Testing the Phillips Curve: Inflation or Unemployment? Evidence from a Behavioral Experiment

The central thesis of the Phillips Curve is that inflation leads to less unemployment. The link between inflation and employment has been tested empirically many times using econometrics but never by behavioral science. The purpose of this paper is to use behavioral science to test the Phillips Curve thesis. A simplified company was used as a model, where labor demand was related to investments. Our experiments have shown that inflation reduces unemployment in the short term, thus confirming the Phillips hypothesis. This would mean that the central banks are able to counteract unemployment through an inflationary, expansive monetary policy and generate growth in the short term, but there are strong distributional effects

The Image of Man in the Economic Sciences In Light of the Financial Crisis and Recent Research Results

The image of Man in the Economic Sciences is examined in this paper from the perspective of behavioral economics and expanded using new interdisciplinary research findings. Experiments show that there are many people who selflessly do good deeds and feel better for doing so, not worse. This demonstrates a selfless motivation that contradicts the theory of utility maximization, or the concept of homo economicus. The fact that selfless, or even self-sacrificing, acts exist shows that such ethical behavior is part of human behavior. The experiments also show the influence of group behavior on economic decisions, which has been heretofore neglected in economic science. Not bad characters but moral hazards like unilateral compensation schemes are to blame for the subprime crisis. However teaching of ethical values is also needed

The Effects of Money Supply and Interest Rates on Stock Prices, Evidence from Two Behavioral Experiments

What is the impact of interest rate and monetary policy on the stock market? Some studies find a positive impact of expansive monetary policy on stock prices others prove the opposite. This paper examines the effects of monetary expansion and interest rate changes on investment behavior on the stock market by illustrating two behavioral experiments with students. In our experiments the increase of money supply and the decrease of interest rates had a direct positive impact on share prices. These findings support the hypothesis that extreme expansive monetary policy with low, zero or negative interest rates encourage financial bubbles on the stock market. To avoid a crash the exit from such a policy must be slow. As happened in 1929, crashes can damage the financial system and the real economy. Central banks must take this into account in their monetary policy

The Effects of Demand and Interest Rates on Investments, Evidence of Overinvestment from Two Behavioral Experiments

This article analyzes the causes of overinvestment and thus investment cycles with two behavioral experiments. In the experimental simulations increases in demand and cuts in interest rates increased unit profits, which led to uncoordinated and thus collectively too high investments (collective error). This made it possible to demonstrate collective errors that led to overinvestment and investment cycles (boom and bust cycles). Central banks and companies should take this into account when making their decisions. The experiments show the fundamental problem of uncoordinated supply adjustment and a tendency on the part of market participants to neglect the behavior of other actors and to underestimate the influence of the market on their own investment decisions

Zwei Jahre Europäische Währungsunion: Eine Bestandsaufnahme

Vor drei Jahren legte der Europäische Rat die ersten Teilnehmerstaaten der Europäischen Währungsunion fest, die am 1. Januar 1999 begann. Haben die maßgeblichen Akteure der Währungsunion ihre Aufgaben und die in sie gesetzten Erwartungen erfüllt? Welche Faktoren beeinflußten den Euro, und wie wird sich sein Wechselkurs in Zukunft entwickeln? --

Explaining Inflation Persistence by a Time-Varying Taylor Rule

In a simple New Keynesian model, we derive a closed form solution for the inflation persistence parameter as a function of the policy weights in the central bank’s Taylor rule. By estimating the time-varying weights that the FED attaches to inflation and the output gap, we show that the empirically observed changes in U.S. inflation persistence during the period 1975 to 2010 can be well explained by changes in the conduct of monetary policy. Our findings are in line with Benati’s (2008) view that inflation persistence should not be considered a structural parameter in the sense of Lucas

Explaining Inflation-Gap Persistence by a Time-Varying Taylor Rule

In a simple New Keynesian model, we derive a closed form solution for the inflation-gap persistence parameter as a function of the policy weights in the central bank’s Taylor rule. By estimating the time-varying weights that the FED attaches to inflation and the output gap, we show that the empirically observed changes in U.S. inflation-gap persistence during the period 1975 to 2010 can be well explained by changes in the conduct of monetary policy. Our findings are in line with Benati’s (2008) view that inflation persistence should not be considered a structural parameter in the sense of Lucas

Die Finanzmärkte im Spannungsfeld der New Economy

Die Aktienmärkte in Europa und vor allem in den USA melden seit Jahren Rekorde. Skeptiker befürchten jedoch, dass sich diese Hausse als spekulative Blase erweist. Wie ist die derzeitige Entwicklung im historischen Vergleich mit dem Crash von 1929 zu beurteilen? Sind die Kurssteigerungen durch die Entwicklung der Fundamentaldaten gerechtfertigt? Sollten die Notenbanken steuernd eingreifen? --

Asset-Preise als geldpolitische Zielgröße: Das Beispiel der USA

Die internationalen Börsen erleben derzeit einen Crash auf Raten. Gleichzeitig ist die amerikanische Federal Reserve Bank bemüht, mit Zinssenkungen dagegenzuhalten. Wie konnte es zu der Kursblase kommen? Hat die Geldpolitik hier versagt? --

Search for Gamma-ray Line Signatures with H.E.S.S

Many results from astrophysical observations point to a 27% contribution of non-baryonic dark matter to the mass-energy budget of the universe. Although still elusive, strongly motivated candidates in form of weakly interacting massive particles could explain the nature of dark matter, and their annihilation or decay would give rise to detectable signatures in gamma-rays. In 2012, the H.E.S.S. collaboration started taking data with the largest imaging atmospheric Cherenkov telescope in the world which significantly lowered the energy threshold of the already operational four-telescope system. In particular, due to its location and improved performance at low energies, the H.E.S.S. experiment is now in a position to extend the search for dark matter line signals down to the 100 GeV mass range. The sensitivity to line searches with a new full likelihood approach will be discussed and preliminary results from observations with the second phase of H.E.S.S. will be presented.Comment: ICRC 2015 Conference Proceeding, 8 pages, 5 figures, 1 tabl