The Austrian Miracle - Revisited: Testing eight Explanations for High Growth and maybe a ninth

This paper is a first attempt to empirically evaluate some competing hypotheses for the Austrian growth performance. We find that the real appreciations, gross investment, a low duration of unemployment and high youth employment exhibit a significant influence on economic growth. This validates the hard currency policy hypothesis, the macroeconomic management hypothesis, and the microinstitutions hypothesis, whilst all other fail according to this exercise. In particular, we find the Schulmeister-thesis of loose money and the deficit spending hypothesis are even counterfactual. Summarizing, we find that economic policy had its share in promoting growth in the Austrian economy. As a byproduct from our analysis, we find that low levels of unemployment have a significant and positive impact on the growth rate of real GDP, which calls for further theoretical research in this direction.Economic Growth; Growth Determinants; Extreme Bounds Test; CDF-Test; Austria

Empirical Evidence on Growth and Volatility

This paper empirically investigates the relationship between long-run economic growth and output volatility. There is an emerging theoretical literature on the topic which is inconclusive on the size and direction of the relationship. We analyze this relationship empirically for the time series experience of 21 OECD countries between the years 1961 and 2005. After applying a pooled OLS estimator and a series of robustness checks we conclude that there is strong empirical evidence for a positive relationship between output variability and economic growth.Growth, Volatility, Cycles, Innovation

Empirical evidence on growth and business cycles

This paper empirically investigates the relationship between long-run economic growth and output volatility for the time series experience of 25 OECD countries between the years 1960 and 2013. Given the low number of observations, we reject, based on Monte Carlo simulations, the obvious choice of Garch estimation, and instead propose a pooled OLS estimator between a filtered GDP series that eliminates the cyclicality and the fluctuations around this trend. We find strong empirical evidence for a positive relationship between output variability and economic growth. This relationship seems to confirm theoretical literature which proposes such a positive relation

The European Employment Price Index: Implementation and Feasibility in Austria

The study, on which this paper is based upon, has analyzed the implementation and feasibility of the European Employment Price Index (EEPI) in Austria. The European Employment Price Index is a Laspeyres measure of the change in the demand-transaction price of the standardized unit of labor. We find that it is feasible to construct the index with the available company data with an approximate lag length of five month. Most data were easily accessible within firms, with the exception of severance payments, company pensions, and hypothetical costs. Only 228 observations are required to obtain an aggregate EEPI for Austria within +/- one percentage point at the 95 % significance level, whilst some 4800 observations are necessary for disaggregate series, enormously increasing costs of provision

The true art of the tax deal: Evidence of aid flows and bilateral double tax agreements

Nash bargaining model shows that a deal is struck only if both countries mutually benefit. • The model predicts voluntary signature of asymmetric double tax agreements only if there is compensation for the capital importer. Empirical evidence indicates that foreign aid from the capital exporter to the capital importer increases on average by 6 million USD In the signature year of a double tax agreemen

Tax Information Exchange with Developing Countries and Tax Havens

The exchange of tax information has received ample attention recently, due to a number of recent headlines on aggressive tax planning and tax evasion. Whilst both participating tax authorities will gain when foreign investments (FDI) are bilateral, we demonstrate that FDI receiving nations will lose in asymmetric situations. We solve a bargaining model that proves that tax information exchange will only happen voluntarily with compensation for this loss. We then present empirical evidence in a global panel and find that a tax information exchange agreement (TIEA) or a double tax treaty with information exchange (DTT) is more likely when the capital importer is compensated through official development assistence (ODA). We finally demonstrate how the foreign account tax compliance act (FATCA) and similar international initiatives bias the bargaining outcome in favour of capital exporting countries. (authors' abstract)Series: WU International Taxation Research Paper Serie