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Management Summary: Conducted within the project “Economic Implications of New Models for Information Supply for Science and Research in Germany”, the Houghton Report for Germany provides a general cost and benefit analysis for scientific communication in Germany comparing different scenarios according to their specific costs and explicitly including the German National License Program (NLP).
Basing on the scholarly lifecycle process model outlined by Björk (2007), the study compared the following scenarios according to their accounted costs:
- Traditional subscription publishing,
- Open access publishing (Gold Open Access; refers primarily to journal publishing where access is free of charge to readers, while the authors or funding organisations pay for publication)
- Open Access self-archiving (authors deposit their work in online open access institutional or subject-based repositories, making it freely available to anyone with Internet access; further divided into (i) CGreen Open Access’ self-archiving operating in parallel with subscription publishing; and (ii) the ‘overlay services’ model in which self-archiving provides the foundation for overlay services (e.g. peer review, branding and quality control services))
- the NLP.
Within all scenarios, five core activity elements (Fund research and research communication; perform research and communicate the results; publish scientific and scholarly works; facilitate dissemination, retrieval and preservation; study publications and apply the knowledge) were modeled and priced with all their including activities.
Modelling the impacts of an increase in accessibility and efficiency resulting from more open access on returns to R&D over a 20 year period and then comparing costs and benefits, we find that the benefits of open access publishing models are likely to substantially outweigh the costs and, while smaller, the benefits of the German NLP also exceed the costs.
This analysis of the potential benefits of more open access to research findings suggests that different publishing models can make a material difference to the benefits realised, as well as the costs faced. It seems likely that more Open Access would have substantial net benefits in the longer term and, while net benefits may be lower during a transitional period, they are likely to be positive for both ‘author-pays’ Open Access publishing and the ‘over-lay journals’ alternatives (‘Gold Open Access’), and for parallel subscription publishing and self-archiving (‘Green Open Access’). The NLP returns substantial benefits and savings at a modest cost, returning one of the highest benefit/cost ratios available from unilateral national policies during a transitional period (second to that of ‘Green Open Access’ self-archiving). Whether ‘Green Open Access’ self-archiving in parallel with subscriptions is a sustainable model over the longer term is debateable, and what impact the NLP may have on the take up of Open Access alternatives is also an important consideration. So too is the potential for developments in Open Access or other scholarly publishing business models to significantly change the relative cost-benefit of the NLP over time.
The results are comparable to those of previous studies from the UK and Netherlands. Green Open Access in parallel with the traditional model yields the best benefits/cost ratio. Beside its benefits/cost ratio, the meaningfulness of the NLP is given by its enforceability. The true costs of toll access publishing (beside the buyback” of information) is the prohibition of access to research and knowledge for society.
In the aftermath of the global financial crisis and great recession, many countries face substantial deficits and growing debts. In the United States, federal government outlays as a ratio to GDP rose substantially from about 19.5 percent before the crisis to over 24 percent after the crisis. In this paper we consider a fiscal consolidation strategy that brings the budget to balance by gradually reducing this spending ratio over time to the level that prevailed prior to the crisis. A crucial issue is the impact of such a consolidation strategy on the economy. We use structural macroeconomic models to estimate this impact focussing primarily on a dynamic stochastic general equilibrium model with price and wage rigidities and adjustment costs. We separate out the impact of reductions in government purchases and transfers, and we allow for a reduction in both distortionary taxes and government debt relative to the baseline of no consolidation. According to the model simulations GDP rises in the short run upon announcement and implementation of this fiscal consolidation strategy and remains higher than the baseline in the long run. We explore the role of the mix of expenditure cuts and tax reductions as well as gradualism in achieving this policy outcome. Finally, we conduct sensitivity studies regarding the type of model used and its parameterization.
We examine both the degree and the structural stability of inflation persis tence at different quantiles of the conditional inflation distribution. Previous research focused exclusively on persistence at the conditional mean of the inflation rate. Economic theory, however, provides various reasons -for example downward wage rigidities or menu costs- to expect higher inflation persistence at the upper than at the lower tail of the conditional inflation distribution.
Based on post-war US data we indeed find slower mean reversion in response to positive than to negative shocks. We find robust evidence for a structural break in persistence at all quantiles of the inflation process in the early 1980s. Inflation persistence has decreased and become more homogeneous across quantiles. Persistence at the conditional mean became more informative about the degree of persistence across the entire conditional inflation distribution. While prior to the 1980s inflation was not mean reverting in response to large positive shocks, our evidence strongly suggests that since the end of the Volcker disinflation the unit root can be rejected at every quantile including the upper tail of the conditional inflation distribution.
This paper investigates the accuracy of point and density forecasts of four DSGE models for inflation, output growth and the federal funds rate. Model parameters are estimated and forecasts are derived successively from historical U.S. data vintages synchronized with the Fed’s Greenbook projections. Point forecasts of some models are of similar accuracy as the forecasts of nonstructural large dataset methods. Despite their common underlying New Keynesian modeling philosophy, forecasts of different DSGE models turn out to be quite distinct. Weighted forecasts are more precise than forecasts from individual models. The accuracy of a simple average of DSGE model forecasts is comparable to Greenbook projections for medium term horizons. Comparing density forecasts of DSGE models with the actual distribution of observations shows that the models overestimate uncertainty around point forecasts.
The complexity resulting from intertwined uncertainties regarding model misspecification and mismeasurement of the state of the economy defines the monetary policy landscape. Using the euro area as laboratory this paper explores the design of robust policy guides aiming to maintain stability in the economy while recognizing this complexity. We document substantial output gap mismeasurement and make use of a new model data base to capture the evolution of model specification. A simple interest rate rule is employed to interpret ECB policy since 1999. An evaluation of alternative policy rules across 11 models of the euro area confirms the fragility of policy analysis optimized for any specific model and shows the merits of model averaging in policy design. Interestingly, a simple difference rule with the same coefficients on inflation and output growth as the one used to interpret ECB policy is quite robust as long as it responds to current outcomes of these variables.
In the aftermath of the global financial crisis and great recession, many countries face substantial deficits and growing debts. In the United States, federal government outlays as a ratio to GDP rose substantially from about 19.5 percent before the crisis to over 24 percent after the crisis. In this paper we consider a fiscal consolidation strategy that brings the budget to balance by gradually reducing this spending ratio over time to the level that prevailed prior to the crisis. A crucial issue is the impact of such a consolidation strategy on the economy. We use structural macroeconomic models to estimate this impact focussing primarily on a dynamic stochastic general equilibrium model with price and wage rigidities and adjustment costs. We separate out the impact of reductions in government purchases and transfers, and we allow for a reduction in both distortionary taxes and government debt relative to the baseline of no consolidation. According to the model simulations GDP rises in the short run upon announcement and implementation of this fiscal consolidation strategy and remains higher than the baseline in the long run. We explore the role of the mix of expenditure cuts and tax reductions as well as gradualism in achieving this policy outcome. Finally, we conduct sensitivity studies regarding the type of model used and its parameterization.
The complexity resulting from intertwined uncertainties regarding model misspecification and mismeasurement of the state of the economy defines the monetary policy landscape. Using the euro area as laboratory this paper explores the design of robust policy guides aiming to maintain stability in the economy while recognizing this complexity. We document substantial output gap mismeasurement and make use of a new model data base to capture the evolution of model specification. A simple interest rate rule is employed to interpret ECB policy since 1999. An evaluation of alternative policy rules across 11 models of the euro area confirms the fragility of policy analysis optimized for any specific model and shows the merits of model averaging in policy design. Interestingly, a simple difference rule with the same coefficients on inflation and output growth as the one used to interpret ECB policy is quite robust as long as it responds to current outcomes of these variables.