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DIW Discussion Papers 1046 / 2010
This paper empirically investigates the effects of changes in the interest rate as well as transitory income uncertainty on households' consumption-savings decision. Applying a structural demand model to German survey data, we estimate the uncompensated interest rate elasticity for savings, in line with the literature, to around zero. Accordingly, any policy-induced variation of net returns to savings ...
2010| Martin Beznoska, Richard Ochmann
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DIW Discussion Papers 1045 / 2010
It is increasingly observable that in different industries competitors jointly acquire and share customer data. We propose a modified Hotelling model with two-dimensional consumer heterogeneity to analyze the incentives for such agreements and their welfare implications. In our model the incentives of firms for data acquisition and sharing depend on the willingness of consumers to switch brands. Firms ...
2010| Nicola Jentzsch, Geza Sapi, Irina Suleymanova
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DIW Discussion Papers 1044 / 2010
Taking advantage of the panel structure of the data, the impact of intermarriage on labor market productivity as measured by earnings is examined. Contrarily to previous studies which rely on instrumental variable techniques, selection issues are addressed within a fixed effects framework. The model accounts for short and long term effects as well as general differences between those who intermarry ...
2010| Olga Nottmeyer
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DIW Discussion Papers 1043 / 2010
We provide laboratory evidence that people neglect skewness resulting from compound shocks.
2010| Ludwig Ensthaler, Olga Nottmeyer, Georg Weizsäcker
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DIW Discussion Papers 1042 / 2010
The recession the United States economy entered in December of 2007 is considered to be the most severe downturn the country has experienced since the Great Depression. The unemployment rate reached as high as 10.1 percent in October 2009 - the highest we have seen since the 1982 recession. In this paper we examine the severity of this recession compared to those in the past by examining worker flows ...
2010| Eva Sierminska, Yelena Takhtamanova
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DIW Discussion Papers 1041 / 2010
Using quarterly data from 2000-2007 and applying Error Correction Model and Johansen Co-integration Approaches I estimate the impact of real oil price on the real exchange rate of Azerbaijani manat. Estimation outputs derived from these approaches are very close to each other and indicate that real oil price has statistically significant positive impact on real exchange rate in the long-run. Besides, ...
2010| Fakhri Hasanov
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DIW Discussion Papers 1040 / 2010
After the dramatic rescue package for the euro area, the governing council of the European Central Bank decided to purchase European government bonds - to ensure an “orderly monetary policy transmission mechanism”. Many observers argued that, by bond purchases, national fiscal policies could from now on dominate the common monetary policy. This note argues that they are quite right. The ECB has indeed ...
2010| Ansgar Belke
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DIW Discussion Papers 1039 / 2010
This document provides an overview of the long-term care system, the number and develop-ment of beneficiaries and the long-term care policy in Germany. The report is part of the first stage of the European project ANCIEN (Assessing Needs of Care in European Nations), commissioned by the European Commission under the Seventh Framework Programme (FP7). The first part of the project aims to facilitate ...
2010| Erika Schulz
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DIW Discussion Papers 1038 / 2010
This document provides an overview of the long-term care system, the number and develop-ment of beneficiaries and the long-term care policy in Denmark. The report is part of the first stage of the European project ANCIEN (Assessing Needs of Care in European Nations), commissioned by the European Commission under the Seventh Framework Programme (FP7). The first part of the project aims to facilitate ...
2010| Erika Schulz
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DIW Discussion Papers 1037 / 2010
The empirical relationship between income and longevity has been addressed by a large number of studies, but most were confined to men. In particular, administrative data from public pension systems are less reliable for women because of the loose relationship between own earnings and household income. Following the procedure first used by Hupfeld (2010), we analyze a large data set from the German ...
2010| Friedrich Breyer, Jan Marcus
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DIW Discussion Papers 1036 / 2010
We suggest to use Internet car sale price advertisements for measuring economic inequality between and within German regions. Our estimates of regional income levels and Gini indices based on advertisements are highly, positively correlated with the official figures. This implies that the observed car prices can serve as a reasonably good proxy for income levels. In contrast to the traditional measures, ...
2010| Konstantin A. Kholodilin, Boriss Siliverstovs
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DIW Discussion Papers 1035 / 2010
To quickly adapt to technological change and developments, and thus remain competitive, firms increasingly resort to the use of external technology. This paper investigates whether and to what extent the acquisition of external disembodied technology affects the efficiency and productivity in innovation of technology acquiring firms. Using the stochastic frontier analysis combined with a difference-in-difference ...
2010| Tseveen Gantumur, Andreas Stephan
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DIW Discussion Papers 1034 / 2010
This paper looks into various models that address strategic behavior in the supply of gas by the Mexican monopoly Pemex. The paper has three very strong technical results. First, the netback pricing rule for the price of domestic natural gas (based on a Houston benchmark price) leads to discontinuities in Pemex's revenue function. Second, having Pemex pay for the gas it uses and the gas it flares increases ...
2010| Dagobert L. Brito, Juan Rosellón
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DIW Discussion Papers 1033 / 2010
This article argues that it will be difficult, if not impossible, to control Somali piracy for four reasons. First, Somali piracy is a land-based problem and naval control mechanisms are not changing the incentives for pirates. Second, improving Somalia's anarchic political situation will not necessarily stop piracy. Our analysis demonstrates that piracy is a business which improves with a more stable ...
2010| Sarah Percy, Anja Shortland
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DIW Discussion Papers 1032 / 2010
The EU Emissions Trading Scheme (EU ETS) is the main instrument to reduce greenhouse gas emissions in Europe. Subject to a country specific limit, installations in the EU ETS can use EU allowances (EUA) and certified emissions reductions (CERs) generated through the Clean Development Mechanism (CDM) to fulfil their emission reduction target. The CDM encourages and finances emission reduction projects ...
2010| Alexander Vasa
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DIW Discussion Papers 1031 / 2010
Building on new behavioral and institutional theories, using a data set of about 450 variables and augmenting the Sala-i-Martin definition of robustness, we find evidence in support of the hypothesis that the standard causes of the shadow economy (SE), taxes, the administrative burden and labor market regulations, are not per se crucial in determining the size of the SE. There are many other influences ...
2010| Ulrich Thießen
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DIW Discussion Papers 1030 / 2010
Boone (2008a) proposes a new competition measure based on Relative Profit Differences (RPD) with superior theoretical properties. However, the empirical applicability and robust-ness of the Boone-Indicator is still unknown. This paper aims to address that question. Using a rich, newly built, data set for German manufacturing enterprises, we test the empirical valid-ity of the Boone-Indicator using ...
2010| Alexander Schiersch, Jens Schmidt-Ehmcke
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DIW Discussion Papers 1029 / 2010
In this paper we model the volatility of the spread between the overnight interest rate and the central bank policy rate (the policy spread) for the euro area and the UK during the two main phases of the financial crisis that began in late 2007. During the crisis, the policy spread exhibited signs of volatility, owing to the breakdown in interbank market activity. The determinants of this volatility ...
2010| John Beirne, Guglielmo Maria Caporale, Nicola Spagnolo
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DIW Discussion Papers 1028 / 2010
We apply a merchant transmission model to the trilateral market coupling (TLC) arrangement among the Netherlands, Belgium and France as a generic example, and note that it can be applied to any general market splitting or coupling of Europe's different national power markets. In this merchant framework; the system operator allocates financial transmission rights (FTRs) to investors in transmission ...
2010| Tarjei Kristiansen, Juan Rosellón
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DIW Discussion Papers 1027 / 2010
In 1997, the Comisión Reguladora de Energía of Mexico implemented a netback rule for linking the Mexican natural gas price to the Texas price. At the time, the Texas price reflected a reasonably competitive market. Since that time, there have been dramatic increases in the demand for natural gas and there are various bottlenecks in the supply of natural gas. As a result, the price of natural gas in ...
2010| Dagobert L. Brito, Juan Rosellón