Issues 2006

Issues 2005

Issues 2004

Issues 2003

Issues 2002

Issues 2001

Issues 2000

Issues 1999

Issues 1998

Issues 1997

Issues 1996

Issues 1995

Older Issues

Instructions for Authors

Grafeneder-Weissteiner, T. and Prettner, K.  Agglomeration and population aging in a two region model of exogenous growth. No. 125. Feb. 2009

This article investigates the effects of introducing demography into the New Economic Geography. We generalize the constructed capital approach, which relies on infinite individual planning horizons, by introducing mortality. The resulting overlapping generation framework with heterogeneous individuals allows us to study the effects of aging on agglomeration processes by analytically identifying the level of trade costs that triggers catastrophic agglomeration. Interestingly, this threshold value is rather sensitive to changes in mortality. In particular, the introduction of a positive mortality rate makes the symmetric equilibrium more stable and therefore counteracts agglomeration tendencies. In sharp contrast to other New Economic Geography approaches, this implies that deeper integration is not necessarily associated with higher interregional inequality.

Keywords:  agglomeration; new economic geography; population aging
JEL-Classification: C61; F12; F15

Onaran, Ö., Stockhammer, E. and Grafl, L.  The finance-dominated growth regime, distribution, and aggregate demand in the US. No. 126. Feb. 2009

The finance-dominated growth regime has affected key macroeconomic variables in several contradictory ways. This paper investigates some of these effects: an increase of rentiers income, housing wealth and net financial wealth on private consumption expenditures and the effects of changes in payments to the rentier by the business on private investment expenditures. A Post-Kaleckian macro model is used as a starting point for this investigation. The paper thus contributes to two debates. First, it aims at clarifying some important macroeconomic effects of financialization. Second, it extends the analysis of distribution-led demand regimes by controlling for financialization variables.

Keywords:  distribution, demand, investment, consumption, foreign trade, financialization, finance-dominated growth regime, wage-led, profit-led, macroeconomics, Keynesian economics
JEL-Classification: E12; E20; E22; E25; E61

Stockhammer, E. The finance-dominated accumulation regime, income distribution and the present crisis. No. 127. April 2009

The paper discusses the interactions of changes in income distribution and the accumulation dynamics in the post-Fordist accumulation regime in OECD countries, which is characterized by deregulated financial markets. The neoliberal mode of regulation came with a decisive shift in power relations at the expense of labor, which is clearly reflected in the fall of wage shares across OECD economies. The notion of a “finance-dominated” accumulation regime is proposed to highlight that financial developments crucially shape the pattern and the pace of accumulation. Financial globalization has relaxed balance of payment constraints and thereby allowed the build up of big international imbalances. The combination of real wage moderation and financial liberalization has led to different strategies (or at least outcomes) in different countries. While some countries (like the USA) exhibit a credit-fuelled consumption-driven growth model that comes with large current account deficits, others (like Germany and Japan) show an export-driven growth model with modest consumption growth and large current account surpluses. Overall the finance-dominated accumulation regime is characterized by a mediocre growth performance and by a high degree of fragility.

Keywords:  financialization, finance-dominated accumulation regime, macroeconomics, financial system; financial stability, income distribution, debt-led growth, export-led growth
JEL-Classification: B50; E20; E21; E 29; E44; E60; P17

Leibrecht, M. and Scharler, J.  Banks, financial markets, and international consumption risk sharing. No. 128. May 2009

In this paper we empirically explore how characteristics of the domestic financial system influence the international allocation of consumption risk using a sample of OECD countries. Our results show that the extent of risk sharing achieved does not depend on the overall development of the domestic financial system per se. Rather, it depends on how the financial system is organized. Specifically, we find that countries characterized by developed financial markets are less exposed to idiosyncratic risk, whereas the development of the banking sector contributes little to the international diversification of consumption risk. We also find that countries with market-based financial systems manage to share a significantly larger fraction of their country-specific risk than bank-based economies.

Keywords:  international risk sharing, financial development, financial system
JEL-Classification: F36; F41

Fellner, W. and Grisold, A.  Positioning public service broadcasting in a competitive TV market: small country programming strategies based on a wide-reach genre. No. 129. July 2009

IThis article explores how a public service broadcasting company, namely ORF in Austria, has dealt with the challenges created by the dual system. An investigation of market requirements, public programming mandate, cost structure and financing needs reveals how economic and political constraints are interrelated. To illustrate this phenomenon, we focus on programming, specifically on the highly successful genre of popular folksy music (‘Volkstümliche Musik’). Opinions of decision-makers responsible for programming strategies at the Austrian PSB company are linked with a detailed empirical analysis of one prosperous production within that genre. This enables us to draw a number of conclusions on the strategies pursued by public service broadcasting companies to master the changed market conditions and draw attention to so far unattended topics