Abstract I examine a two-period duopolistic market for a durable good where firms compete in prices. Consumers are heterogeneous and can be described according to the following characteristics (i) high valuation and high search intensity; (ii) high valuation and low search intensity; (iii) low valuation and high search intensity; and (iv) low valuation and low search intensity. The market exhibits a new version of the so-called Coasian dynamics. The firms engage in intertemporal price discrimination and only consumers with high valuation and low search intensity purchase the product early. This result is based on a property which dictates that the consumers with high valuation and low search intensity are the most impatient. I call this the skimming through search property. When the difference between the high and the low valuation is small, there is positive probability that the prices in the first period are lower than the prices in the second period, so each firm may set a decreasing sequence of prices in a stochastic sense. Furthermore, when the percentage of consumers with high valuation increases, all consumers pay lower prices. This inter-consumer externality resembles the positive externality caused by an increase in market transparency.
{"title":"Skimming through search","authors":"Evangelos Rouskas","doi":"10.1515/ger-2019-1067","DOIUrl":"https://doi.org/10.1515/ger-2019-1067","url":null,"abstract":"Abstract I examine a two-period duopolistic market for a durable good where firms compete in prices. Consumers are heterogeneous and can be described according to the following characteristics (i) high valuation and high search intensity; (ii) high valuation and low search intensity; (iii) low valuation and high search intensity; and (iv) low valuation and low search intensity. The market exhibits a new version of the so-called Coasian dynamics. The firms engage in intertemporal price discrimination and only consumers with high valuation and low search intensity purchase the product early. This result is based on a property which dictates that the consumers with high valuation and low search intensity are the most impatient. I call this the skimming through search property. When the difference between the high and the low valuation is small, there is positive probability that the prices in the first period are lower than the prices in the second period, so each firm may set a decreasing sequence of prices in a stochastic sense. Furthermore, when the percentage of consumers with high valuation increases, all consumers pay lower prices. This inter-consumer externality resembles the positive externality caused by an increase in market transparency.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"35 1","pages":"129 - 152"},"PeriodicalIF":1.1,"publicationDate":"2020-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"86545889","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
{"title":"Introduction to the special issue on German micro datasets","authors":"P. Egger","doi":"10.1515/ger-2020-0053","DOIUrl":"https://doi.org/10.1515/ger-2020-0053","url":null,"abstract":"","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"17 1","pages":"271 - 271"},"PeriodicalIF":1.1,"publicationDate":"2020-08-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88082688","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract The diminishing importance of retail investors and the institutionalization of markets are arguably a result of the general perception that individuals are not well informed and, hence, are better off using professional services (Davis, 2009). However, this paper provides evidence supporting the opposite. Using a global sample, we examine whether retail trading is informative around the world. Overall, retail investors are documented to enhance price efficiency by trading in the same direction as permanent price changes, contributing 24.8 % to price discovery, and accelerating the information from both scheduled and unscheduled news to be impounded into prices.
{"title":"Does retail trading matter to price discovery?","authors":"Tao Chen","doi":"10.1515/ger-2019-0041","DOIUrl":"https://doi.org/10.1515/ger-2019-0041","url":null,"abstract":"Abstract The diminishing importance of retail investors and the institutionalization of markets are arguably a result of the general perception that individuals are not well informed and, hence, are better off using professional services (Davis, 2009). However, this paper provides evidence supporting the opposite. Using a global sample, we examine whether retail trading is informative around the world. Overall, retail investors are documented to enhance price efficiency by trading in the same direction as permanent price changes, contributing 24.8 % to price discovery, and accelerating the information from both scheduled and unscheduled news to be impounded into prices.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"68 1","pages":"475 - 492"},"PeriodicalIF":1.1,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"88297746","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract COVID-19 hit firms by surprise. In a high frequency, representative panel of German firms, the business outlook declined and business uncertainty increased only at the time when the spread of the COVID-19 pandemic led to domestic policy changes: The announcement of nation-wide school closures on March 13 was followed by the largest change in business perceptions by far. In contrast, the data provides no evidence for the relevance of other potential sources of information on business perceptions: Firms did not learn from foreign policy measures, even if they relied on inputs from China or Italy. The local, county-level spread of COVID-19 cases affected expectations and uncertainty, albeit to a much lesser extent than the domestic policy changes.
{"title":"Sudden stop: When did firms anticipate the potential consequences of COVID-19?","authors":"L. Buchheim, Carla Krolage, S. Link","doi":"10.1515/ger-2020-0139","DOIUrl":"https://doi.org/10.1515/ger-2020-0139","url":null,"abstract":"Abstract COVID-19 hit firms by surprise. In a high frequency, representative panel of German firms, the business outlook declined and business uncertainty increased only at the time when the spread of the COVID-19 pandemic led to domestic policy changes: The announcement of nation-wide school closures on March 13 was followed by the largest change in business perceptions by far. In contrast, the data provides no evidence for the relevance of other potential sources of information on business perceptions: Firms did not learn from foreign policy measures, even if they relied on inputs from China or Italy. The local, county-level spread of COVID-19 cases affected expectations and uncertainty, albeit to a much lesser extent than the domestic policy changes.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"46 1","pages":"79 - 119"},"PeriodicalIF":1.1,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"83215775","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Jean Roch Donsimoni, René Glawion, Bodo Plachter, Klaus Wälde
Abstract We model the evolution of the number of individuals reported sick with COVID-19 in Germany. Our theoretical framework builds on a continuous time Markov chain with four states: healthy without infection, sick, healthy after recovery or despite infection but without symptoms, and deceased. Our quantitative solution matches the number of sick individuals up to the most recent observation and ends with a share of sick individuals following from infection rates and sickness probabilities. We employ this framework to study inter alia the expected peak of the number of sick individuals in Germany in a scenario without public regulation of social contacts. We also study the effects of public regulations. For all scenarios we report the expected end date of the CoV-2 epidemic.
{"title":"Projecting the spread of COVID-19 for Germany","authors":"Jean Roch Donsimoni, René Glawion, Bodo Plachter, Klaus Wälde","doi":"10.1515/ger-2020-0031","DOIUrl":"https://doi.org/10.1515/ger-2020-0031","url":null,"abstract":"Abstract We model the evolution of the number of individuals reported sick with COVID-19 in Germany. Our theoretical framework builds on a continuous time Markov chain with four states: healthy without infection, sick, healthy after recovery or despite infection but without symptoms, and deceased. Our quantitative solution matches the number of sick individuals up to the most recent observation and ends with a share of sick individuals following from infection rates and sickness probabilities. We employ this framework to study inter alia the expected peak of the number of sick individuals in Germany in a scenario without public regulation of social contacts. We also study the effects of public regulations. For all scenarios we report the expected end date of the CoV-2 epidemic.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"5 1","pages":""},"PeriodicalIF":1.1,"publicationDate":"2020-06-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138516970","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Vanessa Dräger, Lotta Heckmann-Draisbach, Christoph Memmel
Abstract Using unique data of a survey among small and medium-sized German banks, we analyze various aspects of risk management. We especially analyze the effect of a 200-bp increase in the interest level. We find that banks seem to reduce the volatility of their net interest margin by exposing themselves to interest rate risk, that they act as if they have a risk budget which they allocate either to interest rate risk or credit risk and that banks’ exposures to interest rate risk and to credit risk are remunerated. In addition, we find that, in the first year, the impairments of banks’ bond portfolios are much larger than the reductions in their net interest income, that banks attenuate the resulting write-downs by liquidating hidden reserves and that banks which use interest derivatives have lower impairments in their bond portfolios.
{"title":"Interest and credit risk management in German banks","authors":"Vanessa Dräger, Lotta Heckmann-Draisbach, Christoph Memmel","doi":"10.1515/GER-2019-0114","DOIUrl":"https://doi.org/10.1515/GER-2019-0114","url":null,"abstract":"Abstract Using unique data of a survey among small and medium-sized German banks, we analyze various aspects of risk management. We especially analyze the effect of a 200-bp increase in the interest level. We find that banks seem to reduce the volatility of their net interest margin by exposing themselves to interest rate risk, that they act as if they have a risk budget which they allocate either to interest rate risk or credit risk and that banks’ exposures to interest rate risk and to credit risk are remunerated. In addition, we find that, in the first year, the impairments of banks’ bond portfolios are much larger than the reductions in their net interest income, that banks attenuate the resulting write-downs by liquidating hidden reserves and that banks which use interest derivatives have lower impairments in their bond portfolios.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"26 1","pages":"63 - 95"},"PeriodicalIF":1.1,"publicationDate":"2020-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84520100","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Carsten Schröder, Johannes König, A. Fedorets, Jan Goebel, M. Grabka, Holger Lüthen, M. Metzing, Felicitas Schikora, S. Liebig
Abstract We provide a concise introduction to a household-panel data infrastructure that provides the international research community with longitudinal data of private households in Germany since 1984: the German Socio-Economic Panel (SOEP). We demonstrate the comparative strength of the SOEP data in answering economically-relevant questions by highlighting its diverse and impactful applications throughout the field.
{"title":"The economic research potentials of the German Socio-Economic Panel study","authors":"Carsten Schröder, Johannes König, A. Fedorets, Jan Goebel, M. Grabka, Holger Lüthen, M. Metzing, Felicitas Schikora, S. Liebig","doi":"10.1515/ger-2020-0033","DOIUrl":"https://doi.org/10.1515/ger-2020-0033","url":null,"abstract":"Abstract We provide a concise introduction to a household-panel data infrastructure that provides the international research community with longitudinal data of private households in Germany since 1984: the German Socio-Economic Panel (SOEP). We demonstrate the comparative strength of the SOEP data in answering economically-relevant questions by highlighting its diverse and impactful applications throughout the field.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"58 1","pages":"335 - 371"},"PeriodicalIF":1.1,"publicationDate":"2020-06-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"84449999","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Sven Blank, Alexander Lipponer, Christoph Schild, Dietmar Scholz
Abstract The research dataset “Microdatabase Direct Investment” is a dataset on foreign direct investment (FDI) stocks based on the official German FDI microdata. The original data are collected on an annual basis by the Deutsche Bundesbank to compile the FDI stock statistics for Germany. Making this official data available to researchers via the MiDi database provides a research dataset on direct investment relationships that is unique both in terms of data available and in the depth of cross-border shareholdings, covering all years since 1999. In this paper, we explain the central properties of this dataset and demonstrate its usefulness for research.
{"title":"Microdatabase Direct Investment (MiDi) – A full survey of German inward and outward investment","authors":"Sven Blank, Alexander Lipponer, Christoph Schild, Dietmar Scholz","doi":"10.1515/ger-2019-0123","DOIUrl":"https://doi.org/10.1515/ger-2019-0123","url":null,"abstract":"Abstract The research dataset “Microdatabase Direct Investment” is a dataset on foreign direct investment (FDI) stocks based on the official German FDI microdata. The original data are collected on an annual basis by the Deutsche Bundesbank to compile the FDI stock statistics for Germany. Making this official data available to researchers via the MiDi database provides a research dataset on direct investment relationships that is unique both in terms of data available and in the depth of cross-border shareholdings, covering all years since 1999. In this paper, we explain the central properties of this dataset and demonstrate its usefulness for research.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"2013 1","pages":"273 - 311"},"PeriodicalIF":1.1,"publicationDate":"2020-05-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"87727832","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Incomplete capital markets and credit constraints for small and medium-sized enterprises (SMEs) are often considered obstacles to economic growth, thus motivating government interventions in capital markets. While such policies are common, it is less clear to what extent these interventions result in firm growth or to which firms interventions should be targeted. Using a unique dataset with information about state bank loans targeting credit-constrained SMEs in Sweden with and without complementary private bank loans, this paper contributes to the literature by studying how these loans affect the targeted firms for several outcome variables. The results suggest that the loans create a one-off increase in investments, with long-term, positive effects for sales and labor productivity but only for firms with 10 or fewer employees. Increased access to capital by firms can therefore produce increases in economic output but only in a specific type of firm. This insight is of key importance in designing policy if the aim is to increase economic growth.
{"title":"Take it to the (public) bank: The efficiency of public bank loans to private firms","authors":"Anders Kärnä","doi":"10.1515/ger-2019-0023","DOIUrl":"https://doi.org/10.1515/ger-2019-0023","url":null,"abstract":"Abstract Incomplete capital markets and credit constraints for small and medium-sized enterprises (SMEs) are often considered obstacles to economic growth, thus motivating government interventions in capital markets. While such policies are common, it is less clear to what extent these interventions result in firm growth or to which firms interventions should be targeted. Using a unique dataset with information about state bank loans targeting credit-constrained SMEs in Sweden with and without complementary private bank loans, this paper contributes to the literature by studying how these loans affect the targeted firms for several outcome variables. The results suggest that the loans create a one-off increase in investments, with long-term, positive effects for sales and labor productivity but only for firms with 10 or fewer employees. Increased access to capital by firms can therefore produce increases in economic output but only in a specific type of firm. This insight is of key importance in designing policy if the aim is to increase economic growth.","PeriodicalId":46476,"journal":{"name":"German Economic Review","volume":"48 1","pages":"27 - 62"},"PeriodicalIF":1.1,"publicationDate":"2020-05-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"80885206","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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