Macroeconomic Consequences of Ageing and Directed Technological Change. BertelsmannStiftung Studies

Macroeconomic Consequences of Ageing and Directed Technological Change Demographic projections foresee a pronounced population ageing process in the coming decades. The associated changes in quantity and quality of labour will have an impact on the long-term economic outlook. This study discusses economic implications of current demographic projections for a set of large industrialized economies, which include the largest member states of the EU, the USA and Japan, as well as Austria as an example of a small open economy. The focus of the study is the interplay between demographic and technological trends. The study extends the methodology of the European Commission’s Ageing Report by considering the effects of size and composition of the working-age population on the productivity growth and productivity effect of the ICT-intensity as a measure of directed technological change

Representation-Compatible Power Indices

This paper studies power indices based on average representations of a weighted game. If restricted to account for the lack of power of dummy voters, average representations become coherent measures of voting power, with power distributions being proportional to the distribution of weights in the average representation. This makes these indices representation-compatible, a property not fulfilled by classical power indices. Average representations can be tailored to reveal the equivalence classes of voters defined by the Isbell desirability relation, which leads to a pair of new power indices that ascribes equal power to all members of an equivalence class.Comment: 28 pages, 1 figure, and 11 table

A Behavioural Power Index

We propose an empirically relevant measure of voting power that uses the information about real or assumed voting patterns conveyed by a joint probability distribution on the set of voting outcomes, and apply it to the voting data of the Supreme Court of the United States.a priori voting power ; behavioural voting power ; U.S. Supreme Court

Numerical estimates of risk factors contingent on credit ratings

AbstractAssuming a favorable or an adverse outcome for every combination of a credit class and an industry sector, a binary string, termed as a macroeconomic scenario, is considered. Given historical transition counts and a model for dependence among credit-rating migrations, a probability is assigned to each of the scenarios by maximizing a likelihood function. Applications of this distribution in financial risk analysis are suggested. Two classifications are considered: 7 non-default credit classes with 6 industry sectors and 2 non-default credit classes with 12 industry sectors. We propose a heuristic algorithm for solving the corresponding maximization problems of combinatorial complexity. Probabilities and correlations characterizing riskiness of random events involving several industry sectors and credit classes are reported

A behavioral power index

We propose an empirically relevant measure of voting power that uses the information about real or assumed voting patterns conveyed by a joint probability distribution on the set of voting outcomes, and apply it to the voting data of the Supreme Court of the United States

Structural modeling and forecasting using a cluster of dynamic factor models

We propose a modeling approach involving a series of small-scale dynamic factor models. They are connected to each other within a cluster, whose linkages are derived from Granger-causality tests. This approach merges the benefits of large-scale macroeconomic and small-scale factor models, rendering our Cluster of Dynamic Factor Models (CDFM) useful for model-consistent nowcasting and forecasting on a larger scale. While the CDFM has a simple structure and is easy to replicate, its forecasts are more precise than those of a wide range of competing models and those of professional forecasters. Moreover, the CDFM allows forecasters to introduce their own judgment and hence produce conditional forecasts

Employment and Growth in an Aging Society. A Simulation Study for Austria

In this study we use a long run macroeconomic model for Austria to simulate the effects of aging on employment, output growth, and the solvency of the social security system. By disaggregating the population into six age cohorts and modelling sex specific participation rates for each cohort, we are able to account for the future demographic trends. Apart from a baseline scenario, we perform three alternative simulations that highlight the effects of aging from different perspectives. These include (1) purely demographic developments, (2) increasing labour market imperfections, and (3) higher economic growth due to a productivity shock.Economic growth, Aging, Austria

Recovery of the Austrian economy following the COVID-19 crisis can take up to three years, IIASA Policy Brief #26

Collaboration between researchers from IIASA, WU, WIFO, and the IHS provides scenarios of the medium-run economic effects of the lockdown in Austria using the IIASA macroeconomic simulation model. The analysis suggests that the return to the business-as-usual trend may take up to three years after a steep initial economic downturn due to the lockdown, and a gradual recovery thereafter