Policy
Policy Papers:
Reducing Wasteful Year-End Spending (in German), Wirtschaftsdienst, 2022, 102(6), 461-464. [PDF] +Response to a comment
Suppose your organization gives employees an annual budget to fulfill their tasks. Then employees spend leftover funds on unneeded or low-quality items at year-end, because the funds are about to expire. This is known as "use it or lose it." To address this problem, the paper recommends allowing a partial roll-over of unused funds to the next year. For example, 75% of left-over funds could be added to the employee budget next year, and the remaining 25% are returned to the organization. This provides incentives not to waste funds at year-end, and allows employees to make bigger useful investments in the future. The comment and response highlight that future budgets should not be cut in response to savings, otherwise such a "ratchet effect" kills incentives not to waste funds.
Economics Peer-Review: Problems, Recent Developments, and Reform Proposals
Econ peer-review suffers from several issues such as referee overreach and excessive revisions. The article discusses the main issues, surveys the relevant literature, and recommends solutions for reform. First, enforce referee guidelines that reports must explicitly separate their suggestions into essential and optional, with 3 essential maximum. Second, adopt conflict of interest policies for referees and punish non-disclosure. Third, use double-blind refereeing. Fourth, make better use of prior reports from other journals. Fifth, pay referees for prompt reports.
Price caps on groceries are not the answer to the UK’s inflation problem
A little explainer for non-economics why price controls are a bad idea to fight inflation. Some suggestions on alternatives. Fun fact: 75% of the UK public wants price controls.
This research paper analyzes the early period of the German Renewable Energy Act's feed-in tariffs for residential photovoltaic panels. Findings: Panels were not usually installed where they would have generated the most energy. Social interaction or neighborhood effects increased the propensity to adopt such panels even in regions with low solar potential. We argue a more competitive price setting mechanism, such as a multi-unit action, can improve the efficiency of the subsidy by reducing costs but also by getting panels to sunnier regions where they produce more. Auction mechanisms have now indeed replaced the earlier feed-in tariffs in Germany.