Publications

We present a simple model with financial frictions where inflation increases the cost faced by firms holding liquid assets to hedge risky production against expenditure shocks. Inflation tilts firms’ technology choice away from innovative activities and toward safer but return-dominated ones, and therefore reduces long-run growth. Our theory makes specific predictions about how the severity of this adverse effect depends on industry characteristics. We test these industry-specific predictions in a generalized difference-in-differences framework with novel harmonized firm-level data from 139 developing countries and a long panel of U.S. firms, overcoming small sample problems constraining previous work. We find that inflation affects the composition but not the overall quantity of investment. Moreover, consistent with our theoretical mechanism, we find that innovating firms display a stronger dependence on liquid assets, which, in turn, are negatively related to inflation.

I find that self-selection into teacher training programs in Germany is co-determined with ideology. Incoming teacher-trainees are more left-wing in ideology and political preferences than the average incoming university student. I find also that teacher training programs exert a socialization effect: as compared to the average student, teacher trainees’ views are reinforced and they become more left-wing as they progress in their studies. In a third step, I use the German Socio-Economic Panel to compare tenured teachers’ political attitudes with other university graduates and other civil servants, and find that tenured teachers are more left-wing than the average in the respective reference groups. I consider possible explanations for the left-wing orientation of teachers in the German educational system and implications of indoctrination and imbalance of views.

People differ in whether they like to be in control of a decision or whether they would happily delegate a decision. We explore the heterogeneity and the underlying factors of the participants’ values of decision-making power in an allocation choice between a fair and an unfair option. This allocation decision affects the outcomes of the deciding person and three other people in different ways. We find that people differ in their preference for keeping this social decision, and more than 85% never pay for delegating the choice. The value for keeping the decision-making power is affected by the strength, but not the direction of social preferences, and relates to the preference for keeping a useless decision, i.e. selecting the winning number of a lottery. The value of decision-making power is reflected in response times and both eye- and mouse-tracking.

Starting with the fundamental relation that state prices are the product of physical probabilities and the stochastic discount factor, Ross (2015) shows that, given strong assumptions, knowing state prices suffices to back out physical probabilities and the stochastic discount factor at the same time. We find that such recovered physical distributions based on the S&P 500 index are incompatible with future returns and fail to predict future returns and realized variances. These negative results are even stronger when we add economically reasonable constraints. Simple benchmark methods based on a power utility agent or the historical return distribution cannot be rejected.

Sollten die Ausgaben der gesetzlichen Kranken- und der sozialen Pflegeversicherung langfristig stark steigen, werden sowohl die jüngere Generation durch höhere Beiträge als auch die Älteren durch mögliche Leistungseinschränkungen belastet. Auf Grundlage einer neueren nichtparametrischen Schätzung wird eine Simulation der zukünftigen Entwicklung der Beitragssätze in den beiden Zweigen der deutschen Sozialversicherung vorgestellt. Abhängig von verschiedenen Annahmen über das künftige Wachstum des BIP pro Arbeitnehmer ergibt sich dabei ein Gesamtsozialversicherungsbeitragssatz bis 2040 von nahe 50 %. Damit ist die Tragfähigkeit des deutschen Sozialversicherungssystems stark gefährdet.

Research in moral education demonstrates the pattern referred to as the happy victimizer (HV) does not only emerge among children and adolescents. Adults also transgress moral rules and, to a considerable extent, they might feel good doing so. However, research also reveals the HV pattern emergence is context specific. In contrast to findings among young children in whom the HV pattern was interpreted as a lack of motivation as a stage of development, it is an open question concerning what HV in adulthood means and how these patterns affect acting. This paper first offers an action-theoretical approach allowing reconstruction of the process of acting as well as a systematic discussion of results from two separate lines of research simultaneously: the research on patterns of moral decision-making as the HV and research on moral disengagement. Second, a survey study provides insights into what kinds of intentions, emotion attributions, and moral disengagement strategies adults display in situations of low moral intensity and whether they indicate consistent or contradictory patterns across situations. Results point to a situational specificity of moral decision-making as well as an application of moral disengagement strategies. Regarding education, it seems necessary to not only focus on struggling to strengthen the moral self or autonomous moral judging but also pay specific attention to acting in morally relevant situations depending on person-situation-interactions. Moral acting may also be fostered by developing supportive environments such as in schools, organisations or society.

This paper studies how sovereign risk – both fundamental and self-fulfilling – shapes the cyclical behavior of optimal fiscal policy. We develop a model with endogenous default costs where market sentiment can induce belief-driven debt rollover crises. Optimal taxes and public spending are generally procyclical, but the incidence of rollover risk gives rise to infrequent episodes of severely countercyclical fiscal activity. These endogenous regime changes are associated with pronounced countercyclical changes in the level of debt. Debt buildups are triggered already by relatively mild recessions, but successful fiscal consolidations occur only in exceptionally good times.

Objectives
To assess domain-specific effects of physical activity (PA) in the relationship with health care utilization and to investigate whether a measure that aggregates PA across domains (leisure, transport, work) is appropriate.

Methods
Data were retrieved from a longitudinal cohort study conducted in Southern Germany (women n = 1330, men n = 766). The number of physician visits was regressed on total PA and on PA differentiated by the domains leisure time, travel time and working time in a negative binomial model.

Results
For women, no association with physician visits is found for total PA, while high leisure time physical activity (LTPA) is associated with 22% more visits. The effect of high LTPA is statistically different from the effect of high total PA. For men, no significant associations are found for both measures.

Conclusions
The specific, positive effect of high LTPA on physician visits among women shows that using an aggregate measure of PA is inappropriate for analyzing the relation between PA and health care utilization. Further, the positive relationship should be considered in attempts to promote physical activity.

The gender stratification hypothesis maintains that higher levels of societal gender equity predict smaller gender gaps in mathematics achievement and attitudes. Using data from the Program for International Student Assessment (PISA) across 56 countries, this study aims to provide a thorough empirical test of the gender stratification hypothesis. We employ a novel two-stage empirical strategy to investigate the link between societal gender equities and gender differences in mathematics achievement and attitudes. In the first stage, we use a semiparametric Oaxaca-Blinder (OB) method to decompose the gender gaps in each country into a part that is explained by gender differences in observable characteristics and a part that remains unexplained. In the second stage, we examine the relationships between the unexplained parts of the gender gaps and country-specific gender equity measures. The results highlight the importance of gender equity in the labor market in explaining cross-country variation in the gender math gap. We find that lower gender wage gap is significantly associated with a smaller unexplained part of the gender math gap favoring boys. In terms of the gender gaps in math attitudes, the results yield mixed support for the gender stratification hypothesis.

There is ample evidence that people differ considerably in their preferences. We identify individual heterogeneity in type and strength of social preferences in a series of binary three-person dictator games. Based on this identification, we analyze response times in another series of games to investigate the cognitive processes of distributional preferences. We find that response time increases with the number of conflicts between individually relevant motives and decreases with the utility difference between choice options. The selfish motive is more intuitive for subjects who are more selfish. Our findings indicate that the sequential sampling process and the intuition of selfishness jointly produce distribution decisions, and provide an explanation for the mixed results on the correlations between response time and prosociality. Our results also show that it is important to take heterogeneity of preferences into account when investigating the cognitive processes of social decision making.

Political coordination and policy outcomes may be the result not only of the position of the ‘median voter’ in a political scale but also of the heterogeneity of preferences around the median. Depending on the level of government and the type of policy, such heterogeneity may lead to lower public spending and redistribution. We assess this issue empirically by analyzing the relationship between the distribution of preferences for redistribution and the amount of public expenditure at different levels of government and for several types of spending in 23 European countries. Our results suggest a negative and significant correlation between heterogeneity of preferences for redistribution and public spending that is stronger at the local level and for redistributive functions, independent of the median individual's preferences.

Über die Qualifikationen von Lehrenden in der beruflich-betrieblichen Weiterbildung in Deutschland ist bisher wenig bekannt, da sie in den meisten Erhebungen zum Weiterbildungspersonal unterrepräsentiert und/oder als Teilgruppe nicht explizit ausgewiesen sind. Der vorliegende Beitrag untersucht daher deskriptiv die Qualifikationen von N = 896 Lehrenden in der beruflich-betrieblichen Weiterbildung und vergleicht die Befunde mit den Ergebnissen anderer Studien. Die Lehrenden gaben ähnlich häufig an, einen Hochschulabschluss zu besitzen (70,9 %), allerdings wurden pädagogische Hochschulabschlüsse seltener genannt (16,5 %). Trainerausbildungen und/oder andere Zusatzqualifikationen wurden dagegen häufiger angegeben (86,4 %). Insgesamt scheinen Lehrende in der beruflich-betrieblichen Weiterbildung ein hohes Qualifikationsniveau zu besitzen, wobei es sich jedoch selten um ausgebildete Pädagog/innen handelt. Im Hinblick auf die Professionalisierung im Weiterbildungsbereich erscheint es lohnend, diese Teilgruppe des Weiterbildungspersonals als solche zukünftig genauer zu untersuchen.

This paper takes a closer look at the consequences of using a market index as a proxy for the latent market return in the capital asset pricing model. In particular, the consequences of two major sources of misspecification are analyzed: (i) the use of inaccurate weights and (ii) the use of only a subset of the asset universe to construct the index. The consequences resulting from the use of a badly chosen market proxy reach from inconsistent parameter estimates to misinterpretation of test outcomes indicating the existence of abnormal returns.

A minimum distance approach of estimating the CAPM under measurement error is presented, which identifies the CAPM parameters by exploiting the crossequation cross-sectional restrictions resulting from a common measurement error. The new approach allows for quantifying the impact of measurement error and for testing the presence of spurious abnormal returns. Practical guidelines are presented to mitigate potential biases in the estimated CAPM parameters.

Purpose:
The expectations surrounding innovation as the principal mean by which firms gain a sustainable advantage while simultaneously alleviating social problems are tremendous. However, in the process of developing innovation, many small entrepreneurs, SMEs, as well as large firms struggle to access the necessary finances in order to further develop their innovative projects. The purpose of this paper is to underline some of the most recent tools and practices used to finance novelty.

Design/methodology/approach:
This paper synthetizes some thoughts about the financing of novelty and proposes a research agenda based on trends highlighted in the recent literature.

Findings:
This paper pinpoints recent advances in finance applied to the field of innovation. In particular, this paper highlights both promising developments as well as the need for more research in this area in order to untangle the links between creativity and financial support, the financing of innovation in developing countries, accounting and evaluation of ideas.

Social implications:
The importance of developing innovation and easing access to resources has societal implications. The development of education around finance and entrepreneurship, as well as improving literacy of citizens in these fields could yield a more open view on innovation and financial supports in the future.

Originality/value:
Financing novelty, evaluating projects and facing uncertainty are among the most difficult decisions investors take. This paper combines many dimensions of innovation and finance to construct an overview of current and future practices within both domains.

Sovereign debt crises are often accompanied by deep recessions with sharp declines in external credit to the private sector. In a sample of emerging economies we find that both, sovereign and private interest rate spreads are countercyclical. This paper presents a model of a small open economy that accounts for these empirical regularities. It includes private firms, which finance a fraction of imports by external debt and are subject to idiosyncratic productivity risk, and a government, which borrows internationally and taxes firms to finance public expenditures. The model gives rise to endogenous private and sovereign interest rate spreads and a dynamic feedback mechanism between sovereign and private default risks through the endogenous response of fiscal policy to adverse productivity shocks.