Bailouts in a common market: a strategic approach

Governments in the EU grant Rescue and Restructure Subsidies to bail out ailing firms. In an international asymmetric Cournot duopoly we study effects of such subsidies on market structure and welfare. We adopt a common market setting, where consumers from the two countries form one market. We show that the subsidy is positive also when it fails to prevent the exit. The reason is a strategic effect, which forces the more efficient firm to make additional cost-reducing effort. When the exit is prevented, allocative and productive efficiencies are lower and the only gaining player is the rescued firm

Timing stability of millisecond pulsars and prospects for gravitational-wave detection

Analysis of high-precision timing observations of an array of approx. 20 millisecond pulsars (a so-called "timing array") may ultimately result in the detection of a stochastic gravitational-wave background. The feasibility of such a detection and the required duration of this type of experiment are determined by the achievable rms of the timing residuals and the timing stability of the pulsars involved. We present results of the first long-term, high-precision timing campaign on a large sample of millisecond pulsars used in gravitational-wave detection projects. We show that the timing residuals of most pulsars in our sample do not contain significant low-frequency noise that could limit the use of these pulsars for decade-long gravitational-wave detection efforts. For our most precisely timed pulsars, intrinsic instabilities of the pulsars or the observing system are shown to contribute to timing irregularities on a five-year timescale below the 100 ns level. Based on those results, realistic sensitivity curves for planned and ongoing timing array efforts are determined. We conclude that prospects for detection of a gravitational-wave background through pulsar timing array efforts within five years to a decade are good.Comment: 21 pages, 5 figures, submitted to MNRA

Effectiveness of bailouts in the EU

Governments in the EU frequently bail out firms in distress by granting state aid. I use data from 86 cases during the years 1995-2003 to examine two issues: the effectiveness of bailouts in preventing bankruptcy and the determinants of bailout policy. The results are threefold. First, the estimated discrete-time hazard rate increases during the first four years after the subsidy and drops after that, suggesting that some bailouts only delayed exit instead of preventing it. The number of failing bailouts could be reduced if European control was tougher. Second, governments’ bailout decisions favored state-owned firms, even though state-owned firms did not outperform private ones in the survival chances. Third, subsidy choice is an endogenous variable in the analysis of the hazard rate. Treating it as exogenous underestimates its impact on the bankruptcy probability. Several policy implications of the results are discussed in the paper

Sinking Budgets and Ballooning Prices: Recent Developments Connected to Military Spending

Military spending in the West generally declined after the Cold War. Given the economic pressures that many of these states confronted, they can be said to have experienced a fortuitous conjunction of lessening security demands with stable if not rising pressures to allocate more resources to social purposes. However, with declining financial resources a good part of military capital in these countries was reduced and most of what remains is growing obsolete. The excessive rise in relative prices associated with major military capital items, a rise only partially associated with an increase in real effectiveness, poses a challenge for many of these states if they are to retain their capacity to provide in some meaningful way for their own military defense.Nach Ende des Kalten Krieges sind allgemein in der westlichen Welt die Militärausgaben gesunken. Angesichts des wirtschaftlichen Drucks, dem sich viele dieser Länder ausgesetzt sahen, kann man sagen, dass dies Ergebnis eines zufälligen Zusammentreffens mehrerer Faktoren ist: geringere Sicherheitsanforderungen treffen auf gleich bleibende bzw. sogar zunehmende Forderungen nach alternativer Budgetverwendung, beispielsweise mehr Mittelausgaben für soziale Zwecke. Durch die verringerten Finanzmittel für die Verteidigung wurde jedoch ein großer Teil der militärischen Waffensysteme reduziert, der verbliebene Rest ist zum größten Teil veraltet. Die relativen Preise für Waffensysteme sind jedoch exzessiv gestiegen, ohne dass diese auf einem gleich großen Anstieg der tatsächlichen Effektivität der Waffensysteme beruhen. So stellt es für viele dieser Staaten eine große Herausforderung dar, wenn sie ihre Fähigkeit bewahren wollen, auf sinnvolle Weise für ihre eigene militärische Sicherheit zu sorgen

A search for an unexpected asymmetry in the production of e+μ− and e−μ+ pairs in proton-proton collisions recorded by the ATLAS detector at root s = 13 TeV

This search, a type not previously performed at ATLAS, uses a comparison of the production cross sections for e(+)mu(-) and e(-)mu(+) pairs to constrain physics processes beyond the Standard Model. It uses 139 fb(-1) of proton-proton collision data recorded at root s = 13 TeV at the LHC. Targeting sources of new physics which prefer final states containing e(+)mu(-) and e(-)mu(+), the search contains two broad signal regions which are used to provide model-independent constraints on the ratio of cross sections at the 2% level. The search also has two special selections targeting supersymmetric models and leptoquark signatures. Observations using one of these selections are able to exclude, at 95% confidence level, singly produced smuons with masses up to 640 GeV in a model in which the only other light sparticle is a neutralino when the R-parity-violating coupling lambda(23)(1)' is close to unity. Observations using the other selection exclude scalar leptoquarks with masses below 1880 GeV when g(1R)(eu) = g(1R)(mu c) = 1, at 95% confidence level. The limit on the coupling reduces to g(1R)(eu) = g(1R)(mu c) = 0.46 for a mass of 1420 GeV

Measurement of the nuclear modification factor for muons from charm and bottom hadrons in Pb+Pb collisions at 5.02 TeV with the ATLAS detector

Heavy-flavour hadron production provides information about the transport properties and microscopic structure of the quark-gluon plasma created in ultra-relativistic heavy-ion collisions. A measurement of the muons from semileptonic decays of charm and bottom hadrons produced in Pb+Pb and pp collisions at a nucleon-nucleon centre-of-mass energy of 5.02 TeV with the ATLAS detector at the Large Hadron Collider is presented. The Pb+Pb data were collected in 2015 and 2018 with sampled integrated luminosities of 208 mu b(-1) and 38 mu b(-1), respectively, and pp data with a sampled integrated luminosity of 1.17 pb(-1) were collected in 2017. Muons from heavy-flavour semileptonic decays are separated from the light-flavour hadronic background using the momentum imbalance between the inner detector and muon spectrometer measurements, and muons originating from charm and bottom decays are further separated via the muon track's transverse impact parameter. Differential yields in Pb+Pb collisions and differential cross sections in pp collisions for such muons are measured as a function of muon transverse momentum from 4 GeV to 30 GeV in the absolute pseudorapidity interval vertical bar eta vertical bar < 2. Nuclear modification factors for charm and bottom muons are presented as a function of muon transverse momentum in intervals of Pb+Pb collision centrality. The bottom muon results are the most precise measurement of b quark nuclear modification at low transverse momentum where reconstruction of B hadrons is challenging. The measured nuclear modification factors quantify a significant suppression of the yields of muons from decays of charm and bottom hadrons, with stronger effects for muons from charm hadron decays

You Don‘t Know What You‘ve Got Till It‘s Gone! Unemployment and Intertemporal Changes in Self-Reported Life Satisfaction

This paper uses concurrently and - for the first time - retrospectively reported life satisfaction from the 1984 to 1987 waves of the German Socio-Economic Panel to study the importance of different comparison standards for the empirical correlation of unemployment and subjective life satisfaction. It is found that unemployed individuals do not only report significantly lower concurrent satisfaction, but also recall reduced satisfaction from past unemployment well, and retrospectively upgrade their past satisfaction scores. Therefore, the short-term negative effects of unemployment on individual life satisfaction reported in the literature so far are likely underestimated. At the same time, the empirical findings cast doubts on the usefulness of subjective life satisfaction for the precise quantification of welfare effects because of changing comparison standards which greatly limit the intertemporal comparability of the data. For this reason, such data also appear to be of limited use for monitoring long-term economic or social development.Diese Studie untersucht den Einfluss verschiedener Vergleichsstandards auf die empirische Korrelation von Arbeitslosigkeit und individueller Lebenszufriedenheit. Dafür werden sowohl longitudinale als auch retrospektive Daten zur subjektiven Lebenszufriedenheit des Deutschen Sozio-ökonomischen Panels aus den Jahren 1984 bis 1987 ausgewertet. Es wird gezeigt, dass Arbeitslose nicht nur zum Zeitpunkt ihrer Arbeitslosigkeit eine geringere Lebenszufriedenheit angeben, sondern sich später auch gut an diese geringere Zufriedenheit erinnern und retrospektiv frühere Angaben zur Lebenszufriedenheit nach oben korrigieren. Die bisher in der Literatur genannten kurzfristigen negativen Effekte von Arbeitslosigkeit auf das individuelle Wohlergehen sind daher wahrscheinlich unterschätzt worden. Allerdings deuten die empirischen Ergebnisse dieser Studie auch darauf hin, dass Daten zur subjektiven Lebenszufriedenheit nur sehr bedingt dazu geeignet sind, Wohlfahrtseffekte zu quantifizieren, da sich die individuellen Evaluationsstandards im Zeitablauf ändern. Aus diesem Grund erscheinen solche Daten auch ungeeignet, um längerfristige sozio-ökonomische Entwicklungen zu beobachten oder zu analysieren

Assessing the Migration Decision of Indian IT-Graduates: An Empirical Analysis

Research hypotheses from various migration-theory approaches are tested through a study focusing on a sample of 1,560 IT university students in India, just prior to the completion of their studies. The representative survey was conducted across India during the summer of 2003. The effect of economic and socio-political factors on the students’ willingness to migrate was examined by using variance analysis. The results show, on the one hand, a generally high willingness among those surveyed to migrate to industrialised countries, but on the other hand, a substantial number of IT-students want to stay in their home country, India. Economic factors tend to play a much greater role on their migration decisions, rather than say the sending or receiving country’s institutional or socio-political aspects. The significance test of individual factors shows that economic as well as institutional considerations; such as good career opportunities, a high income, and a high living standard, are considerably more important than other socio-political as well as institutional factors. Indian IT graduates evaluated better career opportunities much higher in their home country as compared to other locations. In an explicit location comparison of Germany with India and the United States/Canada — the classic immigration countries — as one of the potential host countries, the respondents rated only language/culture significantly higher for the United States/Canada than for Germany. The remaining economic and socio-political factors were rated higher for USA/Canada but do not show any significant differences between Germany, India, and USA/Canada. Interestingly, a location comparison of India with Germany and United States/Canada shows that IT graduates evaluated (salary, career opportunity, self employment, language/culture and social networks) significantly higher for their native country than for Germany and United States/Canada. Hence, in an international competition for skilled labour/best IT specialists, India has also emerged as an attractive location.Wir testen Forschungshypothesen aus migrationtheoretischen Ansätzen anhand einer Stichprobe von 1,560 kurz von dem Studienabschluss stehenden IT-Hochschulabsolventen aus Indien. Die repräsentative Befragung wurde im Sommer 2003 landesweit in Indien durchgeführt. Mit Hilfe der Varianzanalyse wird die Wirkung der ökonomischen sowie gesellschaftspolitischen Einflussfaktoren auf die Migrationbereitschaft der Hochschulabsolventen unter-sucht. Die Ergebnisse zeigen einerseits eine hohe generelle Migration-bereitschaft der indischen IT-Absolventen in Industrieländer. Andererseits ist aber das Verbleiben in ihrem Heimatland Indien eine starke Alternative. Ökonomische Gründe spielen generell für die Migrationentscheidung eine viel wichtigere Rolle als andere institutionelle oder gesellschaftspolitische Aspekte im Herkunfts- und Empfängerland. Der Signifikanztest der einzelnen Einflussfaktoren bestätigt, dass ökonomische Gründe wie gute Karrieremöglich-keiten, hohes Einkommen und besserer Lebensstandard bei allen Empfänger-ländern signifikant wichtiger sind als die gesellschaftspolitischen Determinanten (wie Ausländerfeindlichkeiten, Aufenthalterlaubnis, Sprache und Soziale Netzwerke). Indische IT-Hochschulabsolventen bewerten gute Karrieremöglich-keiten höher in Ihrem Heimland als bei allen Empfängerländern. Bei einem konkreten Standortvergleich zwischen Deutschland, Indien und dem klassischen Immigrationsland USA bewerten die Befragten die Determinanten (wie Soziale Netzwerke, Karrieremöglichkeiten, Möglichkeit der Selbstständig-keit, das Gehalt und Sprache) signifikant wichtiger für Ihr Heimatland als für die USA und Deutschland. Im Wettbewerb um die besten IT-Experten ist Indien im Vergleich zu Nordamerikanischen Ländern und Deutschland ebenfalls ein attraktiver Standort