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Whither the german council of economic experts? The past and future of public economic advice
(2014)
The article discusses the development and impact of the German Council of Economic Experts (GCEE). Firstly, the author studies the historical origins and the institutional setup of the GCEE. In the second step, an analyse of the impact of the annual reports of the German Council is given, along with the international comparison with other advisory boards. Finally, the paper discusses the current economic challenges and the need of modernization of the GCEE in special and political advisory boards in general.
This paper develops a new governance scheme for a stable and lasting European Monetary Union (EMU). I demonstrate that existing economic governance is based on flawed incentives especially due to insufficient macroeconomic coordination, failures of institutional enforcement and animal spirit in financial markets. All this caused the European sovereign debt crisis in 2010. Consequently, the EMU crisis is not a conundrum at all rather a failure of national and supranational governance. To tackle this problem, I propose a return to flexible but compulsory rules driven by market forces. The new governance principles shall promote the compliance and effective enforcement of rules.
Die hohen Schulden in einigen Staaten der Europäischen Wirtschafts- und Währungsunion lassen nach wie vor staatliche Insolvenzen befürchten. Um die bereits entstandenen Probleme zu bewältigen, aber auch damit eine solche Situation künftig gar nicht erst eintritt, ist eine staatliche Insolvenzordnung erforderlich.
Venture capital and the innovative power of a state : econometric study including Google data
(2015)
This article focuses on venture capital investments and the innovative power of a state defined by its public infrastructure. The economic implications are evaluated by estimating several panel regression models. The novelty is twofold: on the one hand the research approach and on the other hand the new data set. The data ranges from 1995 to 2014 and consists of 10 European countries plus the US and Canada. For the first time we include Google search data on Venture Capital. The results show a significant increase in Venture Capital is mainly determined by economic conditions such as real GDP growth. The impact of the innovative power of a state is not significant. We find that Google data is positively related and significant in respect to Venture Capital investments too. Consequently, we confirm that private business investments cannot be created by government policy alone rather via solid macroeconomic conditions.
This article investigates the fundamental value of digital platforms, such as Facebook and Google. Despite the transformative nature of digital technologies, it is challenging to value digital services, given that the usage is free of charge. Applying the methodology of discrete choice experiments, we estimated the value of digital free goods. For the first time in the literature, we obtained data for the willingness-to-pay and willingness to-accept, together with socio-economic variables. The customer’s valuation of free digital services is on average, for Google, 121 € per week and Facebook, 28 €.
The European Economic and Monetary Union (EMU) has been in turmoil for more than six years. The present governance rules do not seem to solve the problems neither permanently nor effectively. There is no vision about the future of Europe in the 21st century. This article describes a realignment of the economic governance, which does not necessarily lead to a transfer or political union. However, it solves the current and future challenges. In fact, the redesign of present rules is the most likely as well as legally and economically option today. The key ideais the detachment from the compulsive idea of an ever closer union. However, this vision requires boldness towards greater flexibility together with an exit clause or a state insolvency procedure for incompliant member states.
Nach der Euro- und Wirtschaftskrise in den Jahren seit 2010 verzeichnet die Europäische Union (EU) derzeit einen soliden Wirtschaftsaufschwung in allen Mitgliedstaaten. Der Anteil Europas an der Weltwirtschaft beträgt rund 30 Prozent. Das europäische Wirtschaftswachstum ist 2018 mit 2,1 Prozent sogar größer als das in Deutschland mit 1,6 Prozent. Eine Analyse der Dauer von Aufschwungsphasen zeigt, dass Europa im Vergleich zur Weltwirtschaft sogar unerwarteter Spitzenreiter ist. Seit den 1970er-Jahren liegt die durchschnittliche Dauer eines europäischen Wirtschaftsaufschwungs bei über dreißig Quartalen; sie ist mithin deutlich höher als in den USA und Japan.
This paper studies option pricing based on a reverse engineering (RE) approach. We utilize artificial intelligence in order to numerically compute the prices of options. The data consist of more than 5000 call- and put-options from the German stock market. First, we find that option pricing under reverse engineering obtains a smaller root mean square error to market prices. Second, we show that the reverse engineering model is reliant on training data. In general, the novel idea of reverse engineering is a rewarding direction for future research. It circumvents the limitations of finance theory, among others strong assumptions and numerical approximations under the Black–Scholes model.
The paper studies the reform package proposed by the European Commission on 6 December 2017. First, institutional and economic implications of the reform proposal are analysed. The paper finds that some proposals are beyond the present treaty provisions. For instance, the proposal of a fiscal capacity does not tackle the economic root causes without a supranational transfer mechanism. In fact, the proposed budget neutrality over the medium-term is unfeasible due to cross country heterogeneity in the Eurozone. At the end, the paper develops policy conclusions.
