- "Patterns
of Deception: Why and How Rising States Cloak Their Power."
latest version: August 14, 2008. (download
PDF)
Abstract:
This
paper examines the widespread practice of deliberate deception in
the international realm and presents a theory of "dynamic deception" that
helps predict when countries will try to understate their actual
strength and when they are likely to overstate it. Concretely, I
explain when and why a rising power will abruptly switch from understating
its military capabilities to overstating them and illustrate my theory
using data on Germany's behavior in the interwar years.
- "The
Elusive Link: New Evidence on the Interplay of Trade and Conflict." latest
version: April 10, 2008. (download
PDF)
Abstract:
This
paper revisits the view that trade fosters peaceful relations among
nations. Based upon a new data set covering the years 1900
to 1944, I first show that the track record of trade volumes in the
four major European powers and the U.S. is decidedly mixed before
and during World War I as well as World War II. Trade volumes rose in
five out of the nine wartime cases for which data are available.
Further, I show that in the case of Nazi Germany increased trade
was not a hindrance to, but rather a consequence of impending
conflict. These findings cast considerable doubt upon the validity
of the peace-through-trade hypothesis.
- "Revenue
Patterns in the U.S. States." latest version:
March 1, 2007. (download
PDF)
Please
note: This paper will be revised substantially in the near future.
Abstract:
This
paper empirically evaluates partisan policy influences
on state-level general fund revenue changes in all 50 American
states
for the period 1988 to 2004. Contrary to the earlier
literature on partisan tax policy in the U.S., I find little
substantively meaningful evidence to back up the claim of a systematic
difference in general fund revenue changes depending upon
state governors' party affiliation.
A July
2006 version has been published as the John-F.-Kennedy-Institut
Working Paper #135,
John-F.-Kennedy-Institute for North American Studies,
Freie Universität Berlin, and can be downloaded
as a PDF file here.
- with
Thomas Kreye. "The Value of Corporate
Industrial and International Diversification: Evidence from Germany." latest
version: July 14, 2007.
(download
PDF)
Abstract:
This paper
examines the stock-market valuation impact of industrial and international
diversification for German firms from 2000 to
2003. We posit that the relationship between industrial
diversification and valuation has an inverted-U-shape, while
international diversification should affect a firm's value in an
increasing, linear fashion. Using a novel data set, we find strong
empirical support for our first theoretical conjecture, yet only
limited support for the second one. In addition, we identify a
sizable positive interaction effect between R&D spending and
the
value of international diversification.
An earlier
version (February 2006) can be downloaded from the 2006 European Economic
Association annual conference website.
- "Defying
the Random Walk: An Empirical Assessment of Professional
USD/€ Foreign Exchange Rate Forecasts." latest
version: February 20, 2007. (download
PDF)
Abstract:
This
research note examines the accuracy of USD/€ foreign exchange rate
forecasts for four forecasting horizons. I find that
while professional forecasts do on average not outperform a simple
random walk model when the forecast horizon is either one month,
three months or twelve months, two-year forecasts perform notably
better than a simple extrapolation of the current exchange rate.
Note:
The accompanying data set can be downloaded here.
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