Are Germans wasting their savings abroad? CEPS Commentary, 7 April 2016

Germany is running a current account surplus of about 8% of GDP, which means that about one-third of all German savings (equal to 24% of GDP) has to be invested abroad every year. It has become by now almost a cliché that these huge excess savings are being wasted abroad. But this is a popular misconception based on the divergence between the available data on the (cumulated) current account balance (cCAB) of Germany and its net international investment position (NIIP). A closer look at the data actually suggests that the NIIP is probably not measured correctly and that the observed returns on German investment abroad have remained above most domestic returns.

Strategic Voting in Proportional Systems: The Case of Finland. IHS Political Science Series No. 138, September 2014

Voters try to avoid wasting their votes even in PR systems. In this paper we make a case that this type of strategic voting can be observed and predicted even in PR systems. Contrary to the literature we do not see weak institutional incentive structures as indicative of a hopeless endeavor for studying strategic voting. The crucial question for strategic voting is how institutional incentives constrain an individual’s decision-making process. Based on expected utility maximization we put forward a micro-logic of an individual’s expectation formation process driven by institutional and dispositional incentives. All well-known institutional incentives to vote strategically that get channelled through the district magnitude are moderated by dispositional factors in order to become relevant for voting decisions. Employing data from Finland – because of its electoral system a particularly hard testing ground - we find considerable evidence for observable implications of our theory.