The paper discusses the seriousness of current account imbalances in the last few decades in Europe, with a particular focus on the European Monetary Union. A closer look at the development of current accounts in European economies suggests the existence of some serious structural problems that...

In the present contribution, we concentrate on the process of financial liberalization in a specific context of European economic and monetary integration. We implement de facto and de jure measures of financial liberalization and find that formal aspects of financial openness generate a...

This paper uses German household data on apparel purchases to show that, conditional on income, households differ with respect to their shopping outlets and the prices they pay. We estimate that high-price retailers are not affected by changes in import prices. By contrast, the pass-through for...

In recent decades, most industrialized countries experienced declining population growth rates caused by declining fertility and associated with rising life expectancy. We analyze the effect of continuing demographic change on medium- and long-run economic growth by setting forth an R&D-based...

We set up a simple overlapping generation model that allows us to distinguish between life expectancy and active life expectancy. We show that individuals optimally adjust to a longer active life by educating more and, if the labor supply elasticity is high enough, by supplying less labor. When...

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...

Is government ideology important for fiscal policy? I study this question with data from all German States over the period 1975-2005. To identify the effect of ideology, I rely on a fuzzy regression discontinuity design. I find that left-wing state governments spend more than state governments...

When grades lose their informative value because the percentage of students receiving the best grade rises without any corresponding increase in ability, this is called grade inflation. Conventional wisdom says that such grade inflation is unavoidable since it is essentially costless to award...

Traditionally economic theory assumes that preferences are stable facilitating positive predictions of economic policy. While there is conflicting experimental evidence on the temporal stability of cooperation preferences in public goods provision, surprisingly little is known about their...

In the aftermath of the financial crisis trust, in the European Central Bank (ECB) has reached an historical low. Taking panel data and using a fixed effects DFGLS estimation for a 12–country sample over the time period 1999 to 2011 with a total of 312 observations, this paper detects a...