Was short selling a cause of the financial crisis and should bets on falling stock prices be banned as a result? Andre Horovitz, Financial Risk Fitness GmbH, asserts that also short selling and non-backed CDSs can make sense for businesses without our having to assume a gambling motive. At the same time he favours necessary regulations for the financial markets. Martin Schütte, University of Munich, points out that the world financial system almost collapsed two years ago because of the uncontrolled growth of markets for speculative financial products. Now there is a danger of the same thing repeating itself. In order to prevent this, a prohibition of particularly dangerous products must be considered. For Barbara Hendricks, SPD parliamentary party, a prohibition of short selling of securities and uncovered credit default swaps would make sense with regard to necessary regulations, but would be an inadequate instrument. Sigrid Müller, Humboldt University of Berlin, maintains that bans on short selling cannot prevent stock market crashes. Their effect instead is to intensify a crisis. Furthermore they reduce liquidity and lead to a loss of information efficiency. She proposes a registration obligation as a regulatory alternative. Max Otte, Worms University of Applied Science, maintains that a prohibition of short selling of securities and uncovered credit default swaps are reasonable components of a comprehensive financial market regulation that must also include meaningful capital requirements, the taxation of financial transactions and the regulation of business models and products.
Hans Willgerodt
In his commentary Hans Willgerodt, formerly of the University of Cologne, critically examines the euro countries' assistance plan for Greece, scrutinises the success of the measures and analyses the effects that the plan will have.
Martin Zeil
In his keynote address delivered at the 61st Ifo Annual Meeting, Martin Zeil, Bavarian State Minister for Economic Affairs, Infrastructure, Traffic and Technology, examined budget consolidation and fiscal policy. At the outset Zeil stressed the need to introduce financial discipline throughout Europe and to prevent the EU from slipping into a transfer union. Budget consolidation has the highest priority and should begin by cuts in spending. The second task facing Germany is the creation of the basis for sustainable growth. And thirdly the system of taxation must be made more transparent and more just.
Eckart Bomsdorf and Kristian Dicke
In the presentation of population forecasts, densely populated countries frequently stand in the foreground. In the EU there are a number of countries that have less than 10 million inhabitants that are still of great importance for population development in the EU. Eckart Bomsdorf, University of Cologne, and Kristian Dicke, Cologne Graduate School in Management, Economics and Social Sciences, have examined demographic change in Denmark. The authors look at the development of the total number and the age structure of the Danish population as well as the importance of the individual components of the population changes. According to their calculations the population size will clearly increase in the middle and high scenarios, from 5.5 million in 2010 to 6.2 or to 7.2 million inhabitants by 2050. Only in the low scenarios will it fall slightly - to 5.3 million inhabitants. In terms of the age structure, a shift of the population, particularly of the middle aged to the 65 year-olds and older and to the under twenty year-olds will occur in all scenarios. And in all three scenarios the lowest shares of the group of 20-65 year olds will occur around 2040. The demographic burdens, for example for the statutory pension and health insurance system, will increase up to 2040 before a decline sets in again.
Joachim Gürtler and Arno Städtler
The Ifo Business Climate in leasing has been moving in positive territory since the beginning of this year, but the current level is still far below the long-term average. The investment indicator, based on a survey of leasing companies that is conducted jointly by Ifo and the Federal Association of German Leasing Companies (BDL), points towards an increase in investments in plant and equipment of less than one percent, i.e. still no sustainable recovery.
Jutta Albrecht and Jana Lippelt
Approximately 80 percent of worldwide energy demand is currently met by mineral oil, coal and natural gas. The share of non-fossil energy - from renewable energy and nuclear power - in total energy consumption of 135 countries is still small. In 2007 only 22 countries met their demand for energy to 20 percent or more from non-fossil energy sources, and 18 countries between 10 and 20 percent. This article discusses some of the energy alternatives.
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