This paper evaluates empirically how, in the course of globalization, partisan politics affected social expenditures in a panel of OECD countries. I introduce an updated indicator of government ideology and investigate its interaction with the KOF index of globalization. Two basic results emerge: First, at times when globalization proceeded at an average pace, partisan politics had no effect on social expenditures, but leftist governments increased social expenditures when globalization was proceeding rapidly. Second, policies differed in the 1980s and 1990s: Leftist governments pursued expansionary policies in the 1980s. Yet partisan politics disappeared in the 1990s, but not because of globalization.

Did globalization restrict partisan politics? An empirical evaluation of social expenditures in a panel of OECD countries

The paper examines how new airport infrastructure influences regional tourism. Identification is based on the conversion of a military airbase into a regional commercial airport in the German state...

https://www.tandfonline.com/doi/pdf/10.1080/00343404.2020.1714022

How new airport infrastructure promotes tourism: evidence from a synthetic control approach in German regions

The independence of the central bank is routinely regarded as sacrosanct, at least for governments wishing to maintain credible monetary policy to meet inflation objectives. Yet empirical efforts to ascertain that routine economic policy advice are complicated by the endogeneity of inflation and independence. Using a large panel of up to 147 economies between 1970 and 2012, we revisit the claim that central bank independence leads to superior inflation outcomes from the perspective of democratic governance. We deploy a measure of the degree of democratic representation as an instrument for the independence of the monetary authority and obtain estimates of the causal effect of central bank independence on inflation. Our baseline results overturn the standard negative inflation-independence relationship. Further inquiry into parameter heterogeneity indicates that the result is driven by developing economies and is attributable to political-economy factors: insufficient transparency enables the pursuit of non-price-stabilization objectives.

The limits of central bank independence for inflation performance

We examine partisan bias in inflation expectations. Our dataset includes inflation expectations of the New York Fed’s Survey of Consumer Expectations over the period June 2013 to June 2018. The results show that inflation expectations were 0.46% points higher in Republican-dominated than in Democratic-dominated US states when Barack Obama was US president. Compared to inflation expectations in Democratic-dominated states, inflation expectations in Republican-dominated states declined by 0.73% points when Donald Trump became president. We employ the Blinder–Oaxaca decomposition method to disentangle the extent to which political ideology and other individual characteristics predict inflation expectations: around 25% of the total difference between inflation expectations in Democratic-dominated versus Republican-dominated states is based on how partisans respond to changes in the White House’s occupant (partisan bias). The results also corroborate the belief that voters’ misperceptions of economic conditions decline when the president belongs to the party that voters support.

/pdf/partisan-bias-in-inflation-expectations-mj8fezpxam.pdf

Partisan bias in inflation expectations

Small airports: Runways to regional economic growth?

We examine the extent to which government ideology has influenced monetary policy in OECD countries since the 1970s. In line with important changes in the global econ-omy and differences across countries, regression results yield heterogeneous infer-ences depending on the time period and the exchange rate regime/central bank de-pendence of the countries in the sample. Over the 1972-2010 period, Taylor rule speci-fications do not suggest a relationship between government ideology and monetary policy as measured by the short-term nominal interest rate or the rate of monetary expansion minus GDP trend growth. Monetary policy was, however, associated with government ideology in the 1990s: short-term nominal interest rates were lower under leftwing than rightwing governments when central banks depended on the directives of the government and exchange rates were flexible. Very independent central banks, however, raised interest rates when leftwing governments were in office. We describe the historical evidence for several individual countries.

Government ideology and monetary policy in OECD countries

Die Kalte Progression schwacht die Verteilungswirkungen des Steuersystems und fuhrt zu einer Ausweitung der Steuerquote, die sich der demokratischen Kontrolle entzieht. In der offentlichen Debatte wird zumeist die Kalte Progression im engeren Sinne thematisiert, die nur den Effekt steigender Preise berucksichtigt. Sie fuhrte zu Steuermehreinnahmen von 33,5 Mrd. Euro im Zeitraum von 2011 bis 2016. Deutlich groser wird das Ausmas der Kalten Progression, wenn auch der Effekt steigender Realeinkommen berucksichtigt wird. Dieser fuhrte zwischen 2011 und 2016 aufsummiert zu Steuermehreinnahmen von 70,1 Mrd. Euro. Ohne weitere Gesetzesanpassungen steigt das Ausmas der Kalten Progression sukzessive an, wenn man den Zeitraum bis 2030 betrachtet. Als Reaktion auf die Kalte Progression wird eine Steuertarifindexierung in Form eines Tarifs auf Radern vorgeschlagen.

Steuererhöhungen durch die Hintertür – fiskalische Aufkommenswirkungen der Kalten Progression

Studie im Auftrag des Ministeriums fur Heimat, Kommunales, Bau und Gleichstellung des Landes Nordrhein-Westfalen.

https://www.econstor.eu/bitstream/10419/213574/1/1677173270.pdf

Überprüfung der Einwohnergewichtung im System des kommunalen Finanzausgleichs in Nordrhein-Westfalen

Kurzstudie im Auftrag des Bayerischen Staatsministeriums fur Wirtschaft, Landesentwicklung und Energie.

https://www.econstor.eu/bitstream/10419/213570/1/1669975320.pdf

Der Flughafen Memmingen als Standortfaktor für die Region: Ergebnisse einer Unternehmensbefragung

Die offentliche Debatte um den Solidaritatszuschlag nimmt gegenwartig Fahrt auf. Am 9. August legte das Bundesfinanzministerium einen Gesetzesentwurf vor, der die Erganzungsabgabe fur gut 90% der Steuerzahler zuruckfuhrt. Dies soll durch die erhebliche Erhohung der derzeit geltenden Freigrenze erreicht werden. Die Beibehaltung des Solidaritatszuschlags fur einen Teil der Steuerzahler wirft allerdings einige Fragen auf, die der folgende Beitrag diskutiert. Zur Einordnung des Gesetzesentwurfs werden verschiedene Reformszenarien simuliert sowie deren Effekte auf das Steueraufkommen, die Einkommensverteilung und die Beschaftigung dargestellt.

Was bei einer Reform des Solidaritätszuschlags zu beachten ist

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