Exchange rate exposure of firms diminishes when imported intermediatesand exports are denominated in currencies that move together. Appreciationsof the domestic currency, raising foreign currency export prices,then also reduce marginal costs

Import Competition and theComposition of Firm Investments

Oct 12th, 2016

We study how foreign competition affects the composition of investments inside firms. A parsimonious model predicts that firms have an incentive to shift their investments towards more short-term assets when exposed to tougher competition. Usin

Ordnungsplatonismus

Sep 9th, 2016

Hans Albert hat in einigen Arbeiten den apriorischen Charakter des „neoklassischen Denkstils” kritisiert und treffend als „Modellplatonismus” bezeichnet. Die apriorische Denkhaltung findet sich aber nicht nur in der von Albert kritisierten Neok

Information Technology and Global Sourcing

Jul 1st, 2016

This paper examines how IT influences global sourcing decisions. It develops a theoretical model to study how IT determines the decisions of firms located in the high-wage North whether to offshore production to a low-wage country in the South.

Multinational banks: Supranational resolution regimes and the importance of capital regulation

Jul 1st, 2016

The lack of coordination in the resolution of multinational banks has led to demandsfor the increased centralization of resolution regimes. However, as thispaper argues, the anticipation of resolution procedures affects the incentives ofhost

Optimal Policies against Profit Shifting: The Role of Controlled-Foreign-Company Rules

Apr 1st, 2016

By introducing controlled-foreign-company (CFC) rules, the parent country of a multinational firm reserves the right to tax the income of the firm's foreign affiliates if the tax rate in the affiliate's host country is below a specified thresho

Temporary Agency Work and the Great Recession

Apr 1st, 2016

We investigate with German data how the use of temporary agency work has helped establishments to manage the economic and financial crisis in 2008/09. We examine the (regular) workforce development, use of short-time work, and business performa

Regulatory competition in capital standards with selection effects among banks

Mar 1st, 2016

Several countries have recently introduced national capital standards exceeding the internationally coordinated Basel III rules, thus suggesting a `race to the top' in capital standards. We study regulatory competition when banks are heterogene

Cooperating over losses and competing overgains: a social dilemma experiment

Mar 1st, 2016

Evidence from studies in international relations, the politics of reform, collectiveaction and price competition suggests that economic agents in social dilemma situationscooperate more to avoid losses than in the pursuit of gains. To test wh

Unleashing Animal Spirits - Self-Control and Overpricing in Experimental Asset Markets

Feb 29th, 2016

One possible determinant of overpricing on asset markets is a lack of self-control abilities of traders. Self-control is the individual capacity to override or inhibit undesired behavioral tendencies such as impulses and to refrain from acting

The Impact of Self-Control on Investment Decisions

Jan 1st, 2016

This paper explores how reduced self-control affects individual investment behavior in two laboratory tasks. For this purpose, I exogenously reduce subjects’ self-control using a well-established psychological treatment. In each task, I find no

Entitlements and Obligations

Jan 1st, 2016

This is an electronic reprint of the second chapter of the book "On Custom in the Economy" by Ekkehart Schlicht that has been published in 1998 by the Clarendon Press, Oxford. The chapter focusses on the behavioral entailments of concluding a c

Review of "Cultures Merging" by Eric Jones

Jan 1st, 2016

This is an electronic reprint of a review of the book "Cultures Merging: A Historical and Economic Critique of Culture" by Eric L. Jones, Princeton: Princeton University Press that appeared in the Journal of Institutional and Theoretical Econom

Capital Adjustment Costs: Implications for Domestic and Export Sales Dynamics

Dec 1st, 2015

Theoretical and empirical work on export dynamics has generally assumed constantmarginal production cost and therefore ignored domestic product market conditions.However, recent studies have documented a negative correlation between firms' do

Do flexible repayment schedules improve the impact of microcredit? Evidence from a randomized evaluation in rural India

Nov 1st, 2015

Microcredit institutions typically apply rigid and fixed repayment schedules when disbursing loans in order to reduce transaction costs, simplify procedures, and inculcate fiscal discipline for better repayment behavior. Microcredit clients, ho

How trust in social dilemmas evolves with age

Aug 6th, 2015

While trust and trustworthiness provide a fundamental foundation for human relationships, little is known about how trusting and trustworthy behavior in social dilemmas is related to age and aging. A few papers use data from surveys such as the

'You must not know about me' - On the willingness to share personal data

Aug 1st, 2015

Although understanding preferences for privacy is of great importance to economists, businesses and politicians little is known about the factors that shape the individual willingness to share personal data. This article provides three experime

Educational expansion and social composition of secondary schools: evidence from Bavarian school registries 1810-1890

Aug 1st, 2015

This paper studies the relationship between social class, educational attainment, and social mobility. While educational expansion has been shown to increase educational attainment and social mobility in contemporary countries, the 19th century

China's Role in the History of Globalization

Jul 30th, 2015

In my view, globalization is a process that has taken place episodically since approximately the beginning of the 16th century. Previously, there were a number of attemps at globalization, which however failed to attain the precondition of regu

Weak Markets, Strong Teachers: Recession at Career Start and Teacher Effectiveness

Jul 1st, 2015

How do alternative job opportunities affect teacher quality? We provide the firstcausal evidence on this question by exploiting business cycle conditions at career start as a source of exogenous variation in the outside options of potential te

Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor’s Technical Progress Function

Jun 19th, 2015

This note proposes a growth model that is derived from the standard Solow growth model by replacing the neoclassical production function with Kaldor’s technical progress function while maintaining a marginalist theory of factor prices in the sp

Directed Technical Change and Capital Deepening: A Reconsideration of Kaldor’s Technical Progress Function

Jun 19th, 2015

Heterogeneous Preferences and Investments in Energy Saving Measures

Jun 5th, 2015

We investigate whether risk, time, environmental, and social preferences affect single family homeowners’ investments in energy efficient renovations and energy quality of their house using established experimental measures and questionnaires.

Trade, Technologies, and the Evolution of Corporate Governance

Jun 1st, 2015

Do international trade and technological change influence how firms create incentives for human capital? I present a model that incorporates agency problems into a framework with firm heterogeneity and human capital. My model indicates that tra

Credit constraints, endogenous innovations,and price setting in international trade

May 21st, 2015

We introduce credit frictions motivated by moral hazard in a general equilibrium model of international trade with two dimensions of heterogeneity and endogenous investments. Firms’ competitiveness consists of capabilities to conduct process an