei, allerdings ist damit zu rechnen, dass die Zahl der Erwerbstätigen nahezu stagnieren wird - dies ist angesichts der schwachen gesamtwirtschaftlichen Expansion im kommenden Jahr ein stabilisierender Faktor für die Konjunktur. Die Risiken für die Preisstabilität werden trotz der derzeitigen konjunkturellen Schwächephase größer. Bei einer für die deutsche Volkswirtschaft weiterhin extrem expansiv ausgerichteten Geldpolitik könnten sie sich schon bald materialisieren. Das Defizit in den öffentlichen Kassen dürfte im kommenden Jahr wieder etwas zunehmen. Hierzu tragen sowohl konjunkturelle Effekte als auch expansive Maßnahmen der Finanzpolitik bei.

This paper examines the degree of persistence of youth unemployment (total, male and female) in twenty-four countries by using two alternative measures: the AR coefficient and the fractional differencing parameter, based on short- and long-memory processes respectively. The evidence suggests that persistence is particularly high in Japan and some EU countries such as Spain, Portugal, Ireland and Finland, where appropriate policy actions are of the essence. Specifically, active labour market policies are necessary to prevent short-term unemployment from becoming structural (long-term).

Health workforce shortages in developed countries are perceived to be central drivers of health professionals' international migration, one ramification being negative impacts on developing nations' healthcare delivery. After a descriptive international overview, selected economic issues are discussed for developed and developing countries. Health labour markets' unique characteristics imply great complexity in developed economies involving government intervention, licensure, regulation, and (quasi-)union activity. These features affect migrants' decisions, economic integration, and impacts on the receiving nations' health workforce and society. Developing countries sometimes educate citizens in expectation of emigration, while others pursue international treaties in attempts to manage migrant flows.

Conventional R&D-based growth theory argues that productivity growth is driven by population growth but the data suggest that the erstwhile positive correlation between population and productivity turned negative during the 20th century. In order to resolve this problem we integrate R&D-based innovations into a unified growth framework with micro-founded fertility and schooling behavior. The model explains the historical emergence of R&D-based growth and the subsequent emergence of mass education and the demographic transition. The ongoing child quality-quantity trade-off during the transition explains why in modern economies high growth of productivity and income is associated with low or negative population growth. Because growth in modern economies is based on the education of the workforce, the medium-run prospects for future economic growth - when fertility is going to be below replacement level in virtually all developed countries - are much better than suggested by conventional R&D-based growth theories.

This paper aims to study the extent of integration among developed and emerging stock markets in the onset of globalization through the formulation of a unified conceptual framework that synthesizes the stock valuation model and the convergence hypothesis. Market integration manifests in the convergence of stock valuation ratios of markets in the long run, where valuation ratios are reflective of stock fundamentals driven by common global factors across markets. The spectrum of transition dynamics of markets towards integration is explored with variants of valuation ratios and different notions of convergence. Results reveal the time-varying nature of the global stock market integration process that is characterized by heterogeneous transition experience of markets at both the total market and disaggregated industrial sector levels.

The objective of this study is to investigate the validity of the Kaldor-Verdoorn's Law in explaining the long run determinants of the labor productivity growth for the manufacturing sector of some developed economies (Western European Countries, Australia, Canada, Japan and United States). We consider the period 1973-2006 using data provided by the European Commission - Economics and Financial Affairs. Our findings suggest that the law is valid for the manufacturing as countries show increasing returns to scale. Capital growth and labor cost growth do not appear important in explaining productivity growth. The estimated Verdoorn coefficients are found to be substantially stable throughout the period.

What determines the foreign aid effort of donor countries? We review the existing literature on donors' aid budgets and examine which of the suggested variables robustly determine aid effort, measured as Official Development Assistance (ODA) as a share of gross national income. More specifically, we empirically test 16 hypotheses using panel econometric methods for member countries of the Development Assistance Committee (DAC) in the 1976-2008 period. To test for the robustness of our results, we extend our dataset to 48 possible determinants of aid budgets and apply an Extreme Bounds Analysis (EBA). In our fixed effects regressions, we find that aid inertia, the donor country's GDP per capita, the existence of an independent aid agency, and colonial history have a robust and quantitatively relevant impact on countries' aid efforts. Among the potential substitutes for aid, remittances exert a robust effect. Excluding year fixed effects, political globalization, Russian military capacity, peer effects, aid effectiveness, and government debt also play a significant role.

The UN Conference on Trade and Development (UNCTAD) has a long history of intellectual independence. This article details how Western countries tried to marginalise the organisation and its work — which is often critical of Western powers — during the 2012 UNCTAD conference. While developing countries were able to mobilise and partially beat back these attempts for now, the organisation’s ability to contribute to global macroeconomics remains under threat.

This paper critically discusses the theoretical and empirical literature on the quantitative and qualitative employment impact of technological change, compares the relative explanatory power of the competing theories, and explains in detail the macro and micro evidence on the issue, with reference both to the advanced economies and the developing countries (DCs).

[Dynamik der Weltwirtschaft bleibt gering] Die weltwirtschaftliche Expansion hat sich im Frühjahr 2012 deutlich verlangsamt. Das globale Bruttoinlandsprodukt verzeichnete im zweiten Quartal den geringsten Zuwachs seit Überwindung der weltweiten Rezession im Jahr 2009, und die Konjunkturindikatoren waren bis zuletzt überwiegend abwärts gerichtet. Die weiteren Aussichten hängen zentral von der Entwicklung der Staatsschuldenkrise im Euroraum und den davon ausgehenden Einflüssen auf Nachfrage und Finanzmärkte ab. Unter der Annahme, dass sich die Anspannungen an den Finanzmärkten allmählich verringern, dürfte das Tempo der weltwirtschaftlichen Expansion im Verlauf des kommenden Jahres wieder zunehmen. In den fortgeschrittenen Volkswirtschaften wird die Konjunktur allerdings nur wenig Schwung entwickeln, denn es gibt beträchtliche bremsende Einflüsse von der Finanzpolitik und der private Sektor ist in vielen Ländern immer noch darum bemüht, seinen Verschuldungsgrad zu verringern. Alles in allem haben wir unsere Prognose für den Zuwachs der Weltproduktion im laufenden Jahr nochmals leicht, von 3,4 Prozent im Juni auf nun 3,3 Prozent, verringert. Für 2013 haben wir unsere Erwartungen etwas stärker von 3,9 auf 3,6 Prozent reduziert. Der Verbraucherpreisanstieg dürfte sich in diesem und im nächsten Jahr trotz ungünstiger Einflüsse vonseiten der Rohstoffpreise abschwächen. - [Hartnäckige Rezession im Euroraum] Im Euroraum steht die Konjunktur nach wie vor unter dem starken Einfluss der Staatsschuldenkrise. Die Stimmungsindikatoren deuten auf eine weitere Schrumpfung der gesamtwirtschaftlichen Produktion in der zweiten Jahreshälfte hin. Unserer Einschätzung nach wird die Rezession im kommenden Jahr zwar überwunden, gleichwohl wird die konjunkturelle Belebung in der Grundtendenz moderat bleiben. Insbesondere die Binnennachfrage wird über den gesamten Prognosehorizont hinweg, sowohl durch eine sich nur allmählich zurückbildende Unsicherheit als auch durch eine restriktiv ausgerichtet Finanzpolitik gebremst. Für das laufende Jahr erwarten wir einen Rückgang des Bruttoinlandsprodukts von 0,4 Prozent und im kommenden Jahr nur eine mäßige Expansion von 0,3 Prozent. Die Inflationsrate dürfte bis Jahresende nicht unter die 2-Prozent-Marke sinken, so dass die Verbraucherpreise im Durchschnitt des Jahres 2012 wohl um 2,4 Prozent steigen werden. Die Lage auf dem Arbeitsmarkt wird sich angesichts der trüben Konjunkturaussichten voraussichtlich weiter verschlechtern; wir prognostizieren für das laufende Jahr eine durchschnittliche Arbeitslosenquote von 11,3 Prozent.

The purpose of this paper is to provide a contribution to the identification of the role of entrepreneurship in economic growth by mapping out: 1) alternative ways of looking at entrepreneurship, distinguishing 'creative destruction' from simple 'turbulence'; 2) the different microeconomic determinants of new firm formation, distinguishing 'progressive' from 'regressive' drivers; 3) the relationship between ex-ante characteristics (of the founder) and post-entry performance (of the new firm); and 4) the possible scope for an economic policy aimed at maximizing the impact of entrepreneurship on economic growth. Where possible and appropriate, throughout the paper particular attention is devoted to the specific features characterizing entrepreneurship in developing countries.

Based on eleven themes, this paper synthesizes in-depth case studies that present historical accounts on the development 'success' for a number of more economically advanced countries. The coverage includes Nordic countries (Denmark, Finland, Norway, and Sweden), non-Nordic advanced countries (Ireland, Japan, and Switzerland) and transition economies (Czech Republic, Hungary, and Poland), along with their respective country grouping syntheses. The overall thematic synthesis finds that the historical accounts are replete with recurrent attributes, which are likely to prove useful as development strategy guides for certain developing countries with the proximate conditions.

This paper examines both the determinants and the effects of changes in the rigidity of labor market legislation across countries over time. Recent research identifies the origin of the legal system as being a major determinant of the cross-country variation in the rigidity of employment protection legislation. However, the supporting evidence is largely confined to levels of regulation and is almost exclusively based on international cross-section data for the post-1995 period. This paper introduces a new index capturing the rigidity of employment protection legislation (LAMRIG) for an unbalanced panel of more than 140 countries over time starting in 1960. Although the importance of legal origins in explaining the level of rigidity of labor regulations across countries is replicated using LAMRIG, their explanatory power is much weakened for changes over time (1960-2004.) More important as determinants of such changes are the level of development and other reforms such as trade liberalization. With respect to the effects of changes in the rigidity of labor regulations on growth and inequality, which have been very controversial in the literature, results with LAMRIG support Freeman's conjecture that changes in rigidity do not systematically affect economic growth but do lower income inequality.

Power market integration is analyzed in a two countries model with nationally regulated firms and costly public funds. If generation costs between the two countries are too similar negative business-stealing outweighs efficiency gains so that following integration welfare decreases in both regions. Integration is welfare-enhancing when the cost difference between the two regions is large enough. The benefit from export profits increases total welfare in the exporting country, while the importing country benefits from lower prices. This is a case where market integration also improves the incentives to invest compared to autarky. The investment levels remain inefficient though. With generation facilities over-investment occurs sometimes, while systematic under-investment occurs for transportation facilities. Free-riding reduces the incentives to invest in these public-good components, while business-stealing tends to reduce the capacity for financing new investment.

I quantify the importance of financial structure, labor market rigidities and industry mix for cross-country asymmetries in monetary transmission. To do so, I determine how closely the impulse responses to a monetary policy shock obtained from country-specific vectorautoregressive (VAR) models and a non-standard panel VAR model match. In the country-specific VAR models, the impulse responses vary across countries in an unrestricted fashion. In the panel VAR model, the impulse responses also vary across countries, but only to the extent that countries differ regarding their financial structure, labor market rigidities and industry mix. For a sample of 20 industrialized countries over the time period from 1995 to 2009, I find that up to 70% (50%) of the cross-country asymmetries in the responses of output (prices) to a monetary policy shock can be accounted for by crosscountry differences in financial structure, labor market rigidities and industry mix. While in the short run asymmetries in the output responses arise mainly due to cross-country differences in industry mix, in the medium and long run differences in financial structure and labor market rigidities gain more importance. Moreover, cross-country differences in industry mix appear to be of rather minor importance for cross-country asymmetries in the transmission of monetary policy to prices.

One of the most significant changes in the global economy today is the strong increase in outgoing foreign direct investment (OFDI) from emerging economies to industrialised countries. Whereas investment in less developed countries is often motivated by the sourcing of natural resources and cheap labour, knowledge and technology-seeking is an increasingly important motive for emerging multinationals investing in developed economies. The current paper is focussed on the role of emerging multinationals as knowledge-transfer agents and pursues three aims: First, to unravel the distinguishing features of emerging multinationals (as compared to 'traditional' multinationals), secondly, to critically discuss the usefulness of conventional theoretical concepts in explaining this new phenomenon and thirdly, to launch a research agenda for near-future research on emerging multinationals, with a particular focus on the economic geography of international knowledge flows.

An inherent problem with comparing and ranking competing Value at Risk (VaR) and Expected shortfall (ES) models is that they measure only a single realization of the underlying data generation process. The question is whether there is any significant statistical difference in the performance of different models. Is it only a matter of chance that in a particular market and in particular time period a certain model performs better than some other? It all comes down to a question whether something that we subjectively perceive as different is actually statistically different. We introduce a new methodology for ranking and comparing the performance of VaR and ES models based on a nonparametric ANOVA test. The relative performance of VaR and ES models is analysed using daily returns for sixteen stock market indices (eight each from developed and emerging markets) prior to and during the global financial crisis. Results show that for a large number of different models there is no statistically significant difference in their performance. The top performers are conditional extreme value GARCH model, models based on volatility updating and nonparametric mirrored historical simulation. ES backtesting results are similar to VaR results with the models being even more closely matched. The same models that were the top performers in VaR comparison also perform significantly better in ES estimation.

Using data for a large number of advanced and emerging market economies during 1982-2009, this paper examines the distinct impact of financial integration and globalization on several dimensions of real activity. We find that: (a) financial integration has progressed significantly worldwide, particularly in emerging markets, as well as within regions; (b) advances in financial integration predict better growth prospects; (c) both advances in financial integration and globalization are associated with higher growth, lower growth volatility, and lower probabilities of severe declines in real activity. Advances in financial integration and globalization indeed foster countries' growth, and there appears to be no trade-off between these advances and macroeconomic stability.

Countries differ substantially in the extent to which more productive firms are large and/or are becoming larger and less productive firms are small and/or becoming smaller. A challenge for both emerging and advanced economies is that achieving such static and dynamic allocative efficiency requires an ongoing process of restructuring and reallocation. Such restructuring and reallocation is by its very nature costly. Market structure and institutions that promote well-functioning business dynamism are, accordingly, critical for economic performance. In the 1980s abd 1990s, the US exhibited a robust pace of business dynamism that contributed substantially to US productivity and job growth. There are, however, some disturbing trends in the nature of US business dynamism - for example, the pace of business start-ups has declined secularly especially over the last decade. The decline in the pace of business dynamism may be contributing to the anaemic US recovery from the recent recession.

New technologies do not diffuse instantaneously, and adoption lags are considered a major determinant of productivity differences across firms and nations. In a classic paper, Griliches (1957) documented that new, more-productive seeds of hybrid corn diffused slowly across U.S. agricultural regions, with a 15-year lag between adoption in Iowa and Alabama, and that their diffusion was affected by local conditions such as geography and market potential. The spread of more recent technologies follows a similar pattern. Kiessling (2009) reported evidence of slow adoption of information and communication-technology diffusion both between and within countries. For instance, although personal computers became available in the early 1980s, in 2006, the percentage of the population using computers was 80.6 percent in the United States, 36.3 percent in Spain, 5.6 percent in China, and 2.7 percent in India. Cross-country studies confirm that technology adoption depends on both country-specific factors and characteristics of new technologies. For example, a McKinsey (2001) report on India identified as a major source of inefficiency the fact that firms are too small to benefit from the best technologies and that these may require skills that the country does not possess. The importance of local economic conditions also was stressed by Caselli and Wilson (2004), who showed that countries import technologies complementing their abundant factors; and by Ciccone and Papaioannou (2009), who found that human capital fosters the adoption of skill-augmenting technologies. At the aggregate level, there is evidence that differences in technology are a key determinant of cross-country income disparities.

This paper tests the differential effects of the generosity of the welfare state under free migration and under policy-controlled migration, distinguishing between source developing and developed countries. We utilize free-movement within the EU to examine the free migration regime and compare that to immigration into the EU from two other groups, developed and developing source countries, to capture immigration-restricted regimes. We standardize cross-country education quality differences by using the Hanushek-Woessmann (2009) cognitive skills measure. We find strong support for the magnet hypothesis under the free-migration regime, and the fiscal burden hypothesis under the immigration-restricted regime even after controlling for differences in returns to skills in source and host countries.

Decentralization of decision-making is among the most intriguing recent school reforms, in part because countries went in opposite directions over the past decade and because prior evidence is inconclusive. We suggest that autonomy may be conducive to student achievement in well-developed systems but detrimental in low-performing systems. We construct a panel dataset from the four waves of international PISA tests spanning 2000-2009, comprising over one million students in 42 countries. Relying on panel estimation with country fixed effects, we identify the effect of school autonomy from within-country changes in the average share of schools with autonomy over key elements of school operations. Our results show that autonomy affects student achievement negatively in developing and low-performing countries, but positively in developed and high-performing countries. These results are unaffected by a wide variety of robustness and specification tests, providing confidence in the need for nuanced application of reform ideas.

We develop a composite indicator measuring the performance of national innovation systems. The indicator takes into account both hard factors that are quantifiable (such as R&D spending, number of patents) and soft factors like the assessment of preconditions for innovation by managers. We apply the methodology to a set of 17 industrialized countries on a yearly basis between 2007 and 2009. The indicator combines results from public opinion surveys on the process of change, social capital, trust and science and technology to achieve an assessment of a country's social climate for innovation. After calculating and ranking the innovation indictor scores for the 17 countries, we group them into three classes: innovation leader, middle group and end section. Using multiple sensitivity analysis approaches, we show that the indicator reacts robustly to different weights within these country groups. While leading countries like Switzerland, the USA and the Nordic countries have an innovation system with high scores and ranks in every sub indicator, the middle group consisting among others of Germany Japan, the UK and France, can be characterized by higher variation within ranks. In the end section, countries like Italy and Spain have bad scores for almost all indicators.

We study the effects of policy reforms in the South on the decisions of intrafirm and arm's length production transfers by Northern firms. We show theoretically that relaxing ownership controls and improving contract enforcement can induce multinational companies to expand product varieties to host developing countries, and that a combination of the two reforms has an amplifying effect on product transfers. Consistent with these implications, we find that ownership liberalization and judicial quality played an important role in raising the extensive margin of processing exports in China for the period of 1997-2007. Our findings imply that institutional reforms in developing countries can effectively speed up the product cycle.

We develop a composite indicator measuring the performance of national innovation systems. The indicator takes into account both 'hard' factors that are quantifiable (such as R&D spending, number of patents) and 'soft' factors like the assessment of preconditions for innovation by managers. We apply the methodology to a set of 17 industrialized countries on a yearly basis between 2007 and 2009. The indicator combines results from public opinion surveys on the process of change, social capital, trust and science and technology to achieve an assessment of a country's social climate for innovation. After calculating and ranking the innovation indictor scores for the 17 countries, we group them into three classes: innovation leader, middle group and end section. Using multiple sensitivity analysis approaches, weshow that the indicator reacts robustly to different weights within these country groups. While leading countries like Switzerland, the USA and the Nordic countries have an innovation system with high scores and ranks in every sub indicator, the middle group consisting among others of Germany Japan, the UK and France, can be characterized by higher variation within ranks. In the end section, countries like Italy and Spain have bad scores for almost all indicators.

We analyze the link between financial development and income inequality for a broad unbalanced dataset of 138 developed and developing countries over the years 1960 to 2008. Using credit-to-GDP as measure of financial development, our results reject theoretical models predicting a negative impact of financial development on income inequality measured by the Gini coefficient. Controlling for country fixed effects and GDP per capita, we find that financial development has a positive effect on income inequality. These results are robust to different measures of financial development.

We show with the aid of pooled OLS estimations that investments in improved road infrastructure have the potential to signi cantly reduce transport costs. However, this result can only be clearly con rmed for industrial countries and is of primary importance for production and transportation of agricultural goods. For developing and transition countries we fi nd other determinants such as weather conditions to be more important in determining transport costs. A key variable, especially in these countries, is corruption. At very high levels corruption has the potential to prevent positive effects from roads on transport costs or to even reverse them. This paper contributes to the literature on infrastructure investment by introducing and applying an internationally comparable measure of transport costs which can be calculated for a large and growing number of countries. We isolate important determinants of transport costs and provide insights into international and sectoral differences concerning the impact of roads on transport costs. We conclude that investment in transport infrastructure can have substantial positive effects especially on agricultural production and the efficient marketing of agricultural products but only if speci c conditions are in place.

We address the pitfalls of averaging by exploiting the longitudinal variation in aid to identify sudden and sharp increases in aid flows. Focusing on specific events, we test if aid accelerations correspond to policies and shocks in the recipient country. For a large sample of 145 recipient countries and 33 donors from 1960- 2007, we find that positive regime changes and wars are significant predictors of aid accelerations. Disaggregating aid flows by donors, we find indicative evidence for competing allocation rules, particularly among European donors. We argue that drivers of aid accelerations differ from drivers of average aid flows - a distinction that can reconcile some of the ambiguous empirical results in the aid literature.

Using firm-level data from nine developing countries we demonstrate that (a) certain institutions like restrictive labour market regulations that are considered to be bad for economic growth might be beneficial for production efficiency, whereas (b) good business environment which is considered to be beneficial for economic growth might have an adverse impact on production efficiency. We argue that our results suggest that the debate about the implications of institutional quality is far from being over, and classification of institutions into good and bad might be premature.

[Etwas ruhigere Gangart der Weltkonjunktur] Nachdem die Weltproduktion im Winterhalbjahr 2010/11 in beschleunigtem Tempo gestiegen ist, deuten die jüngsten Indikatoren auf eine aktuell wieder etwas langsamere konjunkturelle Expansion hin. Auch für den weiteren Prognosezeitraum erwarten wir einen moderateren Anstieg des globalen Bruttoinlandsprodukts. Zwar werden einige der derzeit dämpfenden Faktoren an Wirkung verlieren, etwa der kräftige Anstieg der Ölpreise und der Einbruch der Produktion in Japan infolge des Erdbebens. Andere Faktoren dämpfen jedoch die konjunkturelle Expansion unvermindert oder sogar in zunehmendem Maße. In den Schwellenländern wird die Wirtschaftspolitik angesichts bereits sehr hoch ausgelasteter Kapazitäten bestrebt sein, das Tempo des Produktionsanstiegs zu verringern. In den fortgeschrittenen Volkswirtschaften kommt zu den anhaltenden Bemühungen darum, den Verschuldungsgrads im privaten Sektor zu verringern, hinzu, dass die Finanzpolitik zunehmend restriktiv wird. Alles in allem rechnen wir mit einem Anstieg der Weltproduktion im laufenden Jahr um 4,4 Prozent und im kommenden Jahr um 4,1 Prozent; dies ist eine geringfügige Aufwärtskorrektur gegenüber unserer Prognose vom März. Bei diesem Expansionstempo steigt die Auslastung der weltweiten Produktionskapazitäten nur noch moderat. - [Deutsche Wirtschaft in der Hochkonjunktur] Der Aufschwung in Deutschland bleibt nach der Jahreswende 2010/2011 intakt. Nach dem Zwischenspurt zum Jahresauftakt wird hierzulande mehr produziert als vor der Krise und die gesamtwirtschaftlichen Kapazitäten dürften mittlerweile wieder normal ausgelastet sein. Auch wenn das Expansionstempo im Prognosezeitraum nachlassen wird, so bleibt es doch stark genug, um die Kapazitätsauslastung weiter steigen zu lassen. Für das laufende Jahr prognostizieren wir einen Anstieg des preisbereinigten Bruttoinlandsprodukts um 3,6 Prozent. Der stärkste konjunkturelle Sog geht von der Investitionstätigkeit aus, die etwa die Hälfte des Produktionsanstiegs in diesem Jahr absorbiert. Die Zunahme des privaten Verbrauchs fällt mit 1,7 Prozent so kräftig aus wie seit zehn Jahren nicht mehr. Zwar trägt der Außenbeitrag noch gut ein Viertel zur Expansion im Gesamtjahr bei, ab der Jahresmitte ist jedoch mit einer Schubumkehr zu rechnen. Die Aufwärtsentwicklung wird somit maßgeblich von der Binnennachfrage getragen. Im nächsten Jahr dürfte die Wirtschaftsleistung um 1,6 Prozent steigen; die Überauslastung der Produktionskapazitäten erreicht dann fast 1,5 Prozent nach 0,9 Prozent im laufenden Jahr. Mit Arbeitslosenquoten von 7,0 Prozent in diesem und 6,4 Prozent im nächsten Jahr bleibt Deutschland auf dem Weg zur Vollbeschäftigung. Die Inflationsrate dürfte zwar im kommenden Jahr mit 2,0 Prozent niedriger ausfallen als in diesem Jahr, für das wir einen Verbraucherpreisanstieg von 2,4 Prozent erwarten. Hierbei ist jedoch zu beachten, dass die binnenwirtschaftlichen Preisauftriebskräfte mehr und mehr Bedeutung erlangen. So steigen die Lohnstückkosten in diesem Jahr nur um 0,7 Prozent. Im nächsten dürften es schon deutlich über 2 Prozent sein.

Economic theory suggests that high-skilled immigration generally has positive effects on the receiving economy. International student mobility is an important channel through which high-skilled immigrants arrive. The purpose of this paper is to identify some of the key determinants of international student mobility among higher education policies. For this purpose we review the existing evidence and compile a longitudinal dataset covering inflows of international students into a number of advanced economies. We then study the effects of various higher education policies on the inflow of international students using parametric as well as non-parametric statistical methods. We conclude that among higher education policies especially the quality of higher education institutions and the availability of programs taught in the English language can act as an important tool to attract international students, and thus high-skilled migrants.

Das Papier untersucht auf der Grundlage der monetären Überinvestitionstheorien von Wicksell (1898), Mises (1912) and Hayek (1929, 1935) das Scheitern von geld- und finanzpolitischen Regeln zur Kontrolle von übermäßigem Geldmengenwachstum und ausufernder Staatsverschuldung. Es zeigt asymmetrische Geld- und Finanzpolitiken in den großen Industrieländern auf, die zu einem Verfall der Geldmarktzinsen gegen Null und einem Anstieg der Staatsverschuldungen auf globale Rekordstände geführt haben. Das strukturelle Absinken des globalen Zinsniveaus wird als Ursache für globale Überinvestitions- bzw. Boom-und-Krisen-Zyklen gesehen, die zu einem Ausufern der Staatsverschuldung geführt haben. Zur Stabilisierung des langfristigen globalen Wachstums wird die Rückkehr zu symmetrischen Regeln in der Geld- und Finanzpolitik gefordert.