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Can right‐wing terrorism increase support for far‐right populist parties and if so, why? Exploiting quasi‐random variation between successful and failed attacks across German municipalities, we find that successful attacks lead to significant increases in the vote share for the right‐wing, populist Alternative für Deutschland (AfD) party in state elections. Investigating channels, we find that successful attacks lead to differential increases in turnout which are mainly captured by the AfD. Using the German SOEP, a longitudinal panel of individuals, we investigate terror’s impact on individual political attitudes. We first document that people residing in municipalities that experience successful or failed attacks are indistinguishable. We then show that successful terror leads individuals to prefer the AfD, adopt more populist attitudes and report significantly greater political participation at the local level. Terror also leads voters to migrate away from (some) mainstream parties to the AfD. We also find differential media reporting: successful attacks receive more media coverage among local and regional publishers, coverage which makes significantly more use of words related to Islam and terror. Our results hold despite the fact that most attacks are motivated by right‐wing causes and targeted against migrants. Moreover, successful attacks that receive the most media coverage have nearly double the effect on the AfD vote share in state elections and they also increase the AfD vote share in Federal elections, highlighting media salience as a driver of our overall results.
From its early post-war catch-up phase, Germany’s formidable export engine has been its consistent driver of growth. But Germany has almost equally consistently run current account surpluses. Exports have powered the dynamic phases and helped emerge from stagnation. Volatile external demand, in turn, has elevated German GDP growth volatility by advanced countries’ standards, keeping domestic consumption growth at surprisingly low levels. As a consequence, despite the size of its economy and important labor market reforms, Germany’s ability to act as global locomotive has been limited. With increasing competition in its traditional areas of manufacturing, a more domestically-driven growth dynamic, especially in the production and delivery of services, will be good for Germany and for the global economy. Absent such an effort, German growth will remain constrained, and Germany will play only a modest role in spurring growth elsewhere.
Testing frequency and severity risk under various information regimes and implications in insurance
(2023)
We build on Peter et al. (2017) who examined the benefit of testing frequency risk under various information regimes. We first consider testing only severity risk, and whether the principle of indemnity, i.e. the usual contract term that excludes claims payments above the resulting insured loss, affects the insurance contracts offered and purchased. Under information regimes which are less restrictive (in terms of obtaining and using customer information), it is possible for the insurer to offer different contracts for tested and untested individuals. In the absence of the principle of indemnity, individuals will test their severity risk and a separating equilibrium ensues. With the principle of indemnity, given an actuarially fair pooled contract, individuals will not test for severity under less restrictive information regimes; a pooling equilibrium thus ensues. Under more restrictive information regimes, the insurer offers separating contracts. Individuals will test for severity and purchase appropriate contracts. We also consider testing for both frequency and severity risk. The results here are more varied. The highest gain in efficiency from testing results from one of the more restrictive information regimes. Generally under all information regimes, there is a greater gain in efficiency without the principle of indemnity than with the principle of indemnity.
Many people do not understand the concepts of life expectancy and longevity risk, potentially leading them to under-save for retirement or to not purchase longevity insurance, which in turn could reduce wellbeing at older ages. We investigate alternative ways to increase the salience of both concepts, allowing us to assess whether these change peoples’ perceptions and financial decision making. Using randomly-assigned vignettes providing subjects with information about either life expectancy or longevity, we show that merely prompting people to think about financial decisions changes their perceptions regarding subjective survival probabilities. Moreover, this information also boosts respondents’ interest in saving and demand for longevity insurance. In particular, longevity information influences both subjective survival probabilities and financial decisions, while life expectancy information influences only annuity choices. We provide some evidence that many people are simply unaware of longevity risk.
We investigate the relationship between anchoring and the emergence of bubbles in experimental asset markets. We show that setting a visual anchor at the fundamental value (FV) in the first period only is sufficient to eliminate or to significantly reduce bubbles in laboratory asset markets. If no FV-anchor is set, bubble-crash patterns emerge. Our results indicate that bubbles in laboratory environments are primarily sparked in the first period. If prices are initiated around the FV, they stay close to the FV over the entire trading horizon. Our insights can be related to initial public offerings and the interaction between prices set on pre-opening markets and subsequent intra-day price dynamics.
The paper examines the importance of international labour standards for ESG reporting. International labour standards exist today for almost all working conditions. There are many reasons why ESG criteria should be based on these standards. This is already happening to some extent. However, the references to international labor standards should be expanded and the existing references deepened.
We investigate the effect of the tone of news on investor stock price expectations and beliefs. In an experimental study we ask subjects to estimate a future stock price for twelve real listed companies. As additional information we provide them with historical stock prices and extracts from real newspaper articles. We propose a way to manipulate the tone of news extracts without distorting its content. Subjects in different treatment groups read news items that are written either in positive or negative tone for each stock. We find that subjects tend to predict a significantly higher (lower) return for stocks after reading positive (negative) tone news. The effect is especially pronounced for stocks with poor past performance. Subjects are more likely to be optimistic (pessimistic) about the economy and to buy (sell) stocks after reading positive (negative) than negative (positive) tone news. Our results show that the news media might affect not only how investors perceive information, but also what they do in response to it.
The 2011 European short sale ban on financial stocks: a cure or a curse? : [version 31 july 2013]
(2013)
Did the August 2011 European short sale bans on financial stocks accomplish their goals? In order to answer this question, we use stock options’ implied volatility skews to proxy for investors’ risk aversion. We find that on ban announcement day, risk aversion levels rose for all stocks but more so for the banned financial stocks. The banned stocks’ volatility skews remained elevated during the ban but dropped for the other unbanned stocks. We show that it is the imposition of the ban itself that led to the increase in risk aversion rather than other causes such as information flow, options trading volumes, or stock specific factors. Substitution effects were minimal, as banned stocks’ put trading volumes and put-call ratios declined during the ban. We argue that although the ban succeeded in curbing further selling pressure on financial stocks by redirecting trading activity towards index options, this result came at the cost of increased risk aversion and some degree of market failure.
The acquisition of Greek
(1995)
Studie zum Erwerb des Neugriechischen
Children […] growing up with highly inflected languages such as Modern Greek will frequently hear different grammatical forms of a given lexeme used in different grammatical and semantic-pragmatic contexts. In spite of the fact that the Greek noun is not as highly inflected as the verb, acquisition of nominal inflection of this inflecting-fusional language is quite complex, comprising the three categories of case, number, and gender. As is usual in this type of language, the formation of case-number forms obeys different patterns that apply to largely arbitrary classes of nominal lexemes partially based on gender. Further, frequency of the occurrence of the three gender classes and case-number forms of nouns greatly differs in spoken Greek, regarding both the types and tokens. […] [A] child learning an inflecting-fusional language like Greek must construct different inflectional patterns depending not only on parts of speech but also on subclasses within a given part of speech, such as gender classes of nouns and inflectional classes within or (exceptionally) across genders. It is therefore to be expected that the early development of case and number distinctions will apply to specific nouns and subclasses of nouns rather than the totality of Greek nouns. The two main theoretical approaches of morphological development that will be discussed in the present paper are the usage-based approach and the pre- and protomorphology approach.