Publikationen

We show that discretionary policymaking can lead to multiple rational-expectations equilibria where the central bank responds to inflation sentiments, which are driven by past endogenous variables but are unrelated to current economic fundamentals. Some of these equilibria have favourable consequences for welfare, resulting in outcomes superior even to those achieved under timeless-perspective commitment. Inflation sentiments also provide a novel explanation for the sizeable macroeconomic fluctuations in many countries in the 1970s. Compared to interest-rate rules violating the Taylor principle, our explanation has the advantage of providing a rationale for why central banks that are confronted with inefficiently large macroeconomic fluctuations may not be able to deviate to new policies with superior macroeconomic outcomes. Moreover, we show that our approach provides an alternative explanation for the high degree of inflation persistence found in the data.

We study the microlevel evolution of residential house prices using data on repeat sales on Manhattan Island from 2004 to 2015. We document that price comovement, even within a ZIP code, is a highly local and persistent phenomenon. The strength of such comovements vanishes with both spatial and temporal distance. Local underperformance is more persistent than local overperformance, particularly when house prices on aggregate level increase.

Constantinides and Perrakis (2002, 2007) derive a lower bound on the price of an option such that an investor increases her utility by buying the option at the ask price if the ask price is lower than the lower bound; and by writing the option at the bid price if the bid price is higher than upper bound. Contrary to the evidence in Constantinides, Jackwerth, and Perrakis (2009) and Constantinides, Czerwonko, Jackwerth and Perrakis (2011) who demonstrate several violations of mainly the upper bound on call prices and document a tradable anomaly by exploiting this mispricing, Wallmeier (2015) claims that practically all options on the S&P 500, Eurostoxx 50, and DAX indices lie within the bounds. The main reason for the discrepancy is that Wallmeier erroneously inflates the volatility input to the bounds by about 2% by using the at-the-money implied volatility which is approximately the risk-neutral volatility instead of the physical volatility, as required by the model.

What is an effective vaccination policy to end the COVID-19 pandemic? We address this question in a model of the dynamics of policy effectiveness drawing upon the results of a large panel survey implemented in Germany during the first and second waves of the pandemic. We observe increased opposition to vaccinations were they to be legally required. In contrast, for voluntary vaccinations, there was higher and undiminished support. We find that public distrust undermines vaccine acceptance, and is associated with a belief that the vaccine is ineffective and, if enforced, compromises individual freedom. We model how the willingness to be vaccinated may vary over time in response to the fraction of the population already vaccinated and whether vaccination has occurred voluntarily or not. A negative effect of enforcement on vaccine acceptance (of the magnitude observed in our panel or even considerably smaller) could result in a large increase in the numbers that would have to be vaccinated unwillingly in order to reach a herd-immunity target. Costly errors may be avoided if policy makers understand that citizens' preferences are not fixed but will be affected both by the crowding-out effect of enforcement and by conformism. Our findings have broad policy applicability beyond COVID-19 to cases in which voluntary citizen compliance is essential because state capacities are limited and because effectiveness may depend on the ways that the policies themselves alter citizens' beliefs and preferences.

Since 2015, an enormous number of refugees have migrated to Germany. To obtain qualifi ed jobs, many of them attend prevocational preparation classes. The aims of these classes are mainly the acquisition of German language skills and preparation for subsequent vocational education and training. This paper examines (1) the transitions of young refugees after prevocational preparation classes and (2) what factors predict the transition to the next educational step. Using data from the fi rst two measurement points of a longitudinal survey (t1 during the prevocational preparation class and t2 one year later), we surveyed 333 students in Southwest Germany (82% male; mean age = 18.9 years). Instruments included an online questionnaire, an online test of cognitive ability, and an online test of German language skills. Approximately 37 percent of the students repeated the prevocational preparation class, whereas 60 percent moved on to the next educational step. German language skills at t1 and contact with people helping refugees (t1) predicted the probability of the transition to a “regular” educational pathway. Other variables, such as the educational background of the young refugees and of their parents, personality, motivation, and aspirations, had no significant effects. The findings can be interpreted in terms of the primary (language skills) and secondary eff ects of refugees’ ethnic background (information about the education system through contact with locals).

Quantifying the timing and content of policy changes affecting international travel and immigration is key to ongoing research on the spread of SARS-CoV-2 and the socioeconomic impacts of border closures. The COVID Border Accountability Project (COBAP) provides a hand-coded dataset of >1000 policies systematized to reflect a complete timeline of country-level restrictions on movement across international borders during 2020. Trained research assistants used pre-set definitions to source, categorize and verify for each new border policy: start and end dates, whether the closure is "complete" or "partial", which exceptions are made, which countries are banned, and which air/land/sea borders were closed. COBAP verified the database through internal and external audits from public health experts. For purposes of further verification and future data mining efforts of pandemic research, the full text of each policy was archived. The structure of the COBAP dataset is designed for use by social and biomedical scientists. For broad accessibility to policymakers and the public, our website depicts the data in an interactive, user-friendly, time-based map.

Effective states govern by some combination of enforcement and voluntary compliance. To contain the COVID-19 pandemic, a critical decision is the extent to which policy makers rely on voluntary as opposed to enforced compliance, and nations vary along this dimension. While enforcement may secure higher compliance, there is experimental and other evidence that it may also crowd out voluntary motivation. How does enforcement affect citizens' support for anti-COVID-19 policies? A survey conducted with 4,799 respondents toward the end of the first lockdown in Germany suggests that a substantial share of the population will support measures more under voluntary than under enforced implementation. Negative responses to enforcement-termed control aversion-vary across the nature of the policy intervention (e.g., they are rare for masks and frequent for vaccination and a cell-phone tracing app). Control aversion is less common among those with greater trust in the government and the information it provides, and among those who were brought up under the coercive regime of East Germany. Taking account of the likely effectiveness of enforcement and the extent to which near-universal compliance is crucial, the differing degrees of opposition to enforcement across policies suggest that for some anti-COVID-19 policies an enforced mandate would be unwise, while for others it would be essential. Similar reasoning may also be relevant for policies to address future pandemics and other societal challenges like climate change.

This paper develops a stochastic dynamic politico-economic model of sovereign debt to analyze the impact of bailouts on political turnover and sovereign default risk. We consider a small open economy in which the government has access to official loans conditional on the implementation of austerity policies. There is a two-party system in which both parties care about the population’s welfare but differ in an exogenous utility cost of default. Political turnover is the endogenous outcome of the individual voting behavior. In a quantitative application to the Greek economy, we find that bailouts amplify political turnover risk, which, in turn, elevates sovereign interest spreads. While stricter conditionality fosters the probability of political turnover and sovereign default in the short run, it may mitigate political turnover and default risk in the long run. The frequency of political turnover is U-shaped in the strength of conditionality.