The current system of fiscal equalisation mainly allocates revenues from federal taxes to the community based on the population size indicator. This method does not sufficiently take into account the special charges that fall upon the Länder and municipalities as a result of their tasks....

Abstract From a political economy perspective, politicians often fail to implement structural reforms. In this contribution we investigate if the resistance to reform is based on the differences in the risk preferences of voters, politicians, and bureaucrats. Based on three surveys among the...

This paper discusses the state of economic policy advice in Germany and describes and analyses the results of a new ranking of German economists which not only measures individual economists’ impact on research (via the h-index), but also their impact on the general public (through media...

In an uncertain world, decisions by market participants are based on expectations. Thus, sentiment indicators reflecting expectations are proven at predicting economic variables. However, survey respondents largely perceive the world through media reports. Typically, crude media information,...

In economic literature comparisons between the American and German Council of Economic Advisors lead to the result that the American Council works quite well, whereas the German Council is broadly criticized. On a closer look, these conclusions are disputable. Therefore, in this contribution we...

This contribution provides a game theoretical derivation of market demand for status goods as a function of the level and distribution of income: if (1) the price is sufficiently low, everyone buys the good; if (2) the price is sufficiently high, only the rich buy the good (a status good in a...

The (socio-)psychological concepts of individual aspiration for con- formity and consistency are integrated into the rational-choice frame- work. By using this integrative approach it is shown that after a shock the aspiration for conformity results in an equilibrium which deviates from the homo...