The Two Triangles: what did Wicksell and Keynes know about macroeconomics that modern economists do not (consider)?

The current consensus in macroeconomics, as represented by the New Neoclassical Synthesis, is to work within frameworks that combine intertemporal optimization, imperfect competition and sticky prices. We contrast this “NNS triangle” with a model in the spirit of Wicksell and Keynes that sets the focus on interest-rate misalignments as problems of intertemporal coordination of consumption and production plans in imperfect capital markets. We show that, with minimal deviations from the standard perfect competition model, a model structure can be derived that looks similar to the NNS triangle, but yields substantially different conclusions with regard to the dynamics of inflation and output gaps and to the design of the appropriate rule for monetary policy.

Beschäftigungswirkungen der Internationalisierung - Eine Studie aus- und einfließender Direktinvestitionen der Metall- und Elektroindustrie im Raum Stuttgart

Globalisierung' lautet das Schlagwort, das seit geraumer Zeit die wirtschaftspolitischen Debatten beherrscht. Zunächst war damit vor allem die Ãffnung von nationalen Güterund Finanzmärkten gemeint, die mit einem enormen Wachstum der Güterexporte und internationalen Finanztransaktionen einherging. Die Mobilität des Kapitals hat nicht nur in der finanziellen, sondern auch in der realen Dimension zugenommen. Das Zwillingsschlagwort ‚Internationalisierung' kennzeichnet somit einen Trend zur grenzüberschreitenden Vernetzung von Produktionsprozessen innerhalb einzelner Unternehmen, aber auch eine erhebliche Erweiterung der Optionen zur Verlagerung von Produktionsstandorten. Dieser zweite Aspekt gerät angesichts der hohen Arbeitslosigkeit in Deutschland immer wieder in den Mittelpunkt von Kontroversen. Hierbei dient häufig das Verhältnis von aus- zu einflieÃenden Direktinvestitionen als 'globaler Indikator' für die Qualität des Standorts Deutschland. Der chronische Ãberschuà der ausflieÃenden Direktinvestitionen in der Zahlungsbilanz wird gemeinhin als Zeichen für eine 'Standortschwäche' gedeutet, die zu Beschäftigungsverlusten führen muÃ. --Foreign Direct Investment,Stuttgart,Metal Industry,Electrical Goods Industry

Política econômica e o Bundesbank: o modelo sueco "versus" o modelo alemão

This paper confronts two post-war economic models, the Sweedish and the German, and explains why the German was better succeded than the Sweedish. The causes for the success and failure of the economic policies of these countries lie in the same factors, among which is the role of the German Bundesbank. The Sweedish Model priveledged full employment, while the German was focused on low inflation rates. The article shows that the German combination of strong export orientation with the anchor position of the Deutsche Mark hampered the "export of sustainable stability" to other small open economies, such as Sweeden. Therefore, the popular belief that Sweeden should copy the German Model lies in an incomprehension of how these Models worked. The article also points out that in principle the ongoing processes of integration inside Germany and in Europe can reduce the conflicts of monetary asymmetry in the European Exchange Rate Mechanism, that brought much trouble to the Swedish Model. To finance the transformation of East Germany and harmonizing the financial markets in Europe might undermine the dominant position of the D-Mark.This paper confronts two post-war economic models, the Sweedish and the German, and explains why the German was better succeded than the Sweedish. The causes for the success and failure of the economic policies of these countries lie in the same factors, among which is the role of the German Bundesbank. The Sweedish Model priveledged full employment, while the German was focused on low inflation rates. The article shows that the German combination of strong export orientation with the anchor position of the Deutsche Mark hampered the "export of sustainable stability" to other small open economies, such as Sweeden. Therefore, the popular belief that Sweeden should copy the German Model lies in an incomprehension of how these Models worked. The article also points out that in principle the ongoing processes of integration inside Germany and in Europe can reduce the conflicts of monetary asymmetry in the European Exchange Rate Mechanism, that brought much trouble to the Swedish Model. To finance the transformation of East Germany and harmonizing the financial markets in Europe might undermine the dominant position of the D-Mark

The rating spillover from banks to sovereigns: an empirical investigation across the European Union

This paper investigates how changes in European banks’ credit risk affect their host countries’ sovereign risk by exploring bank-to-sovereign rating spillover effects. Using credit rating data from Standard & Poor’s, Moody’s, and Fitch for the period ranging from 2002 to 2016, we identify both positive and negative bank-to-sovereign spillover effects, and find the negative rating spillover effect to be more pronounced than the positive one. Further, we provide evidence on differences among the three rating agencies in terms of the occurrence of positive spillovers, and the degree of negative spillovers. Our results are robust to the changes in model specifications with respect to the currency type of ratings, the structure of regression models, and the approach used to link bank and sovereign ratings. Overall, our analysis sheds new light on how information related to systemic risks emanating from the banking sector affects domestic sovereign credit ratings, and thereby complements previous research focusing on the opposite sovereign-to-bank rating transmission channel