Halle Institute for Economic Research

We study the impact of higher capital requirements on banks’ balance sheets and their transmission to the real economy. The 2011 EBA capital exercise is an almost ideal quasi-natural experiment to identify this impact with a difference-in-differences matching estimator. We find that treated banks increase their capital ratios by reducing their risk-weighted assets, not by raising their levels of equity, consistent with debt overhang. Banks reduce lending to corporate and retail customers, resulting in lower asset, investment, and sales growth for firms obtaining a larger share of their bank credit from the treated banks. Received November 28, 2016; editorial decision March 9, 2018 by Editor Philip Strahan. Authors have furnished an Internet Appendix, which are available on the Oxford University Press Web site next to the link to the final published paper online.

Crop yield loss due to flooding is a threat to food security. Submergence-induced hypoxia in plants results in stabilization of group VII ETHYLENE RESPONSE FACTORs (ERF-VIIs), which aid survival under these adverse conditions. ERF-VII stability is controlled by the N-end rule pathway, which proposes that ERF-VII N-terminal cysteine oxidation in normoxia enables arginylation followed by proteasomal degradation. The PLANT CYSTEINE OXIDASEs (PCOs) have been identified as catalysts of this oxidation. ERF-VII stabilization in hypoxia presumably arises from reduced PCO activity. We directly demonstrate that PCO dioxygenase activity produces Cys-sulfinic acid at the N terminus of an ERF-VII peptide, which then undergoes efficient arginylation by an arginyl transferase (ATE1). This provides molecular evidence of N-terminal Cys-sulfinic acid formation and arginylation by N-end rule pathway components, and a substrate of ATE1 in plants. The PCOs and ATE1 may be viable intervention targets to stabilize N-end rule substrates, including ERF-VIIs, to enhance submergence tolerance in agriculture.

The outcome of any important macroeconomic policy change is the net effect of forces operating on different parts of the economy. A central challenge facing policymakers is how to assess the relative strength of those forces. Economists have a range of tools that can be used to make such assessments. Dynamic stochastic general equilibrium (DSGE) models are the leading tool for making such assessments in an open and transparent manner. We review the state of mainstream DSGE models before the financial crisis and the Great Recession. We then describe how DSGE models are estimated and evaluated. We address the question of why DSGE modelers—like most other economists and policymakers—failed to predict the financial crisis and the Great Recession, and how DSGE modelers responded to the financial crisis and its aftermath. We discuss how current DSGE models are actually used by policymakers. We then provide a brief response to some criticisms of DSGE models, with special emphasis on criticism by Joseph Stiglitz, and offer some concluding remarks.

This study was performed to highlight the relationship between single dietary risk factors and cardiovascular diseases (CVDs) in the WHO European Region. We used the comparative risk assessment framework of the Global Burden of Disease Study to estimate CVD mortality attributable to diet; comprising eleven forms of CVDs, twelve food and nutrient groups and 27 risk-outcome pairs in four GBD regions including 51 countries by age and sex between 1990 and 2016. In 2016, dietary risks were associated with 2.1 million cardiovascular deaths (95% uncertainty interval (UI), 1.7-2.5 million) in the WHO European Region, accounting for 22.4% of all deaths and 49.2% of CVD deaths. In terms of single dietary risks, a diet low in whole grains accounted for approximately 429,000 deaths, followed by a diet low in nuts and seeds (341,000 deaths), a diet low in fruits (262,000 deaths), a diet high in sodium (251,000 deaths), and a diet low in omega-3 fatty acids (227,000 deaths). Thus, with an optimized, i.e. balanced diet, roughly one in every five premature deaths could be prevented. Although age-standardized death rates decreased over the last 26 years, the absolute number of diet-related cardiovascular deaths increased between 2010 and 2016 by 25,600 deaths in Western Europe and by 4300 deaths in Central Asia. In 2016, approximately 601,000 deaths (28.6% of all diet-related CVD deaths) occurred among adults younger than 70 years. Compared to other behavioural risk factors, a balanced diet is a potential key lever to avoid premature deaths.

This paper presents a vision that advocates hydropedology as an advantageous integration of pedology and hydrology for studying the intimate relationships between soil, landscape, and hydrology. Landscape water flux is suggested as a unifying precept for hydropedology, through which pedologic and hydrologic expertise can be better integrated. Landscape water flux here encompasses the source, storage, flux, pathway, residence time, availability, and spatiotemporal distribution of water in the root and deep vadose zones within the landscape. After illustrating multiple knowledge gaps that can be addressed by the synergistic integration of pedology and hydrology, we suggest five scientific hypotheses that are critical to advancing hydropedology and enhancing the prediction of landscape water flux. We then present interlinked strategies for achieving the stated vision. It is our hope that by working together, hydrologists and pedologists, along with scientists in related disciplines, can better guide data acquisition, knowledge integration, and model‐based prediction so as to advance the hydrologic sciences in the next decade and beyond.

We use the historical self-employment rate as an indicator of a regional culture of entrepreneurship and take it as an instrument to analyze the effect of entrepreneurship on economic growth in recent periods. The results indicate that German regions with a high level of entrepreneurship in the mid-1920s have higher start-up rates about 50 years later. Thus, a regional culture of entrepreneurship is an important resource for the persistence of entrepreneurship. Furthermore, we find that there is a significant effect of start-up activity on regional employment growth when using entrepreneurship culture as instrument for start-up activity.

Abstract This paper explores how banks react to an exogenous shock caused by Hurricane Katrina in 2005, and how the structure of the banking system affects economic development following the shock. Independent banks based in the disaster areas increase their risk-based capital ratios after the hurricane, while those that are part of a bank holding company on average do not. The effect on independent banks mainly comes from the subgroup of highly capitalized banks. These independent and highly capitalized banks increase their holdings in government securities and reduce their total loan exposures to non-financial firms, while also increasing new lending to these firms. With regard to local economic development, affected counties with a relatively large share of independent banks and relatively high average bank capital ratios show higher economic growth than other affected counties following the catastrophic event.

Monetary policy can have an impact on economic and financial stability through the risk taking of banks. Falling interest rates might induce investment into risky activities. This paper provides evidence on the link between monetary policy and bank risk taking. We use a factor-augmented vector autoregressive model (FAVAR) for the US for the period 1997–2008. Besides standard macroeconomic indicators, we include factors summarizing information provided in the Federal Reserve’s Survey of Terms of Business Lending (STBL). These data provide information on banks׳ new loans as well as interest rates for different loan risk categories and different banking groups. We identify a risk-taking channel of monetary policy by distinguishing responses to monetary policy shocks across different types of banks and different loan risk categories. Following an expansionary monetary policy shock, small domestic banks increase their exposure to risk. Large domestic banks do not change their risk exposure. Foreign banks take on more risk only in the mid-2000s, when interest rates were ‘too low for too long’.

The quantitative distribution pattern of Ki-67 protein and proliferating cell nuclear antigen (PCNA) immunoreactivity was studied in human testis biopsies. In normal seminiferous epithelium Ki-67 is expressed in nuclei of spermatogonia, while PCNA additionally occurs in nuclei of primary spermatocytes. The staining pattern of spermatogonia is as follows (Ki-67-positive/PCNA-positive): 26.6 +/- 12.4%/46.3 +/- 9.5%. No stage-dependent differences were found. Biopsies with mixed atrophy (score < or =7) showed a significant (P < 0.05) decrease of immunopositive spermatogonia to 19.9 +/- 3.0%/31.4 +/- 5.7% (score 1) with minimal variation between different samples (score 7 to 1). Associated with defined histological defects such as hypospermatogenesis (hyp), spermatogenic arrest at the level of spermatids (sda), spermatocytes (sca) or spermatogonia (sga), however, there was a significant (P < 0.05) decrease of Ki-67 staining in tubules showing hyp (28.6 +/- 8.8%), sda (25.6 +/- 9.3%), sca (23.7 +/- 9.3%) and sga (16.2 +/- 6.0%) and of PCNA staining in sca (32.2 +/- 11.8%) and sga (20.0 +/- 9.5%), respectively. The decrease of immunoreactive spermatogonia did not correspond to elevation of follicle stimulating hormone (FSH). These data demonstrate that the low spermatogenic efficiency in infertile men is not only due to postmeiotic events, but also to a decrease in the meiotic activity of spermatogonia, and is not related to serum FSH.

The question of how far it is necessary to include cultural factors in the analysis of economic processes has become topical again in recent years. The first contribution to this Forum introduces a cultural approach to economics. This is followed by an article that examines the transition processes in central and eastern Europe from an econocultural perspective. The next article deals with the concept of a country-specific national tax culture and its implications for tax policy, especially in the context of transformation processes. The final paper discusses Turkey’s economic culture and its possible impact on the country’s integration into the European Union.

The causes of biodiversity change are of great scientific interest and central to policy efforts aimed at meeting biodiversity targets. Changes in species diversity and high rates of compositional turnover have been reported worldwide. In many cases, trends in biodiversity are detected, but these trends are rarely causally attributed to possible drivers. A formal framework and guidelines for the detection and attribution of biodiversity change is needed. We propose an inferential framework to guide detection and attribution analyses, which identifies five steps-causal modelling, observation, estimation, detection and attribution-for robust attribution. This workflow provides evidence of biodiversity change in relation to hypothesized impacts of multiple potential drivers and can eliminate putative drivers from contention. The framework encourages a formal and reproducible statement of confidence about the role of drivers after robust methods for trend detection and attribution have been deployed. Confidence in trend attribution requires that data and analyses used in all steps of the framework follow best practices reducing uncertainty at each step. We illustrate these steps with examples. This framework could strengthen the bridge between biodiversity science and policy and support effective actions to halt biodiversity loss and the impacts this has on ecosystems. This article is part of the theme issue 'Detecting and attributing the causes of biodiversity change: needs, gaps and solutions'.

The present study examines the consequences of the planned coal phase-out in Germany according to various phase-out pathways that differ in the ordering of power plant closures. Soft-linking an energy system model with an input-output model and a regional macroeconomic model simulates the socio-economic effects of the phase-out in the lignite regions, as well as in the rest of Germany. The combination of two economic models offers the advantage of considering the phase-out from different perspectives and thus assessing the robustness of the results. The model results show that the lignite coal regions will exhibit losses in output, income and population, but a faster phase-out would lead to a quicker recovery. Migration to other areas in Germany and demographic changes will partially compensate for increasing unemployment, but support from federal policy is also necessary to support structural change in these regions.

The etiolated germination process of oilseed plants is characterized by the mobilization of storage lipids, which serve as a major carbon source for the seedling. We found that during early stages of germination in cucumber, a lipoxygenase (linoleate: oxygen oxidoreductase, EC 1.13.11.12) form is induced that is capable of oxygenating the esterified fatty acids located in the lipid-storage organelles, the so-called lipid bodies. Large amounts of esterified (13S)-hydroxy-(9Z,11E)-octadecadienoic acid were detected in the lipid bodies, whereas only traces of other oxygenated fatty acid isomers were found. This specific product pattern confirms the in vivo action of this lipoxygenase form during germination. Lipid fractionation studies of lipid bodies indicated the presence of lipoxygenase products both in the storage triacylglycerols and, to a higher extent, in the phospholipids surrounding the lipid stores as a monolayer. The degree of oxygenation of the storage lipids increased drastically during the time course of germination. We show that oxygenated fatty acids are preferentially cleaved from the lipid bodies and are subsequently released into the cytoplasm. We suggest that they may serve as substrate for beta-oxidation. These data suggest that during the etiolated germination, a lipoxygenase initiates the mobilization of storage lipids. The possible mechanisms of this implication are discussed.

1. Introduction to Op-Amps. 2. First Experience with an Op-Amp. 3. Inverting and Noninverting Amps. 4. Comparators and Controls. 5. Selected Applications of Op-Amps. 6. Signal Generators. 7. Op-Amps with Diodes. 8. Differential, Instrumentation, and Bridge Amplifiers. 9. DC Performance: Bias, Offsets, and Drift. 10. AC Performance: Bandwidth, Slew Rate, Noise, and Frequency Compensation. 11. Active Filters. 12. Modulating and Frequency Changing with the Multiplier. 13. Integrated Circuit Timers. 14. D to A and A to D Converters. 15. Power Supplies. Answers. Index.

Abstract The paper analyses the relationship between deposit insurance, debt-holder monitoring, and risk taking. In a stylised banking model we show that deposit insurance may reduce moral hazard, if deposit insurance credibly leaves out non-deposit creditors. Testing the model using EU bank level data yields evidence consistent with the model, suggesting that explicit deposit insurance may serve as a commitment device to limit the safety net and permit monitoring by uninsured subordinated debt holders. We further find that credible limits to the safety net reduce risk taking of smaller banks with low charter values and sizeable subordinated debt shares only. However, we also find that the introduction of explicit deposit insurance tends to increase the share of insured deposits in banks' liabilities.

Zusammenfassung Die jüngsten Erweiterungen der EU auf 27 Mitgliedsstaaten haben den europäischen Integrationsprozess in ein neues Stadium geführt. In einer Gemeinschaft von 27 zunehmend heterogenen Mitgliedsländern wird es immer schwieriger, gemeinsame Entscheidungen zu treffen, wodurch dem Prozess einer weiteren Vertiefung der Integration Grenzen gesetzt werden. Die Europäische Union hat auf diese Entwicklung mit der Einführung des Instruments der sog. „verstärkten Zusammenarbeit“ reagiert. Diese Option ermöglicht eine verstärkte Kooperation einer Untergruppe der gesamten Gemeinschaft (Club im Club), falls nicht alle Mitgliedsländer sich an dem Projekt beteiligen wollen. Im vorliegenden Beitrag wurden verschiedene Politikbereiche beispielhaft herausgegriffen, um mit Hilfe der Clusteranalyse Ländergruppen mit relativ homogenen Präferenzen voneinander abzugrenzen, um herauszufinden, von welchen Ländern und mit welchen Zielen möglicherweise eine verstärkte Zusammenarbeit innerhalb der EU ausgehen könnte. Es zeigt sich dabei, dass gegebenenfalls von Politikfeld zu Politikfeld jeweils unterschiedliche Ländergruppen die Integration vorantreiben würden.

The export of capital, legally and illegally, is a major problem for many developing countries. The following study analyses the causes and nature of the flight of capital and estimates its scale in 34 countries.

We investigate the consistency of efficiency scores derived with two competing frontier methods in the financial economics literature: stochastic Frontier and Data Envelopment Analysis. We sample 34,192 observations for all German universal banks and analyze whether efficiency measures yield consistent results according to five criteria between 1993 and 2004: levels, rankings, identification of extreme performers, stability over time and correlation to standard accounting-based measures of performance. We find that non-parametric methods are particularly sensitive to measurement error and outliers. Furthermore, our results show that accounting for systematic differences among commercial, cooperative and savings banks is important to avoid misinterpretation about the status of efficiency of the total banking sector. Finally, despite ongoing fundamental changes in Europe's largest banking system, efficiency rank stability is very high in the short run. However, we also find that annually estimated efficiency scores are markedly less stable over a period of twelve years, in particular for parametric methods. Thus, the implicit assumption of serial independence of bank production in most methods has an important influence on obtained efficiency rankings.

We propose a macroeconomic model with a nonlinear Phillips curve that has a flat slope when inflationary pressures are subdued and steepens when inflationary pressures are elevated. The nonlinear Phillips curve in our model arises due to a quasi-kinked demand schedule for goods produced by firms. Our model can jointly account for the modest decline in inflation during the Great Recession and the surge in inflation during the post-COVID period. Because our model implies a stronger transmission of shocks when inflation is high, it generates conditional heteroskedasticity in inflation and inflation risk. Hence, our model can generate more sizeable inflation surges due to cost-push and demand shocks than a standard linearized model. Finally, our model implies that the central bank faces a more severe trade-off between inflation and output stabilization when inflation is elevated.

Antiarrhythmic peptides enhance gap junction current in pairs of cardiomyocytes and coupling in cardiac tissue. To elucidate the underlying mechanisms, we investigated the effects of the antiarrhythmic peptide AAP10 (GAG-4Hyp-PY-CONH2) on pairs of adult guinea pig ventricular cardiomyocytes and pairs of HeLa cells transfected with rat cardiac connexin 43 (Cx43). By using a double-cell voltage-clamp technique in pairs of cardiomyocytes, we found that under control conditions the gap junction conductance (gj) steadily decreased with time (by -0.292 +/- 0.130 nS/min). Use of 50 nmol/L AAP10 reversed this rundown and increased gj (by +0.290 +/- 0.231 nS/min, Pa). In HeLa-Cx43 cells, AAP10 exerted the same electrophysiological effect. In these cells, AAP10 activated PKC (determined by using ELISA) in CGP54345-sensitive manner and significantly enhanced incorporation of 32P into Cx43 with dependence on PKC. If G-protein coupling was inhibited with 1 mM GDP-BS, we found the effects of AAP10 on 32P incorporation were also completely abolished. Next, we performed a radioligand binding study with 14C-AAP10 as radioligand and AAPnat as competitor. We found saturable binding of 14C-AAP10 to cardiac membrane preparations, which could be displaced with AAPnat. The Kd of AAP10 was 0.88 nmol/L. We conclude that 1) AAP10 increases gj both in adult cardiomyocytes and in transfected HeLa-Cx43 cells, 2) AAP10 exerts its effect via enhanced PKC-dependent phosphorylation of Cx43, 3) AAP10 activates PKCa, and 4) a membrane receptor exists for antiarrhythmic peptides in cardiomyocytes.