Zur Kern-Schelling Debatte um die Zukunft der EU und Österreichs

In seinen Vorstellungen zu einer Überwindung der Krise in der Europäischen Union, die er am 12. September in der FAZ veröffentlichte, hat Bundeskanzler Christian Kern höheren Investitionen das Wort geredet. Sein Befund war der einer fallenden Investitionstätigkeit im Verhältnis zum Bruttoinlandsprodukt in vielen Ländern Europas vor allem aber in den Krisenländern Südeuropas. Der Bundeskanzler erwartet keine Verbesserung der wirtschaftlichen Situation und ein Verpassen von Zukunftschancen, wenn die Investitionen nicht ansteigen. Diese Einschätzung ist nicht wirklich neu und wird von vielen Ökonomen geteilt unabhängig davon wo die „normale“ Investitionsquote angesetzt wird. Wahrscheinlich würde Finanzminister Schelling der Analyse ebenfalls zustimmen.

Die beiden Politiker unterscheiden sich in der Rolle, die sie dem Staat in der Auflösung der Investitionsflaute zuteilen. Während Bundeskanzler Kern den Staat in der Verpflichtung sieht, die Infrastrukturausgaben wenigstens nicht weiter zu kürzen und die Austeritätspolitik nicht als alternativlos ansieht, hält Finanzminister Schelling höhere Staatsausgaben für den falschen Weg, mehr Dynamik in der Wirtschaft zu entfachen. Das verlagert die Debatte von der Investitionsschwäche zur Finanzierung von staatlichen Investitionen. Dort gehört sie eigentlich aber gar nicht hin. Die Lücke kann in einer Marktwirtschaft nur durch Unternehmen und Haushalte nicht aber dauerhaft durch den Staat geschlossen werden. Andererseits gibt es mindestens drei gute Gründe kurzfristig die staatlichen Investitionen zu erhöhen, um die Flaute zu beenden und wirtschaftliche Dynamik anzustoßen.

Erstens, haben die Staaten sehr lange besonders bei Investitionen gespart und sind damit für einen Teil des Rückgangs verantwortlich. Das ist nicht ohne Konsequenzen für den Infrastrukturbestand. Im vom Finanzminister für die Haushaltsüberschüsse gelobten Deutschland ist jede zweite Autobahnbrücke reparaturbedürftig. Irgendwann müssen die Ressourcen zur Reparatur aufgebracht werden. Es ist daher unklar, warum eine Schulden-finanzierte Reparatur Belastungen in die Zukunft verschiebt, eine unterlassene Reparatur aber nicht. Deutschlands Investitionsstau war nur ein Beispiel, in anderen Ländern sieht es nicht besser aus. Und das sind nur Reparaturmaßnahmen, nicht die Zukunftsinvestitionen von denen der Bundeskanzler sprach. Zweitens, sind die Kosten für eine Fremdfinanzierung staatlicher Investitionen derzeit null oder wenigstens doch sehr niedrig. Die soziale Rendite staatlicher Investitionen müsste also negativ sein, um den Schelling-Test der Finanzierbarkeit zu reißen. Drittens, schließlich, kann Stabilisierungspolitik Konjunktur-belebende Wirkungen haben. Nach dem Lehman-Schock 2008 haben sowohl Österreich als auch Deutschland damit sehr gute Erfahrungen gemacht, selbst wenn funktionsfähige Autos auf Kosten der Steuerzahlen verschrottet wurden.

Ich teile die Analyse und sympathisiere mich mit der Lösung und doch stimmt für mich im Ton etwas nicht in den Vorstellungen des Bundeskanzlers zur Überwindung der europäischen Krise und zur Stimulierung der wirtschaftlichen Situation in Österreich. Es ist die Regierung als einzig handelnde Akteurin, die etwas für die Bürger tun muss postuliert der Bundeskanzler: in Europa muss sie für Gerechtigkeit sorgen und in Österreich 200.000 neue Arbeitsplätze schaffen und Vollbeschäftigung bringen. Der erste Punkt ist einfach nicht richtig: es ist nicht die EU, die für inter-personelle Umverteilung (sieht man von den Bauern ab) zuständig ist. Das ist Aufgabe der Nationalstaaten. Der zweite Punkt ist gefährlich. Natürlich kann die Regierung keine Vollbeschäftigung verordnen. Vollbeschäftigung ist keine Politikvariable, es ist ein Marktergebnis. Dafür kann und soll die Regierung arbeiten aber sie sollte sich nicht eine Größe zur Messlatte erklären, die sie nicht vollständig beeinflussen kann. Das reduziert die Unzufriedenheit sicher nicht, wenn das Ziel nicht erreicht wird.

200.000 neue Arbeitsplätze entstehen bis 2020 sicherlich. Angesichts des steigenden Arbeitsangebots (verlängerte Lebensarbeitszeit, Erhöhung der Beschäftigungsquoten von Frauen) sogar netto (neu abzüglich der verlorenen), aber Vollbeschäftigung wird wohl trotzdem nicht erreicht werden. Es braucht bei größeren Umbrüchen einfach Zeit bis sich das komplexe System angepasst hat. Arbeitsplätze allein werden daher wohl nicht die Lösung sein. Eine Lösung wird es ohne die Mitarbeit motivierter Bürger auch nicht geben, ebenso wenig wie es Gerechtigkeit geben kann, die nur in der Übernahme der Globalisierungs- und Modernisierungsrisiken durch die Gesellschaft besteht. Die gesamte Gerechtigkeitsdebatte krankt daran, dass wir als Gesellschaft nicht um eine mehrheitlich akzeptierte Vorstellung von Gerechtigkeit ringen. Dieses Ringen verlangte die Einbeziehung des Bürgers und davon war wenig zu lesen.

Vielleicht kamen die scharfen Angriffe des Finanzministers (zwei Salto rückwärts, Populismus, Sackgasse) ja daher, inhaltlich sind sie schwerer zu verstehen.

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Would a second Referendum on Brexit change the result?

A number of the Brexit (Leave) supporters are now unhappy with the actual outcome of the 23 June Referendum.

Is it because they were made aware of some new information? Apparently not all the promises that were made by the Leave campaign will be honored.

It is, however, possible that a second Referendum could change the result even if there were no new information about the consequences of a possible British EU exit. This possibility is to do with strategic thinking.

The typical voting model of a zero one decision (stay or leave the EU, in the present case) is such that all voters simply have a preference over the two outcomes. Some prefer to stay, some prefer to leave. If this is the case, voters do not have to engage in deep strategic thinking to simply vote their preference. In game theory jargon “voting for one’s preferred outcome is a (weakly) dominant strategy”.  The referendum will then simply demonstrate which of the two outcomes is favored by more people. Another referendum without any new information cannot change the result.

In the present case, however, many voters started googling “What is the EU?” only after the result of the Referendum became clear. Could it be that at least some of the leave voters did not really want to leave but simply wanted to make a statement of dissatisfaction? If this is the case, then some voters’ preferences could be as follows. Yes, they would prefer to stay in the EU, but they would like the result to be close. If you have such preferences and think that the result will be clearly in favor of staying in the EU – the bookies always saw Stay as the much more likely outcome – then you might cast your vote for the Leave campaign.

If enough people think so, then the ultimate outcome could be paradoxical. A majority of people vote to leave even though a majority of people actually prefer to stay. If this is the case a second referendum might correct this and reveal the true sentiment of British voters on the EU.

An Economist’s Solution to the Refugee Crisis: Tradable Asylum Quotas

This week I took a course on migration with Hillel Rapoport from the Paris School of Economics. Lots of interesting stuff there: For example, recent empirical research suggests that allowing highly educated persons to emigrate may actually lead to a net increase in human capital in the home country (“brain gain”). The reason: the possibility to emigrate and earn higher wages abroad increases incentives for everyone to get more education and this could outweigh the direct brain drain effect.

Less surprisingly, we also talked quite a bit about the ongoing refugee crisis and an economist’s solution to it, proposed in recent work by Fernandez-Huertas Moraga and Rapoport. Let the EU set quotas for member states according to some initial key (capacity index), let the countries trade quotas on a market similar to the EU’s emission trading system, then use matching theory to allocate refugees to countries until the quotas are filled.

So how would this work in theory? Suppose 1 million refugees need to be allocated to 2 countries, A and B. According to the initial key, country A has a quota of 600,000, country B a quota of 400,000 refugees – say, because A is 50 percent larger than B (in terms of population or GDP). Costs of hosting refugees include both expenses for housing, food and clothing as well as costs arising from potential immigration-related social conflicts. The marginal cost of hosting refugees is increasing: the more refugees you already have, the higher the additional cost of hosting one more. For some reason, at the initial allocation, country A has higher marginal costs of hosting refugees than B, perhaps because popular opinion in country A is more hostile towards foreigners. For concreteness, let initial marginal costs in A and B be 15,000 and 11,000 euros, respectively. In that case, A’s government will be happy to pay up to 15,000 per refugee for the right to transfer refugees to country B. B’s government is happy to accept more refugees for any price above 11,000 euros. Given a competitive market (or a good auctioning mechanism), refugees will be transferred from A to B until marginal costs of hosting refugees are equal across countries ensuring an efficient allocation of asylum seekers. In equilibrium, the price will be somewhere between 11,000 and 15,000 euros per refugee, and country A will host fewer than 600,000, country B more than 400,000 refugees. (Readers familiar with the Coase theorem will notice that the initial allocation of refugees is of no relevance for this result.)

Alright, I can already hear the moral outrage: How dare you put a price tag on refugees?! Well, whether you like it or not, we are already putting a price tag on refugees. 6,000 euros – that’s the compensation the EU Commission is now offering member countries for each relocated asylum seeker. What’s more, under any quota scheme, there have to be some penalties in place for countries that don’t fulfill their quota. And in order for the plan to be incentive compatible, the penalty per refugee not hosted must be higher than the marginal cost of hosting refugees. So at this point, we are merely talking about what the correct price tag (or, equivalently, the correct penalty for not fulfilling the quota) is. There is simply no way to find this out without some kind of market mechanism that elicits the true refugee-hosting costs, as perceived by the member countries’ governments.

There are, of course, problems with that proposal. First and foremost, though the initial distribution of quotas doesn’t matter for the final allocation of refugees across countries, it does matter for who receives how much money in the end. In our example above, the larger the initial quota of country A, the more it will have to pay to country B in equilibrium. This creates a very tricky bargaining situation as each government tries to get as small an initial quota as possible. Judging by the recent experience of intra-EU negotiations, this problem alone might kill the whole thing. But then again, if the EU wants to have any kind of quota system, it has to solve that problem somehow.

Once that problem is solved (I’m assuming the can-opener here), it should be a piece of cake to get the auctioning mechanism going. Also, the algorithm to match refugees to countries is no more complex than the ones used by your average online dating platform.

So, the plan is well within the realm of the technically feasible. It makes great economic sense. Alas, it’s probably a non-starter politically.

PS: Here’s Hillel Rapoports website for additional info.

Are we being stupid? – Part 3: Ideas on how to be less stupid.

In the previous parts of this blog I have talked about two things: firstly, about how most advanced economies are heavily dependent on innovation for sustained growth and, secondly, I’ve presented some macroeconomic figures and anecdotal evidence regarding the importance of innovation in Europe. In case I was not explicit enough throughout this series: I don’t believe Europe is doing enough to be and become the dynamic and innovative economic zone we could be. What do I think needs to change?

I think public and private expenditure on R&D and higher education is important, but I also believe that how much good it does depends a lot on what we use this money for and that some of our problems are structural: There are two points I want to stress in particular:

  1. Reforming our educational system

I believe that we need new concepts for education. Our education system plays a fundamental role in shaping the citizens that determine the (political) future of our nations and in forming the work force that ensures that our economies and societies remain dynamic and innovative and create the employment needed. However, this is the 21st century and yet, we are relying on a schooling system that largely stems from the industrialization era! We want people to generate innovation, to think out of the box and to tackle economic and social issues? We want them to learn, because they want to and not because we are legally forcing them to sit in school until they turn 15? Well, then maybe it is time we adapt the way we teach and also what we teach in our schools to modern life, families and children! (sounds radical rather than pragmatic, but sometimes incremental is just not enough)

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Recreational econometrics with GERD

In her last post, Katharina pointed to a great data source on R&D expenditure, GERD. In the comment section of that post we discussed the issue of cuts in government R&D expenditures. An interesting question in this context is whether public R&D expenditure is a complement to private R&D expenditure or a substitute. If it is a complement, cuts in the public R&D budget are very bad, because they can be expected to be followed by cuts in private research budgets. If it is a substitute, public R&D ‘crowds out’ private R&D, so that public cuts are not that bad because they can be expected to be replaced by private R&D.

There is an extensive literature on this question, yielding mixed results. So I asked myself what does GERD say? The figure below shows a scatterplot of government and private expenditure on R&D as a share in GDP for 36 countries in 2008. You can see that the data points are pretty much all over the place (Austria is marked red). It turns out that if you regress private on public R&D expenditure, you get a positive coefficient indicating complementarity. However, the coefficient is not statistically significant (t-ratio of 1.63) and the R-squared is very low. So we have no strong evidence for complementarity, but also no evidence for substitutability. Instead, what my recreational econometrics exercise suggests is that private R&D expenditure is pretty much independent from government research budgets.

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Are we being stupid? – Part 2: Strategic Foresight

In part 1 we have established that growth in the West relies on innovation and technology much more than growth in developing countries. We are the ones at the technology frontier, so if we want to grow, we need to be more innovative. In this blog I’ll mainly cover government policies regarding R&D and higher education, focusing a lot on expenditure (1). If you’re interested in broader measures, you could start here, with the Innovation Union Scoreboard 2014.

For those of you who like the big numbers, let me introduce you to GERD. GERD is the Gross Domestic Expenditure on R&D, which includes expenditure by business enterprises, governments and foreigners. In 2010 GERD stood at 245 673 million in absolute terms in the EU-27. Given that this does not really tell us much, GERD is normally calculated relative to GDP. Between 2000 and 2010 the ratio has roughly been flat at around 1.80-2% of GDP. This means that internationally the EU-27 figures are below those in other countries: Japan (3.45%), US (2.80%).2 There are also substantial differences within the EU. The highest expenditures in 2010 were reported from (how could it be different) Finland (3.87 %), Sweden (3.42 %) and Denmark (3.06 %).

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