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The German Income Tax Reform 2000, which announced a reduction in income tax rates to be implemented in a series of three stages, was welcomed by the public as a step towards unleashing lurking growth potentials. Nonetheless, in the course of the year 2001 a dispute arose, centering around the...
Persistent link: https://www.econbiz.de/10002520046
In currency exchange markets, there is a conflict between individual decisions and the socially optimal solution. Whereas agents have a coordination motive to take the same position, at the social level effective market coordination per se is not socially valuable, and the central bank aims at...
Persistent link: https://www.econbiz.de/10002521683
In this paper we present three simple theoretical models to explain the influence of the possibility to make non-binding announcements on investment behaviour in public goods settings. Our models build on the idea that voluntary contributions to the supply of a public good might be motivated by...
Persistent link: https://www.econbiz.de/10002521709
Using the variation in national television news of four major member states in the Eurozone, we find causal effects of coverage of high-frequency identified monetary policy announcements on households' inflation expectations in an event study and a generalized Difference-in-Differences approach...
Persistent link: https://www.econbiz.de/10013550202
Investors' return expectations are pivotal in stock markets, but the reasoning behind these expectations remains a black box for economists. This paper sheds light on economic agents' mental models - their subjective understanding - of the stock market, drawing on surveys with the US general...
Persistent link: https://www.econbiz.de/10014383579
A common approach for estimating the macroeconomic effects of oil supply news employs SVAR-IV models identified using changes in oil futures prices around OPEC quota announcements as an instrument. However, we show that the reduced-form oil price innovations, structural shocks, and the...
Persistent link: https://www.econbiz.de/10015145023
Mainstream logic supports the idea that platforms bring large benefits to firms, especially smaller ones, by opening up access to a broader set of consumers and making firms' products easier to find. However, this argument mostly applies to transaction platforms that match consumer preferences...
Persistent link: https://www.econbiz.de/10013285516
I distinguish two types of macroeconomic models. The first type are top-down models in which some or all agents are capable of understanding the whole picture and use this superior information to determine their optimal plans. The second type are bottom-up models in which all agents experience...
Persistent link: https://www.econbiz.de/10003965858
Well-intended policies aimed at reducing greenhouse gas emissions may have unintended undesirable consequences. Recently, a large literature has emerged showing under what conditions this so-called 'Green Paradox' may occur. We review this literature and identify the key mechanisms behind these...
Persistent link: https://www.econbiz.de/10009130265
This paper examines the spillover effects of sovereign rating news on European financial markets during the period 2007-2010. Our main finding is that sovereign rating downgrades have statistically and economically significant spillover effects both across countries and financial markets. The...
Persistent link: https://www.econbiz.de/10009011838