Christian A. Oberst

Economic Growth and Regional Labor Market Development in German Regions: Okun's Law in a Spatial Context

The inverse relationship between economic growth and labor market developments in the form of changes in the unemployment rate is known in economic literature as Okun’s law. The objectives of this paper are to estimate a regionalized Okun coefficient and its associated (regional) unemployment thresholds. The suitability and limitations of Okun’s law as a rule of thumb for regional economic growth and labor market policy are also discussed. Motivated by “Germany’s Jobs Miracle” in face of the economic crisis of 2008 and 2009, the existence of an uncoupling effect between economic and unemployment growth is questioned and whether regional economic growth is a driving force for regional labor market development. A regional dataset for the years 2002 to 2009 is employed for this study. The spatial dimension is pursued in two ways: a non-parametric approach using functionally defined labor markets as study areas and the application of spatial econometric panel data models, in particular the Spatial Durbin Error Model. The rationale is that functionally defined regional study areas are the appropriate spatial reference level for the analysis. It is found that, without accounting for spatial dependence, regionalized Okun coefficients are likely to be overestimated. The empirical results confirm a positive impact of economic growth on labor market performance; however, the estimated effect of regional economic growth is far lower than would have been expected. The paper illustrates the limited transferability of Okun’s law as a rule of thumb for growth dynamics on a regional level as well as limitations of regional growth dynamics for regional labor market development.

Explaining the Spatial Variation in Homeownership Rates: Results for German Regions

Lerbs O. W. and Oberst C. A. Explaining the spatial variation in homeownership rates: results for German regions, Regional Studies. This paper employs cross-sectional data on ninety-six German regions to investigate the interregional variability of homeownership rates. Among the explanatory variables, the analysis includes important regional housing market indicators as well as regional socio-demographic composition, urbanization and labour market performance. An estimation strategy is chosen which accounts for different forms of spatial dependence between the regional units. It is found that regional differences in the relative price of owning versus renting and the affordability of owner-occupied housing play a key role in explaining why homeownership rates vary so substantially across the country. The results indicate significant neighbourhood effects for several variables.

Europäische Metropolregionen in Deutschland – eine regionalökonomische Evaluation

ZusammenfassungSeit mehr als zehn Jahren ist das Konzept der Europäischen Metropolregionen in der deutschen Raumordnung verankert. Dieser Beitrag nutzt eine regionalökonomische Analysemethode, den Shift-Share-Ansatz, um die ökonomische Leistungsfähigkeit der elf deutschen Metropolregionen im nationalen Kontext zu vergleichen. Es zeigen sich zum einen starke Unterschiede zwischen den einzelnen Metropolregionen. Zum anderen werden vier Raumkategorien eingeführt, welche die intraregionale Dynamik der Metropolräume abbilden. Insbesondere die Agglomerationsräume um die Metropolkerne (engeres Umland) weisen hierbei eine überdurchschnittliche Wachstumsdynamik auf, das weitere Umland hingegen bleibt in der Entwicklung zurück.AbstractFor more than ten years the concept of European Metropolitan Regions is fixed in the German regional planning system. This article uses the shift-share-technique to assess the economic performance of the eleven German metropolitan areas based on a national comparison. Firstly, there is a widely spread difference in the economic performance of the metropolitan regions. Secondly, there are four categories of regions implemented to analyze the intraregional growth patterns. Here the category of agglomerations belts is identified as the growth foci in German employment. The hinterland of the metropolitan regions as a kind of edge regions between agglomeration and rural areas is characterized by relatively low economic performance.

The Future Expansion of HVDC Power Transmission in Brazil: A Scenario-Based Economic Evaluation

We discuss the expected future needs of the Brazilian electric grid operators for High Voltage Direct Current (HVDC) transmission lines against the background of a changing electricity sector in Brazil. On account of the spatial mismatch between the additional generation potential and the expected future electricity demand, a need for investments in long-distance transmission capacity is postulated. Due to the low losses incurred, HVDC technology is particularly suitable for this. For the analysis, we use different expansion scenarios for the year 2035 that are mainly based on hydropower or alternative renewable energy sources (primarily wind and solar power). Linear optimization is used to determine the optimal HVDC transmission lines to connect regions. The results show that large investments in HVDC transmission are needed, especially in the case of hydropower expansion, and that transmission capacity is a critical factor in the process of expanding the renewable energy generation capacity in Brazil.

Economic Policy Evaluation for the Deployment of Alternative Energy Sources in Brazil

In this paper we present an economic evaluation of scenarios for the future Brazilian power sector. We regard different paths for the capacity expansion with alternative energy sources aiming at the economically efficient diversification of the electricity mix. The scenarios are constructed in light of specific features of the Brazilian energy system, such as its enormous storage capacity, the imminent depletion of hydropower potential, and design characteristics of the regulated market. The economic relationships of the electricity generation sector are illustrated by micro‐economic models of industrial organization theory, parameterized with observed data from energy auctions and official market projections.