A Theory of Capital Controls as Dynamic Terms-of-Trade Manipulation

This paper develops a simple theory of capital controls as dynamic terms-of-trade manipulation. We study an infinite horizon endowment economy with two countries. One country chooses taxes on international capital flows in order to maximize the welfare of its representative agent, while the other country is passive. We show that capital controls are not guided by the absolute desire to alter the intertemporal price of the goods produced in any given period, but rather by the relative strength of this desire between two consecutive periods. Specifically, it is optimal for the strategic country to tax capital inflows (or subsidize capital outflows) if it grows faster than the rest of the world and to tax capital outflows (or subsidize capital inflows) if it grows more slowly. In the long-run, if relative endowments converge to a steady state, taxes on international capital flows converge to zero. Although our theory emphasizes interest rate manipulation, the country's net financial position per se is irrelevant.

Slow Moving Debt Crises

What circumstances or policies leave sovereign borrowers at the mercy of self-fulfilling increases in interest rates? To answer this question, we study the dynamics of debt and interest rates in a model where default is driven by insolvency. Fiscal deficits and surpluses are subject to shocks but influenced by a fiscal policy rule. Whenever possible the government issues debt to meet its current obligations and defaults otherwise. We show that low and high interest rate equilibria may coexist. Higher interest rates, prompted by fears of default, lead to faster debt accumulation, validating default fears. We call such an equilibrium a slow moving crisis, in contrast to rollover crises where investor runs precipitate immediate default. We investigate how the existence of multiple equilibria is affected by the fiscal policy rule, the maturity of debt, and the level of debt

A Theory of Capital Controls as Dynamic Terms-of-Trade Manipulation

We develop a theory of capital controls as dynamic terms-of-trade manipulation. We study an infinite-horizon endowment economy with two countries. One country chooses taxes on international capital flows in order to maximize the welfare of its representative agent, while the other country is passive. We show that a country growing faster than the rest of the world has incentives to promote domestic savings by taxing capital inflows or subsidizing capital outflows. Although our theory of capital controls emphasizes interest rate manipulation, the pattern of borrowing and lending, per se, is irrelevant

Optimal Time-Consistent Government Debt Maturity

Abstract: This paper develops a model of optimal debt maturity in which the government cannot issue statecontingent debt. As the literature has established, if the government can perfectly commit to fiscal policy, it fully insulates the economy against government spending shocks by purchasing short-term assets and issuing long-term debt. These positions are quantitatively very large relative to GDP and do not need to be actively managed by the government. Our main result is that these conclusions are not robust when lack of commitment is introduced. Under lack of commitment, large and tilted debt positions are very expensive to finance ex-ante since they ex-post exacerbate the government's problem stemming from a lack of commitment. In contrast, a flat maturity structure minimizes the cost entailed by a lack of commitment, though this structure also limits the ability to insure against shocks and increases the volatility of fiscal policy distortions. We show that the optimal time-consistent maturity structure is nearly flat because reducing average borrowing costs is quantitatively more important for welfare than reducing fiscal policy volatility. Thus, under lack of commitment, the government actively manages its debt positions and can approximate optimal policy by confining its debt instruments to consols

Human Practice. Digital Ecologies. Our Future. : 14. Internationale Tagung Wirtschaftsinformatik (WI 2019) : Tagungsband

Erschienen bei: universi - Universitätsverlag Siegen. - ISBN: 978-3-96182-063-4Aus dem Inhalt: Track 1: Produktion & Cyber-Physische Systeme Requirements and a Meta Model for Exchanging Additive Manufacturing Capacities Service Systems, Smart Service Systems and Cyber- Physical Systems—What’s the difference? Towards a Unified Terminology Developing an Industrial IoT Platform – Trade-off between Horizontal and Vertical Approaches Machine Learning und Complex Event Processing: Effiziente Echtzeitauswertung am Beispiel Smart Factory Sensor retrofit for a coffee machine as condition monitoring and predictive maintenance use case Stakeholder-Analyse zum Einsatz IIoT-basierter Frischeinformationen in der Lebensmittelindustrie Towards a Framework for Predictive Maintenance Strategies in Mechanical Engineering - A Method-Oriented Literature Analysis Development of a matching platform for the requirement-oriented selection of cyber physical systems for SMEs Track 2: Logistic Analytics An Empirical Study of Customers’ Behavioral Intention to Use Ridepooling Services – An Extension of the Technology Acceptance Model Modeling Delay Propagation and Transmission in Railway Networks What is the impact of company specific adjustments on the acceptance and diffusion of logistic standards? Robust Route Planning in Intermodal Urban Traffic Track 3: Unternehmensmodellierung & Informationssystemgestaltung (Enterprise Modelling & Information Systems Design) Work System Modeling Method with Different Levels of Specificity and Rigor for Different Stakeholder Purposes Resolving Inconsistencies in Declarative Process Models based on Culpability Measurement Strategic Analysis in the Realm of Enterprise Modeling – On the Example of Blockchain-Based Initiatives for the Electricity Sector Zwischenbetriebliche Integration in der Möbelbranche: Konfigurationen und Einflussfaktoren Novices’ Quality Perceptions and the Acceptance of Process Modeling Grammars Entwicklung einer Definition für Social Business Objects (SBO) zur Modellierung von Unternehmensinformationen Designing a Reference Model for Digital Product Configurators Terminology for Evolving Design Artifacts Business Role-Object Specification: A Language for Behavior-aware Structural Modeling of Business Objects Generating Smart Glasses-based Information Systems with BPMN4SGA: A BPMN Extension for Smart Glasses Applications Using Blockchain in Peer-to-Peer Carsharing to Build Trust in the Sharing Economy Testing in Big Data: An Architecture Pattern for a Development Environment for Innovative, Integrated and Robust Applications Track 4: Lern- und Wissensmanagement (e-Learning and Knowledge Management) eGovernment Competences revisited – A Literature Review on necessary Competences in a Digitalized Public Sector Say Hello to Your New Automated Tutor – A Structured Literature Review on Pedagogical Conversational Agents Teaching the Digital Transformation of Business Processes: Design of a Simulation Game for Information Systems Education Conceptualizing Immersion for Individual Learning in Virtual Reality Designing a Flipped Classroom Course – a Process Model The Influence of Risk-Taking on Knowledge Exchange and Combination Gamified Feedback durch Avatare im Mobile Learning Alexa, Can You Help Me Solve That Problem? - Understanding the Value of Smart Personal Assistants as Tutors for Complex Problem Tasks Track 5: Data Science & Business Analytics Matching with Bundle Preferences: Tradeoff between Fairness and Truthfulness Applied image recognition: guidelines for using deep learning models in practice Yield Prognosis for the Agrarian Management of Vineyards using Deep Learning for Object Counting Reading Between the Lines of Qualitative Data – How to Detect Hidden Structure Based on Codes Online Auctions with Dual-Threshold Algorithms: An Experimental Study and Practical Evaluation Design Features of Non-Financial Reward Programs for Online Reviews: Evaluation based on Google Maps Data Topic Embeddings – A New Approach to Classify Very Short Documents Based on Predefined Topics Leveraging Unstructured Image Data for Product Quality Improvement Decision Support for Real Estate Investors: Improving Real Estate Valuation with 3D City Models and Points of Interest Knowledge Discovery from CVs: A Topic Modeling Procedure Online Product Descriptions – Boost for your Sales? Entscheidungsunterstützung durch historienbasierte Dienstreihenfolgeplanung mit Pattern A Semi-Automated Approach for Generating Online Review Templates Machine Learning goes Measure Management: Leveraging Anomaly Detection and Parts Search to Improve Product-Cost Optimization Bedeutung von Predictive Analytics für den theoretischen Erkenntnisgewinn in der IS-Forschung Track 6: Digitale Transformation und Dienstleistungen Heuristic Theorizing in Software Development: Deriving Design Principles for Smart Glasses-based Systems Mirroring E-service for Brick and Mortar Retail: An Assessment and Survey Taxonomy of Digital Platforms: A Platform Architecture Perspective Value of Star Players in the Digital Age Local Shopping Platforms – Harnessing Locational Advantages for the Digital Transformation of Local Retail Outlets: A Content Analysis A Socio-Technical Approach to Manage Analytics-as-a-Service – Results of an Action Design Research Project Characterizing Approaches to Digital Transformation: Development of a Taxonomy of Digital Units Expectations vs. Reality – Benefits of Smart Services in the Field of Tension between Industry and Science Innovation Networks and Digital Innovation: How Organizations Use Innovation Networks in a Digitized Environment Characterising Social Reading Platforms— A Taxonomy-Based Approach to Structure the Field Less Complex than Expected – What Really Drives IT Consulting Value Modularity Canvas – A Framework for Visualizing Potentials of Service Modularity Towards a Conceptualization of Capabilities for Innovating Business Models in the Industrial Internet of Things A Taxonomy of Barriers to Digital Transformation Ambidexterity in Service Innovation Research: A Systematic Literature Review Design and success factors of an online solution for cross-pillar pension information Track 7: IT-Management und -Strategie A Frugal Support Structure for New Software Implementations in SMEs How to Structure a Company-wide Adoption of Big Data Analytics The Changing Roles of Innovation Actors and Organizational Antecedents in the Digital Age Bewertung des Kundennutzens von Chatbots für den Einsatz im Servicedesk Understanding the Benefits of Agile Software Development in Regulated Environments Are Employees Following the Rules? On the Effectiveness of IT Consumerization Policies Agile and Attached: The Impact of Agile Practices on Agile Team Members’ Affective Organisational Commitment The Complexity Trap – Limits of IT Flexibility for Supporting Organizational Agility in Decentralized Organizations Platform Openness: A Systematic Literature Review and Avenues for Future Research Competence, Fashion and the Case of Blockchain The Digital Platform Otto.de: A Case Study of Growth, Complexity, and Generativity Track 8: eHealth & alternde Gesellschaft Security and Privacy of Personal Health Records in Cloud Computing Environments – An Experimental Exploration of the Impact of Storage Solutions and Data Breaches Patientenintegration durch Pfadsysteme Digitalisierung in der Stressprävention – eine qualitative Interviewstudie zu Nutzenpotenzialen User Dynamics in Mental Health Forums – A Sentiment Analysis Perspective Intent and the Use of Wearables in the Workplace – A Model Development Understanding Patient Pathways in the Context of Integrated Health Care Services - Implications from a Scoping Review Understanding the Habitual Use of Wearable Activity Trackers On the Fit in Fitness Apps: Studying the Interaction of Motivational Affordances and Users’ Goal Orientations in Affecting the Benefits Gained Gamification in Health Behavior Change Support Systems - A Synthesis of Unintended Side Effects Investigating the Influence of Information Incongruity on Trust-Relations within Trilateral Healthcare Settings Track 9: Krisen- und Kontinuitätsmanagement Potentiale von IKT beim Ausfall kritischer Infrastrukturen: Erwartungen, Informationsgewinnung und Mediennutzung der Zivilbevölkerung in Deutschland Fake News Perception in Germany: A Representative Study of People’s Attitudes and Approaches to Counteract Disinformation Analyzing the Potential of Graphical Building Information for Fire Emergency Responses: Findings from a Controlled Experiment Track 10: Human-Computer Interaction Towards a Taxonomy of Platforms for Conversational Agent Design Measuring Service Encounter Satisfaction with Customer Service Chatbots using Sentiment Analysis Self-Tracking and Gamification: Analyzing the Interplay of Motivations, Usage and Motivation Fulfillment Erfolgsfaktoren von Augmented-Reality-Applikationen: Analyse von Nutzerrezensionen mit dem Review-Mining-Verfahren Designing Dynamic Decision Support for Electronic Requirements Negotiations Who is Stressed by Using ICTs? A Qualitative Comparison Analysis with the Big Five Personality Traits to Understand Technostress Walking the Middle Path: How Medium Trade-Off Exposure Leads to Higher Consumer Satisfaction in Recommender Agents Theory-Based Affordances of Utilitarian, Hedonic and Dual-Purposed Technologies: A Literature Review Eliciting Customer Preferences for Shopping Companion Apps: A Service Quality Approach The Role of Early User Participation in Discovering Software – A Case Study from the Context of Smart Glasses The Fluidity of the Self-Concept as a Framework to Explain the Motivation to Play Video Games Heart over Heels? An Empirical Analysis of the Relationship between Emotions and Review Helpfulness for Experience and Credence Goods Track 11: Information Security and Information Privacy Unfolding Concerns about Augmented Reality Technologies: A Qualitative Analysis of User Perceptions To (Psychologically) Own Data is to Protect Data: How Psychological Ownership Determines Protective Behavior in a Work and Private Context Understanding Data Protection Regulations from a Data Management Perspective: A Capability-Based Approach to EU-GDPR On the Difficulties of Incentivizing Online Privacy through Transparency: A Qualitative Survey of the German Health Insurance Market What is Your Selfie Worth? A Field Study on Individuals’ Valuation of Personal Data Justification of Mass Surveillance: A Quantitative Study An Exploratory Study of Risk Perception for Data Disclosure to a Network of Firms Track 12: Umweltinformatik und nachhaltiges Wirtschaften Kommunikationsfäden im Nadelöhr – Fachliche Prozessmodellierung der Nachhaltigkeitskommunikation am Kapitalmarkt Potentiale und Herausforderungen der Materialflusskostenrechnung Computing Incentives for User-Based Relocation in Carsharing Sustainability’s Coming Home: Preliminary Design Principles for the Sustainable Smart District Substitution of hazardous chemical substances using Deep Learning and t-SNE A Hierarchy of DSMLs in Support of Product Life-Cycle Assessment A Survey of Smart Energy Services for Private Households Door-to-Door Mobility Integrators as Keystone Organizations of Smart Ecosystems: Resources and Value Co-Creation – A Literature Review Ein Entscheidungsunterstützungssystem zur ökonomischen Bewertung von Mieterstrom auf Basis der Clusteranalyse Discovering Blockchain for Sustainable Product-Service Systems to enhance the Circular Economy Digitale Rückverfolgbarkeit von Lebensmitteln: Eine verbraucherinformatische Studie Umweltbewusstsein durch audiovisuelles Content Marketing? Eine experimentelle Untersuchung zur Konsumentenbewertung nachhaltiger Smartphones Towards Predictive Energy Management in Information Systems: A Research Proposal A Web Browser-Based Application for Processing and Analyzing Material Flow Models using the MFCA Methodology Track 13: Digital Work - Social, mobile, smart On Conversational Agents in Information Systems Research: Analyzing the Past to Guide Future Work The Potential of Augmented Reality for Improving Occupational First Aid Prevent a Vicious Circle! The Role of Organizational IT-Capability in Attracting IT-affine Applicants Good, Bad, or Both? Conceptualization and Measurement of Ambivalent User Attitudes Towards AI A Case Study on Cross-Hierarchical Communication in Digital Work Environments ‘Show Me Your People Skills’ - Employing CEO Branding for Corporate Reputation Management in Social Media A Multiorganisational Study of the Drivers and Barriers of Enterprise Collaboration Systems-Enabled Change The More the Merrier? The Effect of Size of Core Team Subgroups on Success of Open Source Projects The Impact of Anthropomorphic and Functional Chatbot Design Features in Enterprise Collaboration Systems on User Acceptance Digital Feedback for Digital Work? Affordances and Constraints of a Feedback App at InsurCorp The Effect of Marker-less Augmented Reality on Task and Learning Performance Antecedents for Cyberloafing – A Literature Review Internal Crowd Work as a Source of Empowerment - An Empirical Analysis of the Perception of Employees in a Crowdtesting Project Track 14: Geschäftsmodelle und digitales Unternehmertum Dividing the ICO Jungle: Extracting and Evaluating Design Archetypes Capturing Value from Data: Exploring Factors Influencing Revenue Model Design for Data-Driven Services Understanding the Role of Data for Innovating Business Models: A System Dynamics Perspective Business Model Innovation and Stakeholder: Exploring Mechanisms and Outcomes of Value Creation and Destruction Business Models for Internet of Things Platforms: Empirical Development of a Taxonomy and Archetypes Revitalizing established Industrial Companies: State of the Art and Success Principles of Digital Corporate Incubators When 1+1 is Greater than 2: Concurrence of Additional Digital and Established Business Models within Companies Special Track 1: Student Track Investigating Personalized Price Discrimination of Textile-, Electronics- and General Stores in German Online Retail From Facets to a Universal Definition – An Analysis of IoT Usage in Retail Is the Technostress Creators Inventory Still an Up-To-Date Measurement Instrument? Results of a Large-Scale Interview Study Application of Media Synchronicity Theory to Creative Tasks in Virtual Teams Using the Example of Design Thinking TrustyTweet: An Indicator-based Browser-Plugin to Assist Users in Dealing with Fake News on Twitter Application of Process Mining Techniques to Support Maintenance-Related Objectives How Voice Can Change Customer Satisfaction: A Comparative Analysis between E-Commerce and Voice Commerce Business Process Compliance and Blockchain: How Does the Ethereum Blockchain Address Challenges of Business Process Compliance? Improving Business Model Configuration through a Question-based Approach The Influence of Situational Factors and Gamification on Intrinsic Motivation and Learning Evaluation von ITSM-Tools für Integration und Management von Cloud-Diensten am Beispiel von ServiceNow How Software Promotes the Integration of Sustainability in Business Process Management Criteria Catalog for Industrial IoT Platforms from the Perspective of the Machine Tool Industry Special Track 3: Demos & Prototyping Privacy-friendly User Location Tracking with Smart Devices: The BeaT Prototype Application-oriented robotics in nursing homes Augmented Reality for Set-up Processe Mixed Reality for supporting Remote-Meetings Gamification zur Motivationssteigerung von Werkern bei der Betriebsdatenerfassung Automatically Extracting and Analyzing Customer Needs from Twitter: A “Needmining” Prototype GaNEsHA: Opportunities for Sustainable Transportation in Smart Cities TUCANA: A platform for using local processing power of edge devices for building data-driven services Demonstrator zur Beschreibung und Visualisierung einer kritischen Infrastruktur Entwicklung einer alltagsnahen persuasiven App zur Bewegungsmotivation für ältere Nutzerinnen und Nutzer A browser-based modeling tool for studying the learning of conceptual modeling based on a multi-modal data collection approach Exergames & Dementia: An interactive System for People with Dementia and their Care-Network Workshops Workshop Ethics and Morality in Business Informatics (Workshop Ethik und Moral in der Wirtschaftsinformatik – EMoWI’19) Model-Based Compliance in Information Systems - Foundations, Case Description and Data Set of the MobIS-Challenge for Students and Doctoral Candidates Report of the Workshop on Concepts and Methods of Identifying Digital Potentials in Information Management Control of Systemic Risks in Global Networks - A Grand Challenge to Information Systems Research Die Mitarbeiter von morgen - Kompetenzen künftiger Mitarbeiter im Bereich Business Analytics Digitaler Konsum: Herausforderungen und Chancen der Verbraucherinformati

Slow Moving Debt Crises

We study slow moving debt crises: self-fulfilling equilibria in which high interest rates, due to the fear of a future default, lead to a gradual but faster accumulation of debt, ultimately validating investors’ fear. We show that slow moving crises arise in a variety of settings, both when fiscal policy follows a given rule and when it is chosen by an optimizing government. A key assumption, in all these settings, is that the borrowing government cannot commit to issue a fixed amount of bonds in a given period. We discuss how multiplicity is avoided for low debt levels, for sufficiently responsive fiscal policy rules, and for long enough debt maturities. When the equilibrium is unique, debt dynamics are characterized by a tipping point, below which debt falls and stabilizes and above which debt and default rates grow