The study will first outline the way in which Germany's fiscal policy was driven for several decades by a paradigm that centered on deficit control and reduced state involvement in the economy. It will assess the damage wrought by this strategy; for example, underinvestment in infrastructure and...

Proactive regional policies to aide local transformation processes are in the limelight these days. This paper firstly discusses the big paradigm shift in mainstream economics towards this newly gained prominence of place-based policies. Afterwards, the paper introduces the most voluminous case...

Language is a strong and robust determinant of international trade patterns: Countries sharing a common language trade significantly more with each other than countries using different languages, holding other factors constant. In this paper, we show that this trade-promoting effect of language...

We investigate the causal impact of equity market liberalizations in the period 1980-1997 on sectoral export performance across 91 countries. The increased availability of external finance has boosted trade of industries that intensively use relationship-specific inputs, and lowered exports of...

Using comprehensive data for German establishments (1999-2008), we estimate plant-level production functions to analyze if 'cultural diversity' affects total factor productivity. We distinguish diversity in the establishment's workforce and in the aggregate regional labor force where the plant...

We address the effects of wages on employment growth on the basis of a theoretical model from which cost and demand effects can be derived. In the empirical analysis we take a highly disaggregated perspective and apply a newly developed shift-share regression technique on an exhaustive and very...

This paper analyses the impact of dynamic MAR- and Jacobs-externalities on local employment growth in Germany between 1993 and 2001. In order to facilitate a comparison between the neighbouring countries we firstly replicate the study of Combes (2000) on local employment growth in France and...

The home market effect (HME) is a distinguishing feature of the ?new? theory of international trade, but it is uncertain whether this effect survives if one moves beyond the simplifying setup with only two countries. We present a three -country version of the seminal model by Krugman (1980) and...

We develop a two-sector general equilibrium model with monopolistic competition featuring nonhomothetic production and a variable demand elasticity for the manufactured goods. An increase in the relative price of manufacturing varieties can lead to a decline in total industrial output in our...

We investigate whether time-persistent cultural borders impede economic exchange across regions of the same country. To measure cultural differences we evaluate, for the first time in economics, linguistic micro-data about phonological and grammatical features of German dialects. These data are...