Volume 223, Issue 5

We analyze the spatial interaction among regions in North America and in Western Europe. We use a gravity model extended by a spatial correlation structure where data allows to evaluate the spatial interaction in two dimensions: level of impact and the length of the spatial tail. This allows us to address to effects external to the gravity model: importance of neighboring regions on the respective region and size of the cluster of regions. We find that the methodology employed improves the statistical quality of results and their economic interpretation. We conclude that national borders matter and that the North American regional structure, i.e. its cluster structure, is more polarized in terms of firm and spatial network structure than that of Europe. We argue that this relates to different types of institutional arrangements with effects on the spatial division of labor. Zusammenfassung Wir untersuchen die regionale Interaktion in Nordamerika und in Westeuropa auf der Grundlage eines Gravitationsmodells, das um eine räumliche Autokorrelationsstruktur erweitert ist. Diese erfaßt die Bedeutung benachbarter Regionen und deren Anzahl, also die Größe des Clusters. Hierdurch verbessert sich die statistische Qualität des Modells und die Möglichkeit der ökonomischen Interpretation. Die Ergebnisse zeigen, daß die nordamerikanischen Regionen in bezug auf interne Unternehmens- und räumliche Netzstruktur polarisierter sind als die europäischen, was vermutlich unterschiedlichen institutionellen Strukturen, die die räumliche Arbeitsteilung beeinflussen, geschuldet ist.

The paper considers the introduction of a surtax on the federal income tax as a means to provide German states with more taxing autonomy. Simulations indicate that even a modest reform would result in strong disparities either in tax revenues or in tax rates across states. Given this background it seems likely that a reform would partially compensate differences in the taxing power by means of adjustments in the revenue sharing and fiscal equalization systems. This would, however, lead to problematic incentives for the states' tax policies. Although horizontal competition would exert a downward pressure on the tax rates, the incentives provided by the horizontal fiscal equalization system and the vertical revenue sharing might well result in excessive taxation.

In this paper, an Unobserved Components Model is used to decompose the balances of Ifo Business survey data into the cyclical, the seasonal and the irregular components, as well as the working day effect. The empirical results show that the total cycle consists of three subcycles with about 3, 5 and 11 years. Each subcycle of the assessment variable is “similar” to the corresponding subcycle of the expectations variable. The seasonal pattern is changing over time and the working day effect is significant for the assessment of the current business situation and for the Ifo Business Climate, but not for the expectation series. Zusammenfassung In dieser Studie wird ein Strukturelles Zeitreihenmodell benutzt, um Zeitreihen des ifo Konjunkturtests (Beurteilung der gegenwärtigen Lage, Erwartungen der zukünftigen Lage und Konjunkturklima) in die zyklische, saisonale und irreguläre Komponente sowie den Arbeitstageffekt zu zerlegen. Die empirischen Ergebnisse zeigen, daß der Gesamtzyklus jeder Reihe sich aus drei Subzyklen mit einer Periodizität von 3, 5 und 11 Jahren zusammensetzt. Zwischen den sich jeweils entsprechenden Subzyklen der Beurteilungs- und Erwartungsvariablen bestehen sehr stabile Lead-Lag-Beziehungen. Die saisonale Komponente ändert sich über die Zeit und der Arbeitstageeffekt ist signifikant für die Beurteilungsvariable und das Konjunkturklima, nicht aber für die Erwartungsvariable.

The intention of this paper is to find a utility function for the often used linear demand functions. The derivation of a utility function with such properties leads to a surprising result: Not only one utility function, but a class of utility functions has the required properties. It also gets clear that in a world of two goods one demand function is linear with respect to the price, and the demand for the second good is described by a convex function in the price-quantity-diagram.

In this paper, the P-star framework is mainly used to examine the importance of money for future price movements in the euro area. Constructing the equilibrium price level, simple-sum M3 and different Divisia M3 aggregates are considered. In addition, nominal money changes are investigated in inflation equations. Adapting an in-sample analysis, Divisia aggregates are important for HICP development and to some extent for GDP deflator movement. The out-of-sample forecasting exercise presents evidence that simple-sum M3 includes more information for the HICP, whereas one of the Divisia aggregates helps to predict the future GDP deflator. Zusammenfassung In dieser Studie wird überwiegend der P-Star-Ansatz verwendet, um die Wichtigkeit des Geldes für die zukünftige Preisentwicklung im Eurowährungsgebiet zu untersuchen. Bei der Konstruktion von gleichgewichtigen Preisniveaus werden das einfache Summenaggregat M3 und verschiedene Divisia-M3-Aggregate betrachtet. Zusätzlich werden nominale Geldmengenwachstumsraten in Inflationsgleichungen eingesetzt. Bei der ex-post Analyse enthalten Divisia-Aggregate Informationen für die HICP-Entwicklung und in geringerem Maße welche für die Entwicklung des BIP-Deflators. Die ex-ante Prognoseanalyse zeigt, daß das Summenaggregat M3 mehr Informationen für den HICP beinhaltet, währenddessen eines der Divisia-Aggregate hilft die zukünftige Entwicklung des BIP-Deflators vorherzusagen.

This paper conceptualises military service and alternative service as a tax. Thus making it possible to evaluate the practice of conscription for basic military or alternative service using the criterions of tax equity. In Germany due to various factors such as disabilities or lack of placements, only 40 to 70 % of a male birth cohort have completed one or the other service, giving a substantial portion of the population a number of advantages. In contrast to many countries, conscientious objection has become common and relatively easy in Germany in the last two decades, making it necessary to take into consideration both types of service in issues of fairness. We use the German Socio-Economic Panel (GSOEP) for testing individual and macro structural fac tors as determinants of serving. We found especially strong effects arising from birth cohort size, increases in conscientious objection and differences in educational level. Persons with a general qualification for a university entrance have a much higher probability of serving compared with persons with a lower degree in the youngest cohorts. Interestingly, this was not the case throughout time.