For many kinds of capital, depreciation rates change systematically with the age of the capital. Consider an example that captures essential aspects of human capital, both regarding its accumulation and its depreciation: a worker obtains knowledge in period 0, then uses this knowledge innproduction in periods 1 and 2, and thereafter retires. Here, depreciation accelerates: it occurs at a 100% rate after period 2, and at a lowe (perhaps zero) rate before that. The present paper analyzesnthe implications of non-constant depreciation rates for the optimal timing of taxes on capital income. The main finding is that under natural assumptions, the path of tax rates over time must be oscillatory. Oscillatory tax rates are optimal when depreciation rates accelerate with the age of the capital (as in the above example), and provided that the government can commit to the path ofnfuture tax rates but cannot apply different tax rates in a given year to different vintages of capital.
The idea that there is a uniformly “optimal” governance structure for corporationsnfeatures prominently in current debates and policy proposals. In this paper, we propose andifferent, constitutional theory of corporate governance: the criterion for a good corporatengovernance structure is whether it is freely chosen by the shareholders. We illustrate ournapproach by comparing the constitutional rights of shareholders under US corporate law and Swiss corporate law. Moreover, we discuss the mandatory provisions that shareholders would likely include in corporate law at a constitutional stage, behind the veil of ignorance.
“Evaluitis” - i.e. ex post assessments of organizations and persons - has become a rapidly spreading disease. In addition to the well-known costs imposed on evaluees and evaluators, additional significant costs are commonly disregarded: incentives are distorted, ossification is induced and the decision approach is wrongly conceived. As a result, evaluations are used too often and too intensively. A viable and oftennsuperior alternative to evaluations is a careful selection of persons and afterwards leaving them to pursue their assigned tasks.
"Economists long considered money illusion to be largelynirrelevant. Here we show, however, that money illusion has powerfulneffects on equilibrium selection. If we represent payoffs in nominal terms,nchoices converge to the Pareto inefficient equilibrium; however, if we liftnthe veil of money by representing payoffs in real terms, the Pareto efficientnequilibrium is selected. We also show that strategic uncertainty about thenother players’ behavior is key for the equilibrium selection effects ofnmoney illusion: even though money illusi on vanishes over time if subjectsnare given learning opportunities in the context of an individual optimizationnproblem, powerful and persistent effects of money illusion are found whennstrategic uncertainty prevails."
Die nachhaltige Lösung von Problemen der Energieversorgung gehört zu den zentralen Herausforderungen moderner Zivilisationen. Aus ökonomischer Sicht greifen alle Antworten zu kurz, die nicht explizit das interessengeleitete Handeln der wesentlichen Akteure berücksichtigen. Deshalb behandelt dieses Buch die nachfrage- und angebotsseitigen Gesetzmäßigkeiten der verschiedenen Energiemärkte, und zwar unter Rückgriff auf industrie- und institutionenökonomische Theoriebausteine. Die technisch-naturwissenschaftlichen Bedingungen von Gewinnung, Wandlung, Transport, Verteilung und Nutzung von Energieträgern werden dabei stets berücksichtigt. Ein wichtiges Thema für die Praktiker sind die von der Liberalisierung der leitungsgebundenen Energiemärkte ausgehenden Impulse. Wo immer möglich werden die heoretisch hergeleiteten Voraussagen durch die Konfrontation mit statistischer Evidenz auf ihre Praxisrelevanz geprüft.
This paper applies the five standard economic performance criteria to gauge the contribu-tion of Managed Care (MC) to the performance of three healthcare systems, viz. Germany, the Netherlands, and Switzerland. The criteria are (1) matching of consumer preferences, (2) technical efficiency, (3) adaptive capacity, (4) dynamic efficiency, and (5) a rent-free distribution of income that provides incentives for producers to attain criteria (1) through (4). Being insurance-based, the German, Dutch, and Swiss healthcare systems comprise three contractual relationships that can be judged in the light of these criteria. The maximum contribution of MC to the performance of the healthcare system is found for the Netherlands followed by Switzerland. The Independent Practice Associations rep-resenting MC in the Netherlands, and the Health Maintenance Organizations representing MC in Switzerland score 15 respectively 6 out of 30 points. By way of contrast, the con-tribution of the Disease Management Programs to the performance of the German health-care system remains limited (3 out of 30 points).
This article calls attention to a difficulty with insurers' investment policies that seems to have been overlooked so far. There is the distinct possibility that insurers cannot satisfy the demands of different stakeholders in terms of expected returns and volatility. While using the capital asset pricing model as the benchmark, this article distinguishes two groups of stakeholders that impose additional constraints. One is “income security” in the interest of current beneficiaries and older workers; the other is “predictability of contributions” in the interest of contributing younger workers and sponsoring employers. It defines the conditions for which the combination of these constraints results in a lack of feasibility of investment policy. Minimum deviation from the capital market line is proposed as the performance benchmark in these situations.
In response to population aging, pay-as-you-go pensions are being reduced in almost all developed countries. In many countries, governments aim to fill the resulting gap with subsidized private pensions. This paper exploits the recent German pension reform to shed new light on the uptake of voluntary, but heavily subsidized private pension schemes. Specifically, we investigate how the uptake of the recently
introduced “Riester pensions” depends on state-provided saving incentives, and how well the targeting to families and low-income households works in practice.
We show that, after a slow start, private pension plans took off very quickly. While saving incentives were effective in reaching parents, they were less successful in attracting low-income earners, although Riester pensions exhibit a more equal pattern by income than occupational pensions and unsubsidized private pension plans.
We also provide circumstantial evidence on displacement effects between saving for old-age provision and other purposes. Households who plan to purchase housing are less likely to have a Riester pension. The same holds for households who attach high importance to a bequest motive. Occupational pensions and other forms of private pensions, however, act as complements rather than as substitutes.
Important empirical information on household behavior and household finances, used heavily by researchers, central banks, and for policy consulting, is obtained from surveys. However, various interdependent factors that can only be controlled to a limited extent lead to unit and item nonresponse, and missing data on certain items is a frequent source of difficulties in statistical practice. All the more, it is important to explore techniques for the imputation of large survey data. This paper presents the theoretical underpinnings of a Markov Chain Monte Carlo multiple imputation procedure and outlines important technical aspects of the application of MCMC-type algorithms to large socio-economic datasets. In an exemplary application it is found that MCMC algorithms
have good convergence properties even on large datasets with complex patterns of missingness, and that the use of a rich set of covariates in the imputation models has a
substantial effect on the distributions of key financial variables.
