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In this paper we investigate the comparative properties of empirically-estimated monetary models of the U.S. economy. We make use of a new data base of models designed for such investigations. We focus on three representative models: the Christiano, Eichenbaum, Evans (2005) model, the Smets and Wouters (2007) model, and the Taylor (1993a) model. Although the three models differ in terms of structure, estimation method, sample period, and data vintage, we find surprisingly similar economic impacts of unanticipated changes in the federal funds rate. However, the optimal monetary policy responses to other sources of economic fluctuations are widely different in the different models. We show that simple optimal policy rules that respond to the growth rate of output and smooth the interest rate are not robust. In contrast, policy rules with no interest rate smoothing and no response to the growth rate, as distinct from the level, of output are more robust. Robustness can be improved further by optimizing rules with respect to the average loss across the three models.
The paper constructs a global monetary aggregate, namely the sum of the key monetary aggregates of the G5 economies (US, Euro area, Japan, UK, and Canada), and analyses its indicator properties for global output and inflation. Using a structural VAR approach we find that after a monetary policy shock output declines temporarily, with the downward effect reaching a peak within the second year, and the global monetary aggregate drops significantly. In addition, the price level rises permanently in response to a positive shock to the global liquidity aggregate. The similarity of our results with those found in country studies might supports the use of a global monetary aggregate as a summary measure of worldwide monetary trends. JEL Classification: E52, F01
A second Yalta
(2014)
Although many observers consider the Bush administration’s “faith-based initiative” a unique breach in the wall of separation between church and state, close ties between the federal government and religious agencies are no novelty in the history of American public policy. Since the end of the Second World War, billions of dollars of public funds have been made available to religiously-affiliated hospitals, nursing homes, educational institutions, and social services - institutions which were regarded as vital to Cold War preparedness. By the same token, government use of religious foreign aid agencies, the donation of surplus land and military facilities to religious charities, and the funding of the chaplaincy in the armed forces have undergirded Cold War foreign policy goals. Based on the principle of subsidiarity, post-war public policy thus integrated religious groups into the framework of the welfare and national security state in ways which underwrote both the expansion of the federal government and the growth of religious agencies. Crucially, public funding relations involved not only mainline Protestant, Jewish and Catholic organizations, but also white evangelicals, who had traditionally been the most outspoken opponents of closer ties between church and state. Cold War Anti-Communism, the fear of Catholic or secularist control of public funds, and pragmatic considerations, however, ushered in the gradual revision of their separatist views. Ironically, the programs of Lyndon Johnson’s Great Society, so vilified by the Christian Right, pioneered many of the funding streams most beneficial to evangelical providers. Considering that since 1945 the sprawling and loosely organized evangelical movement has become the largest single religious faction in the US, and that conservative Protestants now form the most strongly Republican group in the religious spectrum, these findings are of particular importance. They suggest that Cold War state-building and the resurgence of Evangelicalism mutually reinforced each other in ways which have been largely ignored by scholarship on conservatism and its focus on the “backlash” against the political and cultural upheaval of the 1960s. Based on newly accessible archival materials and a comprehensive review of secondary literature, this paper suggests that the institutional and ideological ties between evangelicals and the state, which developed in the aftermath of the Second World War, are as important in understanding the political mobilization of conservative Protestants as the more recent “culture war” sentiments.
With the current conflict in Gaza going full tilt, the usual questions have popped up: Who is to blame, what is everyone’s motivation and strategy, how to stop the bloodshed, how to end the conflict. And as usual, the two-state solution, i.e. two separate, sovereign states within the borders of the 1949 armistice agreement, keeps popping up as a purported solution. This is especially prominent in the statements of politicians in countries not directly involved in the conflict. Countries that at least claim to want to help end the conflict, be it through mediation or other diplomatic measures. But for those countries, the two-state solution has become an idea to hide behind. It does not help solve the conflict, neither in the short- nor mid-term. Clinging to the idea merely prolongs the status quo. However, it does allow the rest of the world to avoid facing the facts, which would force them to reevaluate their position on who to support and actually do something about the conflict as it currently is. But it’s high time we face the music and admit it: The two-state solution is no longer a viable option when it comes to mediating this conflict...
taxia tibialis Schaeffer, 1908 (Coleoptera: Cerambycidae: Lamiinae: Pteropliini) is transferred to Bisaltes (Bisaltes) Thomson, 1868 (Apomecynini), new combination; the female is described for the first time. This extends the range of the genus, previously only known as far north as Costa Rica, to southern Texas. Bisaltes (Bisaltes) obliquatus Breuning, 1940 is found to be conspecific with Bisaltes (Bisaltes) uniformis Breuning, 1939, new synonymy, and recorded from Argentina and the Brazilian state of São Paulo. The holotypes of Esthlogena pulverea Bates, 1866, and Bisaltes posticalis Thomson, 1868 (currently, both synonyms of Bisaltes (Bisaltes) pulvereus) are illustrated for the first time. The holotype of Bisaltes (Bisaltes) bimaculatus Aurivillius, 1904, as well as ventral and lateral habitus of this species are illustrated for the first time and it is newly recorded from the Brazilian state of Santa Catarina.
Isolates of Mesanophrys cf. carcini Small & Lynn in Aescht, 2001 and Parauronema cf. longum Song, 1995 infected a freshwater mussel (bleufer, Potamilus purpuratus (Lamarck, 1819)) collected from Chewacla Creek, Auburn, Alabama, USA. Free-living specimens of Metanophrys similis (Song, Shang, Chen & Ma, 2002) 2002, Uronema marinum Dujardin, 1841, Uronemita filificum Kahl, 1931, Pleuronema setigerum Calkins, 1902 and Pseudocohnilembus hargisi Evans & Thompson, 1964, were collected from estuarine waters near Orange beach, Alabama. Based on observations of living and silver-impregnated cells, we provide redescriptions as well as comparisons with original descriptions for the seven species. We also comment on the geographic distributions of known populations of these aquatic ciliate species and provide a table reporting some aquatic scuticociliates of the eastern US Gulf Coast.
We develop an estimated model of the U.S. economy in which agents form expectations by continually updating their beliefs regarding the behavior of the economy and monetary policy. We explore the effects of policymakers' misperceptions of the natural rate of unemployment during the late 1960s and 1970s on the formation of expectations and macroeconomic outcomes. We find that the combination of monetary policy directed at tight stabilization of unemployment near its perceived natural rate and large real-time errors in estimates of the natural rate uprooted heretofore quiescent in inflation expectations and destabilized the economy. Had monetary policy reacted less aggressively to perceived unemployment gaps, in inflation expectations would have remained anchored and the stag inflation of the 1970s would have been avoided. Indeed, we find that less activist policies would have been more effective at stabilizing both in inflation and unemployment. We argue that policymakers, learning from the experience of the 1970s, eschewed activist policies in favor of policies that concentrated on the achievement of price stability, contributing to the subsequent improvements in macroeconomic performance of the U.S. economy.
A number of recent studies have suggested that activist stabilization policy rules responding to inflation and the output gap can attain simultaneously a low and stable rate of inflation as well as a high degree of economic stability. The foremost example of such a strategy is the policy rule proposed by Taylor (1993). In this paper, I demonstrate that the policy settings that would have been suggested by this rule during the 1970s, based on real-time data published by the U.S. Commerce Department, do not greatly differ from actual policy during this period. To the extent macroeconomic outcomes during this period are considered unfavorable, this raises questions regarding the usefulness of this strategy for monetary policy. To the extent the Taylor rule is believed to provide a reasonable guide to monetary policy, this finding raises questions regarding earlier critiques of monetary policy during the 1970s.
This paper is intended to show how Latinos in general and Mexican Americans, Cuban Americans, and Puerto Ricans in particular, engage politically in the United States. Latinos execute their influence by voting or in non-electoral activities like campaign work or financial contributions. As an individual, one participates as a member of society and possibly as a member of an interest group, i.e. a party. Thus, to be successful, it is necessary to combine one’s personal interest with that of others in order to form an alliance that, due to its size, may have an impact on the political stage. This study will show which factors are necessary and which steps were taken to gain and enhance Latino political influence. In doing so, it will become clear that Mexican Americans, Cuban Americans, and Puerto Ricans all started their struggle from diverse backgrounds and possess significantly different goals. Although common language unites these three national-origin groups, they do not have the same political and economic resources at their disposal. Decisive differences in immigration politics, naturalization, and economic opportunities become visible and will prove a distinct heterogeneity of Latinos concerning political behavior and goals. Political activities of Mexican Americans, Cuban Americans, and Puerto Ricans will be outlined as well as how they differ from each other. In doing so, it is necessary to take notice of their specific histories and legal experiences upon arrival in the United States. Furthermore, different demographic factors of the three national-origin groups additionally affect political participation. An understanding of Latino political participation should be in the interest of the U.S. public as well as scholars engaging in American Studies. This biggest minority increasingly makes its presence felt in the electoral arena, especially at the state level. In states such as California, Texas, Florida and New Mexico Latinos constitute decisive voting blocs. But also, Latinos nationwide enlarge their political clout, due to cumulative numbers and a more developed political consciousness. With this national and state level significance of the Latino electorate, examining their policy preferences and goals has become progressively more important to the understanding of the U.S. political scene. The approach here is twofold. First, political participation of the Latino population as a whole will be researched; using numbers and results from the presidential election 2004. In this part of the paper, the concept of pan-ethnicity using the label Latino will be used to sum up Spanish-speaking nationalities and their political efforts. In order to be eligible to vote, certain legal requirements are to be met, so factors that account for voting will be outlined first. In accordance with the large share of non-citizens among the Latino population, it is also necessary to examine their non-electoral political activities. The second part will portray Latinos in more detail, examining the three largest national-origin groups. By demonstrating their specific histories and varied experiences and opportunities in U.S. politics, it will become clear that when talking about Latino Politics, it is indispensable to bear in mind the heterogeneity of America’s biggest minority and the side effects this has.
While companies have emerged as very proactive donors in the wake of recent major disasters like Hurricane Katrina, it remains unclear whether that corporate generosity generates benefits to firms themselves. The literature on strategic philanthropy suggests that such philanthropic behavior may be valuable because it can generate direct and indirect benefits to the firm, yet it is not known whether investors interpret donations in this way. We develop hypotheses linking the strategic character of donations to positive abnormal returns. Using event study methodology, we investigate stock market reactions to corporate donation announcements by 108 US firms made in response to Hurricane Katrina. We then use regression analysis to examine if our hypothesized predictors are associated with positive abnormal returns. Our results show that overall, corporate donations were linked to neither positive nor negative abnormal returns. We do, however, see that a number of factors moderate the relationship between donation announcements and abnormal stock returns. Implications for theory and practice are discussed.
How is it possible to write about "American" habitus in general, when the United States is socially, geographically, ethically and politically so diverse? "The USA", it has been observed, "is not a country, it is a continent". The social forces and social processes shaping the habitus of Americans are multifarious. There has not, for example, ever been a single elite in the USA as a whole that has succeeded in monopolising the social "model-setting" function to the extent that was common in the history of many Western European countries. For the development of American habitus, Stephen Mennell advances a central proposition: His thesis is that the central historic experience shaping the social habitus of Americans is that of their country constantly becoming more powerful relative to its neighbours. This has had long-term and all-pervasive effects on the way Americans see themselves, on how they perceive the rest of the world, and how others see them.
During the last decades households in the U.S. have experienced that residential house prices move in a persistent manner, i.e. that returns are positively serially correlated. Since an owner-occupied home is usually the largest investment of a household it is important to understand how households act when they base their consumption and investment decisions on this experience. We show in a setting with housing market cycles and households who can decide whether they rent or own the home, that - besides the consumption and the precautionary savings motive - serial correlation in house prices generates a new speculative motive for homeownership. In particular, we show how good and bad housing market cycles affect homeownership rates, leverage, stock investments and consumption and can explain empirically observed household behavior during housing market boom and bust periods. Keywords: Asset Allocation , Portfolio Choice , Housing Market Cycles , Real Estate JEL Classification: G11, D91
We analyze a national sample of Americans with respect to their debt literacy, financial experiences, and their judgments about the extent of their indebtedness. Debt literacy is measured by questions testing knowledge of fundamental concepts related to debt and by selfassessed financial knowledge. Financial experiences are the participants’ reported experiences with traditional borrowing, alternative borrowing, and investing activities. Overindebtedness is a self-reported measure. Overall, we find that debt literacy is low: only about one-third of the population seems to comprehend interest compounding or the workings of credit cards. Even after controlling for demographics, we find a strong relationship between debt literacy and both financial experiences and debt loads. Specifically, individuals with lower levels of debt literacy tend to transact in high-cost manners, incurring higher fees and using high-cost borrowing. In applying our results to credit cards, we estimate that as much as one-third of the charges and fees paid by less knowledgeable individuals can be attributed to ignorance. The less knowledgeable also report that their debt loads are excessive or that they are unable to judge their debt position. JEL Classification: D14, D91
Many older US households have done little or no planning for retirement, and there is a substantial population that seems to undersave for retirement. Of particular concern is the relative position of older women, who are more vulnerable to old-age poverty due to their longer longevity. This paper uses data from a special module we devised on planning and financial literacy in the 2004 Health and Retirement Study. It shows that women display much lower levels of financial literacy than the older population as a whole. In addition, women who are less financially literate are also less likely to plan for retirement and be successful planners. These findings have important implications for policy and for programs aimed at fostering financial security at older ages.
Increasingly, individuals are in charge of their own financial security and are confronted with ever more complex financial instruments. However, there is evidence that many individuals are not well-equipped to make sound saving decisions. This paper demonstrates widespread financial illiteracy among the U.S. population, particularly among specific demographic groups. Those with low education, women, African-Americans, and Hispanics display particularly low levels of literacy. Financial literacy impacts financial decision-making. Failure to plan for retirement, lack of participation in the stock market, and poor borrowing behavior can all be linked to ignorance of basic financial concepts. While financial education programs can result in improved saving behavior and financial decision-making, much can be done to improve these programs’ effectiveness.
During the Black Revolution, LeRoi Jones used a radical adaptation of Dante to express a new militant identity, turning himself into a new man with a new name, Amiri Baraka, whose experimental literary project culminated in "The System of Dante's Hell" in 1965. Dante’s poem (specifically, John Sinclair's translation) provides a grid for the narrative of Baraka's autobiographical novel; at the same time, the Italian poet's description of hell functions for Baraka as a gloss on many of his own experiences. Whereas for Ralph Ellison and Richard Wright, Dante marks a way into the world of European culture, Baraka uses Dante first to measure the growing distance between himself and European literature and then, paradoxically, to separate himself totally from it. Baraka's response to the poet at once confirms and belies Edward Said's claim that Dante's "Divine Comedy" is essentially an imperial text that is foundational to the imperial discipline of comparative literature. That Baraka can found his struggle against imperialist culture, as he sees it, on none other than this specific poem suggests the extent to which it is a richer and more complex text than even Said imagined. To see exactly how Baraka does this, Dennis Looney proposes to read several extended passages from "The System of Dante's Hell" to take stock of its allusiveness to the Italian model. For all the critical attention to Baraka, surprisingly no one has undertaken the necessary work of sorting out his allusions to Dante in any systematic way.
We show that average excess returns during the last two years of the presidential cycle are significantly higher than during the first two years: 9.8 percent over the period 1948 – 2008. This pattern in returns cannot be explained by business-cycle variables capturing time-varying risk premia, differences in risk levels, or by consumer and investor sentiment. In this paper, we formally test the presidential election cycle (PEC) hypothesis as the alternative explanation found in the literature for explaining the presidential cycle anomaly. PEC states that incumbent parties and presidents have an incentive to manipulate the economy (via budget expansions and taxes) to remain in power. We formulate eight empirically testable propositions relating to the fiscal, monetary, tax, unexpected inflation and political implications of the PEC hypothesis. We do not find statistically significant evidence confirming the PEC hypothesis as a plausible explanation for the presidential cycle effect. The existence of the presidential cycle effect in U.S. financial markets thus remains a puzzle that cannot be easily explained by politicians employing their economic influence to remain in power. JEL Classification: E32; G14; P16 Keywords: Political Economy, Market Efficiency, Anomalies, Calendar Effects
We evaluate the asset pricing implications of a class of models in which risk sharing is imperfect because of the limited enforcement of intertemporal contracts. Lustig (2004) has shown that in such a model the asset pricing kernel can be written as a simple function of the aggregate consumption growth rate and the growth rate of consumption of the set of households that do not face binding enforcement constraints in that state of the world. These unconstrained households have lower consumption growth rates than constrained households, i.e. they are located in the lower tail of the crosssectional consumption growth distribution. We use household consumption data from the U.S. Consumer Expenditure Survey to estimate the pricing kernel implied by the model and to evaluate its performance in pricing aggregate risk. We employ the same data to construct aggregate consumption and to derive the standard complete markets pricing kernel. We find that the limited enforcement pricing kernel generates a market price of risk that is substantially larger than the standard complete markets asset pricing kernel. Klassifizierung: G12, D53, D52, E44
This paper employs a multi-country large scale Overlapping Generations model with uninsurable labor productivity and mortality risk to quantify the impact of the demographic transition towards an older population in industrialized countries on world-wide rates of return, international capital flows and the distribution of wealth and welfare in the OECD. We find that for the U.S. as an open economy, rates of return are predicted to decline by 86 basis points between 2005 and 2080 and wages increase by about 4.1%. If the U.S. were a closed economy, rates of return would decline and wages increase by less. This is due to the fact that other regions in the OECD will age even more rapidly; therefore the U.S. is “importing” the more severe demographic transition from the rest of the OECD in the form of larger factor price changes. In terms of welfare, our model suggests that young agents with little assets and currently low labor productivity gain, up to 1% in consumption, from higher wages associated with population aging. Older, asset-rich households tend to lose, because of the predicted decline in real returns to capital. Klassifizierung: E17, E25, D33, C68