Published by De Gruyter Oldenbourg

Volume 62 Issue 1

Issue of Review of Economics

Contents
Journal Overview

April 19, 2016

News Shocks and Optimal Simple Rules

Roland C. Winkler, Hans-Werner Wohltmann

Page range: 1-11

Abstract

This paper evaluates the performance of optimal simple policy rules in the presence of news shocks. It is shown that the inclusion of forward-looking elements enhances the performance of simple optimized interest rate rules when agents learn about future disturbances in advance. We provide a rationale for this result by demonstrating that, if shocks are news shocks, the optimal unrestricted control rule under commitment contains as a basic principle a forward-looking element.

April 19, 2016

Rising Import Demand in China: Cui Bono and Why?

Rolf Langhammer

Page range: 12-21

Abstract

The paper measures income elasticities of demand for manufacturing imports in China since 1990 disaggregated by major trading partners such as the US, Japan, Germany and rest of the EU. German exporters seem to have benefited from the highest demand elasticities. The paper proposes explanatory factors such as a high degree of integration in international production chains and higher presence of foreign direct investment in China compared to partner countries responsible for the German success.

April 19, 2016

Capital inflows, Current Accounts, and Exchange Rate Regimes in Central East Europe during and after the Global Financial Crisis

Horst Brezinski, Johannes Stephan

Page range: 22-39

Abstract

This contribution is concerned with the real economy effects of the current global crisis in Central East Europe. It analyses the way that the global financial crisis has transmitted into Central East Europe (contagion) by focussing on the drying up of capital inflows (in particular foreign direct investment), the worsening of current account imbalances, the role of the exchange rate regimes, and of increasing foreign currency borrowing during the years before the crisis. The analysis shows that the growth and development model of the region, which featured current account deficits financed by capital inflows, served as an accelerator for the adverse effects of contagion in Central East Europe. Countries with a fixed exchange rate to the euro proved to be the countries in the region hit hardest, whereas a flexible exchange rate appears to have acted as a shield against contagion. This casts doubts on the preferability of the planned rapid adoption of the euro in some of the countries in Central East Europe.

April 19, 2016

Von der Finanzkrise zur Schuldenkrise

Walter Wittmann

Page range: 40-55

Abstract

This paper reviews the main developments leading to the actual financial and debt crisis. It starts with the expansionary monetary policy experiment in the US in 2002, which led to a bubble in stock markets and real estate markets. When the bubble burst, the latter provoked the subprime crisis. Banks holding subprime assets made substantial losses. Especially investment banks relying on refinancing in the capital market got in trouble. When Lehman Brothers failed the interbank markets collapsed and it was only due to the collective action of central banks and government that the financial system could be stabilized. The government involvement raised the public debt in many countries to unsustainable heights transforming the financial crisis into a public debt crisis. In Europe the weaker Euro member countries, burdened with both high public debt and high foreign debt, experienced steeply rising risk premia. In order to avoid a default of a member country as well as a default of their own banks, the stronger Euro countries made available guaranties, which will, in the longer run, diminish their own credit rating. The paper concludes with the skeptical note, that both the banking crisis and the public debt debt crisis may be with us for a long time to come.

April 19, 2016

Sind konsumbasierte Kapitalmarktmodelle mit europäischen Wertpapierrenditen vereinbar?

Benjamin R. Auer

Page range: 56-88

Abstract

This paper analyses whether the consumption based capital asset pricing model is consistent with asset return data from Denmark, Italy, Norway and Austria. The performance of the CCAPM is evaluated by applying the nonparametric methodology of Hansen and Jagannathan (1991) and adopting five alternative specifications of utility. In addition to standard power utility the recursive preferences model proposed by Epstein and Zin (1989) is adopted. Both internal and external habit formation (persistence) using the models proposed by Constantinides (1990), Abel (1990) and Campbell and Cochrane (1999) are also considered. The findings are evaluated using the test of Burnside (1994) and the pricing error measure of Hansen and Jagannathan (1997). It is found that the majority of models produce stochastic discount factors consistent with the data (at mostly low degrees of risk aversion). As far as the pricing errors of the models are concerned the model incorporating recursive utility can be considered best.

About this journal

Welcome! As of 2016 the Review of Economics as well as all other journals of Lucius and Lucius Verlagsgesellschaft are published by De Gruyter Oldenbourg.

Aims and Scope
The Review of Economics (Jahrbuch für Wirtschaftswissenschaften) is a peer-reviewed general interest journal and publishes articles from all fields of economics.
Only articles with a strong policy focus are considered for publication. The Review of Economics will consider papers that are based on (i) a well defined theoretical model (ii) an empirical analysis or (iii) an experimental or (iv) an evidence-based framework.
The Review of Economics is also highly interested in survey articles on important policy issues.
Since the Review of Economics intends to deliver a forum for policy contributions and to influence the public debate we guarantee a quick and efficient referee process (the initial publication decision will be made within a maximum of 90 days). The editors may decide to publish papers without a referee process whenever authors send their submissions together with the referee reports and the decision letter of the previous submission and explain how they reacted to the reports. Accepted articles will be pre-published on the internet page of the journal as soon as they are accepted. Because the Review of Economics is not an e-Journal all articles also appear in a regular print version with some delay.

Partner Journal
Czech Journal of Economics and Finance

The Czech Journal of Economics and Finance (ISSN 0015-1920) is an English-language, double-blind refereed academic journal published in Prague since 1951. It devotes special attention to monetary economics, public finance, financial economics, and international economics, but it is open to high-quality papers from all fields of modern economics. The editors prefer empirically oriented papers, but do not exclude review articles or theoretical contributions provided that they are of high quality and relevant to the journal's aims.

Volume 62 Issue 1

Issue of Review of Economics

Inhalt

News Shocks and Optimal Simple Rules

Abstract

Rising Import Demand in China: Cui Bono and Why?

Abstract

Capital inflows, Current Accounts, and Exchange Rate Regimes in Central East Europe during and after the Global Financial Crisis

Abstract

Von der Finanzkrise zur Schuldenkrise

Abstract

Sind konsumbasierte Kapitalmarktmodelle mit europäischen Wertpapierrenditen vereinbar?

Abstract