An inquiry into institutional components of the banking-macro nexus (OeNB)

The research project aims at an economic inquiry into the evolution of credit-rules and their influence on systemic risk and economic stability. In the theoretical part we compare top-down and bottom-up approaches of monetary transmission, with emphasis on the credit channel and develop an institutional theory of the evolution of credit-rules. In an empirical survey we analyse and visualize on the one hand available data on investment decisions, credit and debt obligations in Eurozone’s firm-bank networks and link them to macro aggregates. On the other hand we look into the Bank Lending Survey, conducted by the European Central Bank (ECB). Building upon such an empirical fitting with institutional theory, the project finally aims at building an agent-based model capable of describing the process of money-creation and money-destruction via credit along endogenous bottom-up logic.

Project Webpage

Project Leader: Gerhard Hanappi
Researchers: Manuel Scholz-Wäckerle, Bernhard Rengs
Status: Running
Funding: OeNB (project 15299), duration 3 years OeNB


Projects Finished during the last years

WWWforEurope-Welfare, Wealth and Work for Europe

The objective of this 4-year project is to provide the analytical basis for a socio-ecological transition in Europe: the change to a new growth path with smart, sustainable and inclusive growth as is envisaged in the EU 2020 strategy. In order to support the transition, we analyze the need, the feasibility, and best practice for change, specifying the institutional changes needed at all policy levels to implement these options. The old and new challenges Europe is facing define the starting point: globalisation, new technologies and postindustrialisation, demographic change and ecology in the context of welfare systems that have come under stress due to high public deficits. The vision is that Europe will become a role model for a "high road growth path" which actively incorporates social and ecological goals, employment, gender and cultural aspects in an ambitious, forward looking way while continuing to be competitive in a globalised world. To achieve these objectives, the consortium will carry out and synthesize robust research in research areas covering the challenges to the welfare system, the biophysical dimension of socio-economic development, the identification of drivers towards socio-ecological transition, the role of governance and institutions on the European as well as the regional level. The consortium will benefit from ongoing dialogue with international experts in the form of expert panels and sounding boards, taking into account their views on the direction and feasibility for this new growth path. The project will be carried out by a consortium of 33 partners from universities and research institutes with international and interdisciplinary expertise. It represents 12 member states. High level Scientific and Policy Boards will monitor the analysis and the policy conclusions to guarantee the impact and dissemination of the results.

Project Webpage

The project's most current working Paper can be found here: Project Working Paper

Project Leader: Alexia Fürnkranz-Prskawetz
Researchers: Bernhard Hammer , Inga Freund , Elke Loichinger, Michael Freiberger
Status: Finished
Funding: EU-FP7-SSH-2011-1 (290647), duration 4 years FWF

National Transfer Accounts and intergenerational redistribution in European institutional settings

In some age groups people consume more than they earn and contribute to production, while in other age groups it is vice versa. The difference (“lifecycle deficit”) has to be covered through a combination of public transfers, private transfers or asset based flows. National Transfer Accounts (NTA) is a system for measuring economic flows across age at the aggregate level in a manner consistent with National Income and Product Accounts. The project focuses on building up NTA accounts for Austria and Slovenia and contributes to a comparative analysis where we compare NTA accounts across European countries emphasizing the role of different institutional settings.

Project Leader: Alexia Fürnkranz-Prskawetz
Researchers: Joze Sambt , Bernhard Hammer
Status: Finished
Funding: FWF (project I 347-G16), duration 3 years FWF


Productivity, Wages and Training in Ageing Societies - An Analysis Based on an Austrian Employer-Employee Panel Dataset

Against the background of the ongoing demographic development in terms of population ageing we are studying the impact of the age structure of the workforce on labour productivity at the firm level. Our analysis is based on a newly created matched employer-employee panel data set (2002-2005) for Austria allowing us to simultaneously focus on workforce characteristics like age, gender, occupation, etc. and firm heterogeneity. While previous results on matched employer-employee data for countries like France, Sweden, Norway, etc. often hinted towards a hump-shaped age-productivity profile, more recent results that apply dynamic panel data models hint towards a concave relation between age and productivity at the firm level.

Project Leader: Alexia Fürnkranz-Prskawetz
Researchers: Bernhard Mahlberg, Inga Freund
Status: Finished
Funding: FWF (project P21475), duration 4 years FWF

Economic Perspectives of Europe as Part of the Global Economy Based on Simulation Scenarios (OeNB)

The project studies the consequences for the Eurozone and its member states of the recent financial, economic and debt crisis and elaborates on the necessities and possibilities of adjustments in economic structures and policies by combining the following theoretical, empirical und technical instruments:
(i) employing crisis-relevant elements of the theory of the formation and destruction of nation states and international unions in conjunction with the endogenous version of the optimum currency area theory;
(ii) evaluating the macroeconomic and structural indicators which are supposed to reflect the competitiveness of nations with respect to the global division of labour, and analysing the experiences of historical monetary unions;
(iii) designing simulation scenarios for the future development of the Eurozone with coherent options of medium to long term policy strategies.

Project Webpage

Project Leader: Heinz Handler
Researchers: Fritz Breuss, Gerhard Hanappi, Bernhard Rengs, Manuel Scholz-Wäckerle
Status: Finished
Funding: OeNB (project 14261), duration 1,5 years OeNB


Indicators of Generational Fairness and Sustainability of Social Transfer Systems

The reallocation of economic resources over age, i.e. over time as well as over generations, plays a fundamental role in the life cycle of an individual and in the organization of a society. Besides asset accumulation, the most important reallocation mechanisms are intra-familial as well as public transfers. Population ageing and the corresponding change in the ratio of transfer-receivers to –payers puts some of these transfer systems under high pressure, e.g. the pension, health and long-term-care system. Based on data of the National Transfer Accounts (NTA) system the aim of the project is to define measures for generational equity and sustainability of social transfer systems under a changing age-structure of the population. National Transfer Accounts constitute a method consistent with the System of National Accounts and measure the reallocation of resources over age. The data-set includes age-profiles of consumption, income and asset endowment as well as age-profiles of the in- and outflows of resources for various transfer systems. We distinguish between public and private transfers, whether they are cash or in-kind and also by the purpose of the transfer (education, old age support…). For the years 2000 and 2005 National Transfer Accounts for Austria are compiled within an international project financed by the ESF and the FWF. For the year 1995 such a data-set is in progress. Since NTA data measure the benefits and contributions of each age-group to a certain transfer-system, these data are predestined to study the impact of a change in the age-structure on the transfer-systems. We adapt existing methods and develop new indicators to study the current and future benefits and burdens for each age-group. In this way we obtain measures for the generational equity and sustainability of the transfer systems. The availability of such data for several years allows for a better understanding of the changes of these transfer-systems over time. Comparisons with other countries enable a better understanding of the peculiarities of the Austrian reallocation system. In addition to a detailed description and analysis of the Austrian reallocation system, a central focus of the project will be a comparison with Sweden, a country that possesses a highly developed social security system which is in many fields regarded as a forerunner model.

Project Leader: Alexia Fürnkranz-Prskawetz
Researchers: Bernhard Hammer
Status: Finished
Funding: WKW (Wirtschaftskammerpreis 2011), duration 4 months WKW


Evolution of institutions in new challenging socio-economic environments, with special focus on the Austrian Central Bank (OeNB)

In this research project we study the ontological, heuristic and methodological foundations of endogenous institutional change in general and apply these findings within a theoretical explanation of the evolution of the Austrian Central Bank in particular. We propose to take an ontologically monistic position, i.e. evolutionary realism or critical naturalism (Roy Bhaskar) for example. In order to analyse endogenous change in institutional systems, it is suggested to use heuristic devices building upon the idea of habits and cumulative causation (Th. Veblen), rules of conduct and group selection (F.A. von Hayek), entrepreneurship and creative destruction (J.A. Schumpeter), habitus and the field (P. Bourdieu). Concerning methodological considerations we concentrate on a synthesis of complex adaptive systems and evolutionary dynamics. Hence the project also presents an agent-based simulation of interacting and evolving institutions, where emerging institutional networks shall be compared with the complex structure of global financial systems; especially with the systemic position and relation of national (e.g. OeNB), regional (commercial) and global banks (e.g. ECB, FED).

Project Webpage

Project Leader: Gerhard Hanappi
Researchers: Manuel Scholz-Wäckerle
Status: Finished
Funding: OeNB (project 13350), duration 2 years OeNB


Der Prozess der Staatenbildung aus ökonomischer Sicht

Im vergangenen Jahrhundert wurden weltweit Staatsgrenzen in einem enormen Ausmaß neu gezogen. Einschneidende politische Ereignisse wie der Zweite Weltkrieg und das Ende des Kalten Krieges führten gemeinsam mit dem Niedergang des Kommunismus zu einer Vielzahl von nationalen Abspaltungen und waren somit für das Entstehen neuer politischer Akteure in Europa maßgeblich verantwortlich. Andererseits repräsentiert das Ende des Kolonialismus den primären Einflussfaktor für den Ursprung vieler Staaten in Afrika und Asien. Einhergehend mit der steigenden Anzahl verhältnismäßig kleiner Nationalstaaten gewannen supranationale Institutionen wie der Europäischen Union, NAFTA und ASEAN in derselben Zeit an Bedeutung. Die herkömmliche ökonomische Literatur vernachlässigt die Relevanz der Staatenbildung, obwohl die zuvor angeführten Ereignisse zu schwerwiegenden Veränderungen sowohl im ökonomischen Leben als auch im Alltag geführt haben. In gängigen Mainstream-Modellen ist der Staat exogen vorgegeben, Raum als solches wird zumeist gar nicht erst in die Betrachtung miteinbezogen. Somit bleiben wichtige Themen wie der Prozess kontinentaler Blockbildung (sowohl im ökonomischen als auch politischen Sinne) und die Tendenz zu kleineren Ländern unerklärt.

Project Leader: Gerhard Hanappi
Researchers: Wolfgang Radax
Status: Finished
Funding: FWF (P19973), duration 3 years FWF


Ageing Society - Altern in der Stadt: Aktuelle Trends und
ihre Bedeutung für die strategische Stadtentwicklung

Ageing Society was a Vienna-based research project for the City of Vienna, consisting of 9 subprojects and some expert assessments. This was a collaborative effort of WU-Wien (Vienna University of Businesss Administration), TU Wien (Vienna University of Technology), ARC (Austrian Research Centers), and KMU Forschung Austria.
The subproject "Urban Economics and Ageing" tried to build a regional economic model of the city of Vienna, while integrating social and health components into the model. Using empirical data a computer simulation of the main relations of the viennese economy and residents was built. It was used to evaluate the mid and long-range effectivity of municipal policy measures.

Project Leader: Bernhard Böhm
Researchers: Gerhard Hanappi, Bernhard Rengs,
Irene Hofstätter, Georg Görg
Status: Finished
Funding: City of Vienna, "Wien denkt Zukunft" Wien


Produktivitätsentwicklungen und der Dollar-Euro Wechselkurs

Im Rahmen dieses Forschungsprojektes soll der Zusammenhang zwischen dem Dollar-Euro-Wechselkurs und der Produktivitätsverlauf in den USA und der Eurozone untersucht werden. Das Hauptaugenmerk richtet sich dabei auf langfristige Entwicklungen. Dies erklärt sich daraus, dass es zahlreiche Größen gibt, die temporär den Wechselkurs erheblich beeinflussen können. Hierzu zählen vor allem die Staatsausgaben, der Ölpreis, Geldmengenaggregate, Zinssatzänderungen und die politische Haltung der monetären und fiskalischen Autoritäten. Auf lange Sicht ist allerdings davon auszugehen, dass Produktivitätsentwicklungen die treibende Kraft für Wechselkursschwankungen darstellt.

Project Leader: Gerhard Hanappi (Helmut Frisch)
Researchers: Tobias Haberler
Status: Finished
Funding: OeNB (project 11617), duration 2 years OeNB


Gesamtwirtschaftliche Metamodellierung: Komplexe Dynamiken
und deren Visualisierung

This project explored ways to compare differently structured macroeconomic models using computational information visualization methods. To be able to compare a variety of models, the models were treated as a semi-black box (only the general function form of relations and variables' optional status of target or instrument variable were to be known). Thus the systems where simulated using real data, while artificial shocks to each variable at a time were introduced into the system. Thus the relations of the system were tested and mid- and longterm system-influences were deduced. These were shown in form of automatically generated graphs of the model's implicit relation structure - revealing inter- and transtemporal structures which represent all systemic effects of the model. This same analysis can be conducted wheter the model is a difference equation model, a computer simulation - as long as they use and produce data for discrete timesteps, for which data is available.

Project Leader: Gerhard Hanappi
Researchers: Bernhard Rengs, Andreas Unterluggauer
Status: Finished
Funding: OeNB (project 8656) OeNB


Die Auswirkungen des Strebens nach Status auf das Wirtschaftswachstum, die Leistungsbilanz und die gesellschaftliche Wohlfahrt

Selected results of the publications: The effects of the quest for status depend crucially on whether i) status is determined either by relative consumption or by relative wealth, and ii) labor supply is treated as fixed or modelled as a choice variable. In the case of endogenous labor supply, under both status specifications agents consume too much and accumulate too much capital in the long run. In contrast to the relative consumption approach, the relative wealth framework yields an excessive capital-labor ratio and, thus, also allows for too little work effort in the long run. In the short run, however, there is both underconsumption and excessive work effort. These inefficiencies can be offset by appropriate taxation of consumption and capital income, respectively.
The small open economy version of the Ramsey model has the implausible property that an impatient country asymptotically mortgages all of its capital and labor income. Our introduction of relative wealth preferences eliminates this feature by generating either a unique interior steady state or even multiple ones. Notably, a permanent increase in government expenditure crowds out long-run consumption more than one-for-one. If, in addition, installation costs of physical capital are introduced, then the evolution of net foreign assets can exhibit non-monotonicity. For example, subsequent to a positive productivity shock, the adjustment of the current account can be characterized by deficits followed by surpluses.

Project Leader: Franz Hof
Researchers: Walter H. Fisher
Status: Finished
Funding: OeNB (project 8701) OeNB

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