Karl-Heinz Tödter

Benford's Law as an Indicator of Fraud in Economics

Abstract Contrary to intuition, first digits of randomly selected data are not uniformly distributed but follow a logarithmically declining pattern, known as Benford’s law. This law is increasingly used as a ‘doping check’ for detecting fraudulent data in business and administration. Benford’s law also applies to regression coefficients and standard errors in empirical economics. This article reviews Benford’s law and examines its potential as an indicator of fraud in economic research. Evidence from a sample of recently published articles shows that a surprisingly large proportion of first digits, but not of second digits, contradicts Benford’s law.

Estimating the uncertainty of relative risk aversion

This note reports estimates of the coefficient of relative risk aversion, using a method recently proposed by Azar (2006). In contrast to his work, the complete information of US stock return data over the period 1926 to 2002 is utilized. Moreover, a bootstrap procedure is applied to estimate the associated uncertainty. Point estimates close to 3.5 are obtained. However, ranging from 1.4 to 7.1, the 95% confidence interval is wide.

Exponential Smoothing as an Alternative to the Hodrick-Prescott Filter?

The Hodrick-Prescott filter is criticised for its endpoint sensitivity, generation of spurious cycles, and arbitrariness in the choice of the smoothing parameter. Nevertheless, it has become a standard tool for estimating trends and detrending economic time series. This chapter discusses an extension of the two-sided exponential smoothing filter as a possible alternative to the Hodrick-Prescott filter for difference-stationary data.

Das Ökonometrische Modell der Deutschen Bundesbank: Entwicklung, Struktur und Perspektiven

Das makrookonomische Modell der Deutschen Bundesbank last sich mit einem modernen Hochhaus vergleichen: wahrend man in den unteren Etagen bereits wohnt und arbeitet (sprich: prognostiziert und analysiert), wird in den oberen Etagen noch gebaut (sprich: spezifiziert, getestet und geschatzt). Ein Bericht uber das makrookonomische Modell der Deutschen Bundesbank kann daher stets nur ein Zwischenbericht sein. Ich mochte diesen 1. Karlsruher Okonometrie-Workshop im Jahre 53 nach Tinbergen nicht nur benutzen, um die Struktur des ‘Gebaudes’ zu erlautern, sondern zunachst skizzieren, wie es entstanden ist. Abschliesend werde ich auf einige Probleme eingehen und Perspektiven fur die weiteren Arbeiten am Modell aufzeigen.

The role of internal financing in a Ramsey model with financial intermediation

This note integrates internal financing, costly financial intermediation, and interest on household savings into a Ramsey model, extending the approach of Bhattarai (2005) in several respects. The study finds that the cost of financial intermediation creates a welfare loss, even under the assumption of perfect competition in the financial sector, i.e. when the spread between credit and deposit rates vanishes. Restoring the efficient equilibrium requires both, perfect competition and internal financing of replacement investment.