Archive

Jörg Goldberg:
Afrika im Brennpunkt der Entwicklungsdebatte

Kurt W. Rothschild:
The Rationality Hypothesis: Help or Hindrance?

Predator-Prey – An Alternative Model of Stock Market Bubbles and the Business Cycle
by Eduard Gracia

For the last quarter of a century, the Real Business Cycle model has dominated the interpretation of business cycles in mainstream economics; yet a number of significant empirical objections to it justify exploring an alternative approach. This paper proposes to base such an approach on a predator-prey mechanism, along the lines of the classical Lotka-Volterra model for ecosystem dynamics, where agency costs play the role of the predatory activity, in a process very similar to the one proposed by the classical Austrian School interpretation of the cycle (Hayek/Schumpeter). The model is consistent with both Rational Expectations and the Efficient Markets Hypothesis, and predicts that stock market valuations will regularly present bubbles and crashes synchronised with the business cycle without this implying any irrational behaviour on the part of the investors.

JEL Classification: E32

Altern ist Leben – Ist es auch finanzierbar?
von Gunther Tichy

The ageing of the European population gave rise to heated discussions. Most participants recommended severe reductions of public pensions, a shift towards a funded system and increased savings of the current generation to reduce the burden of the next one. The paper elaborates five counterarguments: (1) The total burden will not increase much, as the additional pensioners are partly compensated by a reduced number of unemployed. (2) Even with 1 percent growth per capita GDP will be some 60 percent higher in 2050, which should suffice to increase the living standard of the old and the young. (3) The real burden cannot be shifted, and a shift of the financial burden can prove counterproductive. (4) The pay-as-you-go system should not be abandoned, as it covers wider and more severe risks than a funded one. (5) Surveys show clearly that the population appreciates a public pension scheme and prefers higher contributions to reduced pensions.

JEL classifications: H 55, J 11, J 14, J 26

German Social Democratic Economic Politics in the Light of Agenda Theory
by Arne Heise

German Social Democracy is facing tremendous challenges of societal and economic changes: party dealignment, a bourgeoisification of society, the rise of media democracy, and economic and cultural globalisation. The party’s reaction – a third order change in its ideological objectives and a respective adjustment in its short term policy programme as the leading governing party in the redgreen coalition (AGENDA 2010) – is being investigated under the conditions of bounded rationality of voters and against the background of an unprecedented loss in acceptance by the electorate as well as the ordinary party member.

JEL classifications: A 19, H 55