Heterogeneous expectations, learning and European inflation dynamics

This paper is the first attempt to investigate the performance of different learning rules in fitting survey data of household and expert inflation expectations in five core European economies (France, Germany, Italy, Netherlands and Spain). Overall it is found that constant gain learning performs well in out-of-sample forecasting. It is also shown that households in high inflation countries are using higher best fitting constant gain parameters than those in low inflation countries. They are hence able to pick up structural changes faster. Professional forecasters update their information sets more frequently than households. Furthermore, household expectations in the Euro Area have not converged to the inflation goal of the ECB, which is to keep inflation below to but close to 2% in the medium run. This contrasts the findings for professional experts, which seem to be more inclined to incorporate the implications of monetary union for the convergence in inflation rates into their expectations. --Monetary policy,heterogeneous expectations,adaptive learning,survey expectations

Communication, decision-making and the optimal degree of transparency of monetary policy committees

This paper develops a theoretical model of dynamic decision-making of a monetary policy committee with heterogeneous members. It investigates the optimal transparency, and the optimal way of transmitting information of committees, by analysing the effects different communication strategies have on financial markets. It is shown that the communication strategy of the central bank committee has a significant effect on the predictability of monetary policy decisions when there is asymmetric information between the committee and market agents. Transparency about the diversity of views of the committee surrounding the economic outlook makes future monetary policy more predictable. However, communicating the diversity of views regarding monetary policy decisions may lead to less predictability of monetary policy in the short term. In addition, it is shown that communication in the form of voting records has the greatest effect on market participants' near term policy expectations. These results support findings of the empirical literature and have strong implications for the optimal communication strategies of committees including the question whether individual voting records should be published. --Monetary Policy Committees,Uncertainty,Communication,Transparency

Grocery retailing in Germany : situation, development and pricing strategies

Over the last four decades, the German food-retailing sector has been subject to continuous structural change. Most important has been the combination of increasing concentration with rising store size and the growing role of discounters implementing an aggressive EDLP pricing strategy. Thus, consumers have benefited from intensive price competition, despite the higher market share of leading food retailers. The analysis of market conduct, in terms of price formation and pricing strategies, reveals a typical situation of imperfect competition. The law of one price certainly does not hold for individual foods. Price levels and pricing strategies diverge substantially across firms and store types. There are successful retailers with an EDLP strategy, as well as others with a HiLo strategy. A major lesson to be learned from the German experience is that increasing concentration in food retailing does not necessarily imply that more market power is exerted at the expense of consumers. Competitive markets are compatible with a high level of concentration as long as a strong competitive fringe, for example discounters, challenges the large chains in food retailing

An Empirical Analysis of the 2000 Corporate Tax Reform in Germany: Effects on Ownership and Control in Listed Companies

This paper is a first attempt to analyse the implications of the 2000 corporate tax reform on ownership concentration in Germany. The empirical results document a fall in ownership concentration and a decrease in the power of top institutional owners including the big banks. The description of German corporate governance as a bank-based system may hence no longer apply. However, contrary to what was expected by proponents of the reform, the corporate tax reform did not revolutionise German corporate governance. Ownership concentration in 2005 is still high compared to the Anglo-American economies and an active market for corporate control is not observed

Ganyu Labour in Malawi: Understanding Rural Households’ Labour Supply Strategies

In Malawi, informal off-farm labour (ganyu) has often been described as a survival strategy which eventually drives poor rural households into even further destitution. Based on data from the Second Integrated Household Survey for 2004, we estimate the determinants of the decision to supply labour in the ganyu market and the amount of labour supplied. Our results do not support the conjecture that ganyu is necessarily a low-return strategy that confines subsistence constrained households to a vicious circle of poverty. However, we do find evidence that ganyu is used as an ex-post coping strategy in the event of shocks, and as an ex-ante social insurance mechanism. Moreover, we generally find a positive reaction of ganyu supply to an increase in the ganyu wages, and no evidence of any backward bending segment of the supply curve for households close to the subsistence level. While ganyu does not appear to drive poor households into further destitution, these households do seem to suffer the most when they face demand side constraints in times of greatest needs. --rural labor supply,insurance strategies,poverty,Malawi

Grocery retailing in Germany: Situation, development and pricing strategies

Like many other industrialised countries Germany has experienced a powerful concentration process in food retailing. There are some issues, however, which make Germany a special case in Europe and among industrialised countries in general. This holds true in terms of market structure and concentration, market development and pricing strategies. The market share of hard discounters like Aldi and Lidl has grown continuously in recent decades and the market share of discounters in general has reached a magnitude that is well above that found in other European countries. This has led to robust price competition in German food retailing. Along with this development, it has been very difficult for inward foreign direct investment (FDI) to gain ground in the German food retailing industry. One example was the market entry by Wal-Mart which, given its initial ambitious goals, was not successful. On the other hand, German hard discounters have strongly affected outward FDI by other German food retailers. In the process of expanding into other markets abroad, these companies have had a positive impact on exporting by the German food industry. This article describes and analyses these major trends in German food retailing in detail. It is organised as follows. The structure of food retailing is described and explained in Section 2. Section 3 deals with the importance of inward and outward FDI in German food retailing. It is discussed in both sections how increased concentration in food retailing affects the marketing chain. Price competition is intense in Germany, and studies of food pricing strategies have used scanner data. Therefore a special case study in Section 4 is the analysis of food pricing strategies in Germany based on scanner-data evidence. The analysis shows that the pricing behaviour of food retailers is characterised by the every-day-low-pricing (EDLP) strategies of discounters and the high-lowpricing (HiLo) strategies of their major competitors. The main elements of pricing policies are indicative of firms' market power: repeated price discounts for major food brands, frequent changes of loss leaders, the dominant role of psychological pricing, and a strong price rigidity for all other foods which are not on special offer. --

Grocery retailing in Poland: Structural changes and foreign direct investment

The development of the Polish food retailing sector is very interesting. With the transition from a socialist to a market economy, structural change in the retailing sector has been especially rapid and the new open markets in Poland have attracted foreign investors throughout the economy in general and in the foodretailing sector in particular. This article describes and analyses the major trends in Polish food retailing. It is organised as follows. The structure of food retailing is described and explained in Section 2, first at the store-type level and then at the firm level. How the powerful concentration process in food retailing has affected the marketing chain is also discussed. Inward foreign direct investment (FDI) in Polish food retailing is covered in Section 3. Given the special importance of FDI in the Polish economy during the transition process, an analysis is carried out of the determinants of FDI in retailing within a cross-country dataset and with a particularly detailed look at FDI in Poland. The results are summarised in Section 5. --

Conference Report: Improving Skills: Evidence from Secondary Analysis of International Surveys

The Improving Skills conference, which took place November 15-16, 2012 in Cyprus, was organised by the European Commission, DG Education and Culture (DG EAC), in close cooperation with the Cypriot Presidency and with the input from CRELL. The aim of the conference was to generate and disseminate knowledge derived from recent secondary analysis of large scale international surveys and assessments such as PISA, TIMSS, ICCS, ESLC and PIRLS. Participants of the conference discussed policy goals and areas requiring further research in the field of improving skills, both in terms of improving basic skills (such as literacy and reading competencies) and transversal skills (enhancing employability, social inclusion and civic participation).JRC.G.3-Econometrics and applied statistic

1,5-Bis(penta­fluoro­phen­yl)-3-phenyl­pent-2-ene-1,5-dione

In the title compound, C23H8F10O2, the three arene rings are twisted one with respect to the other: the two perfluorinated arene rings are tilted to each other by an angle of 60.39 (7)°. They are inclined to the non-fluorinated phenyl unit by 38.85 (7) and 78.74 (7)°. The olefinic double bond adopts an E configuration. The carbonyl groups are not in a coplanar alignment with reference to the neighbouring arene rings. The crystal packing features a number of weak C—H⋯F inter­actions, which leads to the formation of a three-dimensional network

Literature review on income inequality and the effects on social outcomes

In 2009, two epidemiologists, Wilkinson and Pickett, published a book entitled “The Spirit Level, Why More Equal Societies Almost Always Do Better” in which they claim that inequality and its acute perception by the average EU citizen is a toxic element of today’s European societies and one that seems to be associated with decreased levels of trust, civic engagement and participation, as well as to a host of other social challenges from poor health to crime, to underage pregnancies. Despite Wilkinson and Pickett’s intuitively convincing story of the link between higher income inequality and worse social outcomes, the empirical tests are based on simple bivariate correlations, implying that the authors fail to control for all the other numerous factors, which might have had an impact on both the social outcomes and income inequality. In doing so, the empirical associations reported in their book are likely to lead to misleading causal inferences. Nonetheless, Wilkinson and Pickett’s book attracted a lot of attention and called for a more careful analysis of the consequences of rising income inequality. The aim of this report is, hence, to look into sound empirical studies - based on multivariate analysis - which examine the effect of income inequality on important social outcomes related to (i) well-being, (ii) criminality, (iii) health, (iv) social capital, (v) education, (vi) political participation and (vii) female labor market participation. The upshot of this literature review is that higher criminality, reduced political agency and, to some extent, lower social capital formation and well-being appear to be tangible illustrations of the wastage produced by rising income inequality. In addition, there are a number of self-reinforcing loops linked to inequality. A clear illustration of this is the role of inequality in reducing the voting participation of the low income groups and the concomitant consequences in terms of redistributive policies and therefore on income disparities.JRC.G.3-Econometrics and applied statistic