Are Bubbles Bad? Is a Higher Debt Target for the Eurozone Desirable?
In: CESifo economic studies: a joint initiative of the University of Munich's Center for Economic Studies and the Ifo Institute, Band 62, Heft 2, S. 197-209
ISSN: 1612-7501
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In: CESifo economic studies: a joint initiative of the University of Munich's Center for Economic Studies and the Ifo Institute, Band 62, Heft 2, S. 197-209
ISSN: 1612-7501
In: CESifo working paper series 4939
In: Public finance
The direct impact of local public goods on welfare is relatively easy to measure from land rents. However, the indirect effects on home and job location, on land use, and on agglomeration benefits are hard to pin down. We develop a spatial general equilibrium model for the valuation of these effects. The model is estimated using data on transport infrastructure, commuting behavior, wages, land use and land rents for 3000 ZIP-codes in the Netherlands and for three levels of education. Welfare benefits are shown to differ sharply by workers' educational attainment.
In: CESifo working paper series 3027
In: Monetary policy and international finance
There is a lively debate on the persistence of the current banking crisis' impact on GDP. Impulse Response Functions (IRF) estimated by Cerra and Saxena (2008) suggest that the effects of earlier crises were long-lasting. We show that standard estimates of IRFs are highly sensitive to misspecification of the underlying data generation process. Direct estimation of IRFs by a methodology similar to Jorda's (2005) local projection method is robust to misspecifications of the data generation process but yields biased estimates when country fixed effects are added. We propose a simple method to deal with this bias, which we apply to panel data from 99 countries for the period 1974-2001. Our estimates suggest that an average banking crisis leads to an output loss of around 10 percent with little sign of recovery. GDP losses from banking crises are more severe for African countries and economies in transition.
In: Working paper series Center for Economic Studies ; Ifo Institute ; 653
In: Category 4, Labour markets
SSRN
In: IZA journal of European Labor Studies, Band 3, Heft 1
ISSN: 2193-9012
Since the beginning of the financial crisis in 2008, the Dutch economy lost 6% of gdp relative to Germany, even though the Netherlands (unlike the GIPSI countries) did not face serious problems to finance its sovereign debt. This bad performance is explained by the interaction of fiscal policy and the housing market. This makes the Netherlands an interesting case because these effects can be analyzed in isolation of stress on financial markets. We sketch a simple overlapping generation framework. House price declines lead to a temporary drop in consumption, forcing a reallocation of labour from domestic to tradable industries. This leads to a loss in industry specific human capital, causing a jump in unemployment. The analysis yields a number of lessons for fiscal policy in the aftermath of a financial crisis and for the current EU framework for the evaluation of member states' fiscal policy. Fiscal policy provided too little intergenerational insurance and the EU framework is an obstacle to do that.
BASE
In: IZA journal of European Labor Studies, Band 3, S. 19
ISSN: 2193-9012
In: http://www.izajoels.com/content/3/1/20
Abstract Since the beginning of the financial crisis in 2008, the Dutch economy lost 6% of gdp relative to Germany, even though the Netherlands (unlike the GIPSI countries) did not face serious problems to finance its sovereign debt. This bad performance is explained by the interaction of fiscal policy and the housing market. This makes the Netherlands an interesting case because these effects can be analyzed in isolation of stress on financial markets. We sketch a simple overlapping generation framework. House price declines lead to a temporary drop in consumption, forcing a reallocation of labour from domestic to tradable industries. This leads to a loss in industry specific human capital, causing a jump in unemployment. The analysis yields a number of lessons for fiscal policy in the aftermath of a financial crisis and for the current EU framework for the evaluation of member states' fiscal policy. Fiscal policy provided too little intergenerational insurance and the EU framework is an obstacle to do that. JEL codes E32, E62 and J64
BASE
In: Journal of political economy, Band 113, Heft 2, S. 425-461
ISSN: 1537-534X
In: Journal of political economy, Band 113, Heft 2, S. 425-461
ISSN: 0022-3808
"I apply Ricardo's principle of comparative advantage to a theory of factor substitutability in a model with a continuum of worker and job types. Highly skilled workers have a comparative advantage in complex jobs. The model satisfies the distance-dependent elasticity of substitution (DIDES) characteristic: substitutability between types declines with their skill distance. I analyze changes in relative wages due to human capital accumulation. The concept of a complexity dispersion parameter or compression elasticity is introduced. Empirical studies suggest its value to be equal to two: a 1 percent increase in the stock of human capital reduces the Mincerian return by 2 percent. " (Author's abstract, IAB-Doku) ((en))
In: The economic journal: the journal of the Royal Economic Society, Band 113, Heft 490, S. 801-833
ISSN: 1468-0297