KCG Journal Articles

Introducing Dominant Currency Pricing in the ECB’s Global Macroeconomic Model

14th November 2019
KCG Secretary
Authors: Georgios Georgiadis and Saskia Mösle (Forthcoming, International Finance)

A large share of global trade being priced and invoiced primarily in U.S. dollar rather than the exporter's or the importer's currency has important implications for the transmission of shocks. We introduce this “dominant‐currency pricing” (DCP) into ECB‐Global, the ECB's macroeconomic model for the global economy. To our knowledge, this is the first attempt to incorporate DCP into a major global macroeconomic model used at central banks or international organisations. In ECB‐Global, DCP affects in particular the role of expenditure‐switching and the U.S. dollar exchange rate for spillovers: In case of a shock in a non‐U.S. economy that alters the value of its currency multilaterally[…]

Rules of Origin and the Profitability of Trade Deflection

14th November 2019
KCG Secretary
Authors: Gabriel Felbermayr, Feodora Teti and Erdal Yalcin (forthcoming, Journal of International Economics)

When a country grants preferential tariffs to another, either reciprocally in a free trade agreement (FTA) or unilaterally, rules of origin (RoOs) are defined to determine whether a product is eligible for preferential treatment. RoOs exist to avoid that exports from third countries enter through the member with the lowest tariff (trade deflection)[…]

Revisiting the Euro’s trade cost and welfare effects

14th November 2019
KCG Secretary
Authors: Gabriel Felbermayr and Marina Steininger (Forthcoming, Journal of Economics and Statistics)

When, about twenty years ago, the Euro was created, one objective was to facilitate intra-European trade by reducing transaction costs. Has the Euro delivered? Using sectoral trade data from 1995 to 2014 and applying structural gravity modeling, we conduct an ex post evaluation of the European Monetary Union (EMU). In aggregate data, we find a significant average trade effect for goods of almost 8 percent, but a much smaller effect for services trade[…]

Under Which Conditions Are Consumers Ready to Boycott or Buycott? The Roles of Hedonism and Simplicity

14th November 2019
KCG Secretary
Authors: Stefan Hoffmann, Ingo Balderjahn, Barbara Seegebarth, Robert Mai and Mathias Peyer (Ecological Economics, 2018, 147, 167-178)

There are two fundamental ways in which consumers can express their concerns and obligations for society through their consumption decisions: They can boycott companies that they deem to be irresponsible or they may deliberately buy from companies that they perceive to act responsibly[…]

Drivers of Renewable Technology Adoption in the Household Sector

14th November 2019
KCG Secretary
Authors: Anke Jacksohn, Peter Grösche, Katrin Rehdanz and Carsten Schröder ( Energy Economics, 2019, 81, 216-226)

Using data from the German Socio-Economic Panel, we undertake a simultaneous assessment of the importance of factors that are individually found to be significant for the adoption of renewable energy systems by households but are not yet tested jointly[…]

Virtue Ethics Between East and West in Consumer Research: Review, Synthesis and Directions for Future Research

14th November 2019
KCG Secretary
Authors: Guli-Sanam Karimova, Nils Christian Hoffmann, Ludger Heidbrink and Stefan Hoffmann (Forthcoming, Journal of Business Ethics)


This literature review systematically synthesizes studies that link consumer research to differences and similarities in virtue ethics between the East and the West, with a focus on early Chinese and ancient Greek virtue ethics. These two major traditions provide principles that guide consumer behavior and thus serve as a background to comparatively explain and evaluate the ethical nature of consumer behavior in the East and the West. The paper first covers Eastern and Western[…]

Which Is the Fairest One of All?: A Positive Analysis of Justice Theories

12th November 2019
KCG Secretary
Authors: James Konow (Cappelen, A.W. and Tungodden, B. (eds.), 2019 The Economics of Fairness, MA: Edward Elgar (reprinted from the Journal of Economic Literature, 2003): Northampton, 68-119)

This paper evaluates numerous positive and normative theories of justice in positive terms, i.e., in terms of how accurately they describe the impartial fairness preferences of real people. In addition, the paper proposes and defends an integrated justice theory based on[…]

Is Fairness in the Eye of the Beholder?: An Impartial Spectator Analysis of Justice

12th November 2019
KCG Secretary
Authors: James Konow (Forthcoming,Bauer, A.M. and Meyerhuber, M. (eds), Empirical Research and Normative Theory: Transdisciplinary Perspectives on Two Methodological Traditions between Separation and Interdependence, De Gruyter (reprinted from Social Choice and Welfare, 2009): Berlin)

A popular sentiment is that fairness is inexorably subjective and incapable of being determined by objective standards. This study, on the other hand, seeks to establish evidence on unbiased justice and to propose and demonstrate a general approach for measuring impartial views empirically. Most normative justice theories associate impartiality with limited information and with consensus, i.e., a high level of agreement about what is right. In both the normative and positive literature[…]