Alfred Greiner

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• Prof
• Professor at Bielefeld University

Chaotic evolution of techniques

Climate change may affect economies and the welfare of people around the world. To design appropriate policy responses, the economic effects of climate change should be known. One strand in the literature empirically estimates the growth effects of climatic variations. However, those studies often neglect economic variables that have proven to be r...

In this paper we show that both climate models and economic models studying the effects of climate change are characterized by high uncertainty. Hence, far reaching policy implications such as the net zero goal lack a definite scientific foundation. Nevertheless, it cannot be excluded that the continued global warming will go along with high damage...

Unlabelled: Since December 2020 vaccines against the SARS-CoV-2 virus have been available. However, little is known regarding their effects on infections and on hospitalizations. To gain insight into this topic we empirically analyze the effects of the vaccinations against SARS-CoV-2 for European countries beginning 2021 to February 2022 with week...

This paper empirically studies public debt sustainability with the penalized panel splines approach for 25 EU economies from 2000 to 2019 by estimating the response of the primary surplus to lagged debt relative to GDP, respectively. A positive coefficient on average indicates sustainable policies, which is supported by all our results. Moreover, w...

The European Union has set up a fund in order to compensate countries for damages resulting from Covid-19 that hit the economies in an asymmetric way. We argue that payments should be based only on relative damages, expressed as losses relative to GDP, and any distribution mechanism implying that damages in the countries are treated differently is...

In this paper we study how the ongoing transition to newer technologies, what we refer to as dynamic structural change, in a doubly-differentiated R&D-based economy can generate both higher economic growth and a slowdown of climate change, thus, creating a win-win situation known as double dividend. We first consider the unregulated decentralised e...

In this note we consider an economic union consisting of sovereign national states. An asymmetric shock hits the union and as a result it decides to set up a fund in order to compensate the countries in the union. We show how sacrifice theory can be used to determine the compensation payments for the countries in a way such that the relative damage...

We develop an economic growth model that incorporates anthropogenic climate change and a publicly funded research sector that creates new technologies and simultaneously expands the productivities of existing technologies. Greenhouse gas emissions are affected by R&D activities both negatively, through the increase of output from productivity growt...

In this paper we analyze an inter-temporal optimization problem of a representative firm that invests in horizontal and vertical innovations and that faces a constraint with respect to total R&D spending. We find that there can exist two different steady-states of the economy when the amount of research spending falls short of an endogenously deter...

We develop an economic growth model that incorporates anthropogenic climate change. We include a publicly funded research sector that creates new technologies and simultaneously expands the productivities of existing technologies. The environment is affected by R&D activities both negatively, through the increase of output from productivity growth,...

In this paper we analyze the dynamics of an R&D differential game allowing for technological spillovers and sigmoid learning functions of multiproduct oligopolies. We demonstrate how the presence of learning together with spillovers may generate a rich set of outcomes, varying from constant leadership to catching-up and falling behind as well as fr...

In this paper we analyze the dynamics of an R&D differential game allowing for technological spillovers and sigmoid learning functions of multiproduct oligopolies. We demonstrate how the presence of learning together with spillovers may generate a rich set of outcomes, varying from constant leadership to catching-up and falling behind as well as fr...

This paper combines horizontal and vertical innovations to generate an endogenous growth model allowing for structural change as an endogenous phenomenon. Older technologies are continuously replaced by newer ones due to creative destruction, and new technologies appear as a result of horizontal innovations and due to the consumers' preference for...

In this paper, we present an intertemporal optimization problem of a representative R&D firm that simultaneously invests in horizontal and vertical innovations. We posit that learning-by-doing makes the process of quality improvements a positive function of the number of existing technologies with the function displaying a convex-concave form. We s...

In this paper we analyze effects of public debt on the long-run allocation of resources in a basic endogenous growth model with infinitely lived households. The government levies an income tax and issues government bonds to finance unproductive public spending. We demonstrate that in the case of flexible wages and elastic labour supply the balanced...

This contributed volume combines approaches of the current inequality debate with aspects of finance based on profound macroeconomic model analyses. Research on inequality has had a long tradition in economics. With the financial crisis from 2007, not only output decreased tremendously, but also inequality has risen since then. The book presents se...

This paper argues that boosting structural change in the world economy is a perspective way to mitigate climate changes. We analyse the dynamical R&D spillovers and cooperation between two sufficiently close economies under endogenous turnover of sectors (structural change). It turns out that the costless spillover of technology from one country to...

We analyze an endogenous growth model public educational spending. We show that the balanced budget policy and the policy with a slight deficit yield higher growth than a debt policy where public debt grows at the same rate as GDP, unless the government is a creditor. As concerns welfare, it can be demonstrated that a strong deficit policy yields l...

We analyze how different budgetary rules affect the stability of an economy in a basic endogenous growth model with public debt and a state-dependent consumption tax rate. We show that a discretionary policy implies that the government violates its inter-temporal budget constraint along a balanced growth path, whereas a balanced budget rule guarant...

In the last chapter we tested for sustainability of public debt in developed as well as in developing economies. One test we resorted to was to analyze the reaction of the primary surplus, relative to GDP, to variations in the public debt to GDP ratio. We found that there is empirical evidence that the primary surplus is a positive function of publ...

In this chapter, we focus on another important source of sustained growth, namely human capital formation. Therefore, we study two endogenous growth models with human capital accumulation that is the result of public spending. The government hires teachers and finances additional expenditures for human capital formation. As in the last section, it...

In the last chapter it was demonstrated that an economy with a balanced government budget or a debt policy such that debt grows less than GDP always generates a higher long-run growth rate compared to an economy where the government runs permanent deficits so that public debt grows at the same rate as all other variables. In addition, it could be s...

Modern research on sustainability of debt policies that applies statistical tests has started with the contribution by Hamilton and Flavin (1986) who analyzed whether the series of public debt in the USA contains a bubble term. Since then a great many papers have been written that try to answer the question of whether given debt policies can be con...

In the last chapters, we have analyzed endogenous growth models assuming that the government sticks to the intertemporal budget constraint and seen how different debt policies affect economic growth and welfare. In this chapter, we intend to contribute to the empirical research studying the relation between debt and economic growth where we proceed...

In this paper we empirically study the relation between public debt and economic growth. We analyze how the public debt to GDP ratio at a certain point in time is correlated with the GDP growth rate in the following period, where we consider a one-year time span, a three-year time interval and a five-years interval. Using panel data comprising seve...

This paper empirically studies the relationship between public debt and economic growth for selected emerging market economies by performing panel data estimations. The results reveal a statistically significant positive correlation between public debt and the subsequent growth rate of per capita gross domestic product (GDP). Population and investm...

This Handbook analyzes the macroeconomics of global warming, especially the economics of possible preventative measures, various policy changes, and potential effects of climate change on developing and developed nations.

Public debt has become a severe problem for a great many economies. While the effects of tax policies on the allocation of resources are readily derived, the mechanisms that make public deficits and debt influence the economy are not so easily understood. This book elaborates on the effects of public debt starting from the intertemporal budget cons...

In this paper we analyze an inter-temporal optimization problem of a representative firm that invests in horizontal and vertical innovations and that faces a constraint with respect to total R&D spending. We find that there may exist two different steady-states of the economy when the amount of research spending falls short of an endogenously deter...

In this paper we present and analyze a stylized model of endogenous growth with international technology spillover effects from the North to the South. The model allows for endogenous structural change and environmental degradation that reduces world output. We find that within this framework the costless technological spillovers foster structural...

In this paper we study the impact of environmental pollution in an endogenous growth model that allows for structural change. The model is based on doublydiff erentiated R&D where newer, less polluting technologies gradually replace older ones. The analysis shows that the presence of environmental externalities stimulates structural change but redu...

We consider a general class of endogenous growth models with infinitely lived households and analyze how different budgetary rules affect the stability of the economy. We show that a discretionary fiscal policy implies that the government always violates its inter-temporal budget constraint along a balanced growth path, whereas a balanced budget ru...

In this paper we analyse a growth model that includes environmental and economic variables as well as technological progress under different informational constraints on the behavior of economic agents. To simulate the informationally constrained economy, we make use of the non-linear model predictive control technique. We compare models with exoge...

This paper studies the relationship between public debt and economic growth for selected emerging markets performing panel data estimations. Several regressor variables are included, but the main focus is on public debt. The results reveal a significant positive correlation between public debt and the subsequent growth rate of per capita GDP. Popul...

In this paper we develop an economic growth model that includes anthropogenic climate change. We explicitly include a research sector that creates new technologies and simultaneously expands productivities of existing technologies. The environment is affected by R&D activities both negatively, through increase of output from productivity growth, as...

In a recent paper Minea and Villieu (2012) present an endogenous growth model with productive public spending and government debt and assert that their model can generate multiple balanced growth paths. We show that their result is non-generic and point out where the error in their analysis is. In addition, we demonstrate that their deficit rule is...

We present a monetary endogenous growth model and analyze the effects of fiscal and monetary policy with real money as an argument in the utility function. We show that a balanced government budget gives a higher balanced growth rate and lower inflation than a situation with permanent public deficits. It also leads to higher welfare compared to a s...

Testing the reaction of the primary surplus to variations in public debt, relative to GDP respectively, has been frequently resorted to in order to test for sustainability of a given debt policy. In this contribution, we analyze theoretically under which condition a positive reaction of the primary surplus to variations in debt implies a sustainabl...

We analyze effects of public debt in a basic endogenous growth model with productive public spending. We demonstrate that a discretionary policy violates the inter-temporal government budget constraint along a balanced growth path. A balanced government budget gives a unique saddle point stable growth path. With a rule based policy, two saddle poin...

In this note we theoretically investigate the question of whether the relationship between public debt and economic growth is characterized by an inverse U-shaped functional form. Starting point of our analysis is the paper by Checherita-Westphal et al. (2012) who present an endogenous growth model with public capital and public debt that displays...

In this article we elaborate on the test proposed by Bohn (1998) that suggests to study whether the primary surplus relative to Gross Domestic Product (GDP) is a positive function of the public debt to GDP ratio in order to detect whether debt policies are sustainable. We argue that this should be complemented by additional tests for countries with...

The paper considers the transition of an economy from non-renewable to renewable energy. The Hotelling theorem suggests to extract a non-renewable resource in an optimal way such that the resource tends to be depleted when optimally extracted. Yet, it might not be reasonable to deplete non-renewable energy sources that create externalities such as...

An intense debate has played out in recent years regarding how to implement a so-called "flexicurity system"-a labor market reform that combines flexibility, particularly in the hiring and firing process of firms, with security in the employment and income of the workforce. In Flexicurity Capitalism, Flaschel and Greiner lay out the macroeconomic s...

In this paper we investigate, against the background of Goodwin’s (1967) growth cycle model, a dual labor market economy and the consequences of introducing an unemployment benefit system and minimum wages in the second labor market and a maximum wage barrier in the first one. In the framework with free ‘hiring’ and firing’ in the both labor market...

Agricultural commodities, here considered as renewable products, are critical to many developing countries. Not only are their prices rising, along with price volatility on both spot and future markets, but also an increasing financialization of these products is making itself felt. All this may become a threat to many segments of the populations o...

In this paper, we analyze the so-called AK endogenous growth model with persistent unemployment due to wage rigidities that result from labor market imperfections. We demonstrate that the existence of a balanced growth path implies that it is unique or that there exist two balanced growth paths, depending on the structural parameters of the model....

In this note we work out the mechanism that makes public debt affect the allocation of resources in the long-run. To do so we analyze an AK growth model with elastic labour supply and a government sector. The government levies a distortionary income tax and issues bonds to finance both lump-sum transfers and non-distortionary public spending. We sh...

The paper argues that a process of capital accumulation exhibiting recurrent mass unemployment—due to the conflict over income distribution—does not represent a process that is adequate for a democratic society in the long run. The paper develops a basic macrodynamic framework where this process of cyclical growth is overcome by an ‘employer of fir...

In this paper we analyze effects of public debt on the long-run allocation of resources in a basic endogenous growth model with infinitely lived households. The government levies an income tax and issues government bonds to finance unproductive public spending. We demonstrate that in the case of flexible wages and elastic labour supply the balanced...

During the last decade the high unemployment rate in Europe, compared to the U.S., has been attributed to specific labor market problems of the Euro- pean economy. Recently, U.S. labor market specialists have become skeptical to consider labor market rigidities as the sole cause for the high and persistent unemployment in Europe. It has been argued...

We analyze effects of public debt on economic growth in a basic endogenous growth model with persistent unemployment due to wages rigidities. We show that there exists either a unique balanced growth path or there are two balanced growth paths depending on structural parameters and on the flexibility of the labour market. Further, public debt does...

In this paper we present an endogenous growth model with productive public capital and environmental pollution. Emissions result from production and raise the stock of pollution that negatively affects the utility of the household. The government levies an income tax and a tax on emissions and uses its revenues for public investment and for abateme...

In this paper we analyze an endogenous growth model with public capital and public debt where we posit that the primary surplus of the government is a positive function of cumulated past debt with an exponentially declining weight put on debt further back in time. We consider two scenarios: First, we study the model assuming that the government run...

â–º We test whether public debt has been sustainable in Japan, Germany and the USA. â–º We elaborate on the tests from a theoretical point of view. â–º A semi-parametric estimation technique where we allow for a time varying reaction coefficient is applied. â–º For the United States the high significance of the test results is encouraging despite t...

We present a growth model that contains minimum wages as one important element of a flexicurity economy where we allow for heterogeneous labor and for real wage rigidities. We show that the wage‐setting process, in its reference to the reservation wage of the first labor market, is crucial as regards stability of the economy and persistent or explo...