nep-cis New Economics Papers
on Confederation of Independent States
Issue of 2024‒04‒08
thirteen papers chosen by

  1. Institutionelle Folgen einer EU-Erweiterung: Auswirkungen und Reformvorschläge für Kommission, Rat und Parlament By Busch, Berthold; Sommer, Julian; Sultan, Samina
  2. Medium-term Macroeconomic Effects of Russia’s War in Ukraine and How it Affects Energy Security and Global Emission Targets By Hugo Rojas-Romagosa
  3. Monthly Report No. 9/2023 By Vasily Astrov; Vladislav L. Inozemtsev; Ambre Maucorps; Roman Römisch
  4. Rallying around the EU flag: Russia's invasion of Ukraine and attitudes toward European integration By Steiner, Nils D.; Berlinschi, Ruxanda; Farvaque, Etienne; Fidrmuc, Jan; Harms, Philipp; Mihailov, Alexander; Neugart, Michael; Stanek, Piotr
  5. Kyrgyz Republic: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Kyrgyz Republic By International Monetary Fund
  6. Turkey: An emerging global arms exporter. Growing competitiveness and strategic recalibration of the Turkish defence industry By Bastian, Jens
  7. Gender inequality in the labor market: the case of Morocco By Otaviano Canuto; Hajar Kabbach
  8. Geostrategie von rechts außen: Wie sich EU-Gegner und Rechtsaußenparteien außen- und sicherheitspolitisch positionieren By Becker, Max; von Ondarza, Nicolai
  9. St. Lucia: 2023 Article IV Consultation-Press Release; and Staff Report By International Monetary Fund
  10. Volatility Spillover between Oil Prices and Main Exchange Rates: Evidence from a DCC-GARCH-Connectedness Approach By Leila Ben Salem; Montassar Zayati; Ridha Nouira; Christophe Rault
  11. Oil Market Efficiency, Quantity of Information, and Oil Market Turbulence By Marc Gronwald; Sania Wadud; Kingsley Dogah
  12. The Consequences of Falling Behind the Curve: Inflation Shocks and Policy Delays Under Rational and Behavioral Expectations By Ms. Mai Hakamada; Carl E. Walsh
  13. Die Türkei auf dem Weg zum globalen Rüstungsexporteur By Bastian, Jens

  1. By: Busch, Berthold; Sommer, Julian; Sultan, Samina
    Abstract: Spätestens seit dem russischen Angriffskrieg in der Ukraine und dem Beschluss, Beitrittsgespräche mit dem Land zu eröffnen, hat das Thema Erweiterung für die Europäische Union (EU) wieder deutlich an Bedeutung gewonnen. Die strategische Dimension einer Erweiterung tritt durch die geopolitische Lage in den Vordergrund. Durch eine Erweiterung könnte zudem der Binnenmarkt an Attraktivität gewinnen. Einhergehen mit der Erweiterungsdebatte muss aber stets auch die Frage nach der Erweiterungsfähigkeit der EU - und damit nach Reformen. Im Raum steht die Aufnahme von bis zu acht Ländern - neben der Ukraine wären dies Albanien, Bosnien Herzegowina, Georgien, Montenegro, Nordmazedonien, Serbien sowie die Republik Moldau. Dies hätte Veränderungen auf verschiedenen Ebenen zur Konsequenz. Dieser Report diskutiert die Folgen für die drei zentralen Institutionen der EU - Kommission, Rat und Parlament -und macht Reformvorschläge, um deren Arbeits- und Handlungsfähigkeit zu erhalten. Die Europäische Kommission würde gemäß der derzeitigen Regelung auf 35 Mitglieder wachsen. Es erscheint unwahrscheinlich, dass die Mitgliedstaaten auf ihr Recht, ein Kommissionsmitglied zu stellen, ganz oder zeitweise im Zuge einer Rotation verzichten werden. Daher erscheint eine stärkere Hierarchisierung der Kommission als die beste Option. Der Rat der EU entscheidet in den meisten Bereichen mit qualifizierter Mehrheit. Durch eine Erweiterung auf eine EU-35 könnte sich die wirtschaftliche Ausrichtung des Rates hin zu weniger wirtschaftlicher Freiheit verschieben. Dadurch würde es dem eher liberalen Block, zu dem auch Deutschland gehört, schwerer fallen, per Sperrminorität Entscheidungen zu verhindern oder per Mehrheitsbeschluss Entscheidungen durchzusetzen.
    Abstract: At the latest since the Russian war of aggression in Ukraine and the decision to open accession talks with the country, the topic of enlargement has once again become much more important for the European Union (EU). The strategic dimension of enlargement has come to the fore due to the geopolitical situation. Enlargement could also help to make the internal market more attractive. However, the enlargement debate must always go hand in hand with the question of the EU's capacity for enlargement - and thus for reform. The admission of up to eight countries is under discussion - in addition to Ukraine, these would be Albania, Bosnia and Herzegovina, Georgia, Montenegro, North Macedonia, Serbia and the Republic of Moldova. This would result in changes at various levels. This report discusses the consequences for the three central institutions of the EU - Commission, Council and Parliament - and puts forth recommendations for reforms to ensure their continued efficacy. With the current framework, the European Commission would expand to encompass 35 members. IGiven the unlikelihood of member states relinquishing their right to appoint a Commissioner, a more hierarchical structure within the Commission appears to be the most viable solution. The Council of the EU predominantly operates on a system of qualified majority voting in most domains. Enlargement to an EU-35 could shift the economic focus of the Council towards less economic freedom. This would make it more difficult for the more liberal bloc, to which Germany also belongs, to prevent decisions by blocking minority or to enforce decisions by majority vote.
    JEL: D02 F68 O52
    Date: 2024
  2. By: Hugo Rojas-Romagosa
    Abstract: Russia’s war in Ukraine has disrupted the supply of natural gas for many European countries, triggering an energy crisis and affecting energy security. We simulate the medium-term effects of these trade disruptions and find that most European countries have limited GDP losses but those more dependent on Russian natural gas face moderate losses. European fossil fuel consumption and emissions are reduced and after accounting for the war impacts, achieving Europe’s emission targets becomes slightly less costly. In terms of energy security, the war eliminates European energy dependency from Russian imports, but most of the natural gas and oil imports will be substituted by other suppliers. We also find that constructing a new Russian pipeline to China does not provide significant macroeconomic benefits to either country.
    Keywords: Energy supply; energy security; trade disruptions; greenhouse gas emissions; computable general equilibrium
    Date: 2024–03–01
  3. By: Vasily Astrov (The Vienna Institute for International Economic Studies, wiiw); Vladislav L. Inozemtsev; Ambre Maucorps (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: Chart of the Month Russian migration wave reaches Europe by Vasily Astrov Opinion Corner How should the EU treat arriving Russian migrants? by Vladislav Inozemtsev Since the start of the war in Ukraine, no fewer than 1 million people have left Russia – arguably the biggest wave of ethnic Russian emigration since the 1920s. European governments should treat this as an opportunity and should welcome most Russian migrants by offering them residence and work permits. Russians may constitute the most affluent and prosperous European diaspora, and that could benefit the host economies. The role of manufacturing in regional economic growth and convergence in the EU by Roman Römisch This article focuses on the role of the manufacturing sector in regional economic development in the EU. Its findings indicate that the development of the manufacturing sector has positive growth effects, independent of a region’s degree of urbanisation. This suggests that policies focused on industrialisation could foster regional growth and the convergence of less-developed regions. However, there are many obstacles to such policies. European integration? How borders (still) matter for the development of EU regions by Ambre Maucorps The ambition of the EU to become ‘an ever closer union among the peoples of Europe’ has been the main rationale for its far-reaching policy action towards economic, social and territorial cohesion. Yet EU border regions lag behind their so-called inner peers economically and socially, pointing up the persistent negative impact of country borders on regional growth, despite European integration efforts. Whereas in Western Europe this gap has generally been narrowing, in most of EU-CEE it is continuing to widen, sometimes significantly. This has important implications not only for the cross-border consolidation of the EU single market, but also for the EU enlargement process. Monthly and quarterly statistics for Central, East and Southeast Europe
    Keywords: Russian migration, first residence permits, remittances, labour market integration, political migrants, regional economic growth, convergence, manufacturing, mean logarithmic deviation index, border regions, inner regions, regional convergence
    Date: 2023–09
  4. By: Steiner, Nils D.; Berlinschi, Ruxanda; Farvaque, Etienne; Fidrmuc, Jan; Harms, Philipp; Mihailov, Alexander; Neugart, Michael; Stanek, Piotr
    Date: 2023
  5. By: International Monetary Fund
    Abstract: The new trade and labor migration patterns that emerged since the start of Russia’s war in Ukraine have provided an unexpected boost to growth. Tax revenue increased considerably since 2021, public debt declined below 50 percent of GDP by end-2022, and inflation while still elevated has decelerated into the single digits in 2023. The authorities should take advantage of these generally favorable macroeconomic conditions to strengthen their policy framework and advance structural reforms on multiple fronts to build resilience, support higher and more inclusive growth, and mitigate the risks from heightened global uncertainty.
    Date: 2024–03–04
  6. By: Bastian, Jens
    Abstract: Over the past decade, Turkey's defence industry has undergone rapid development and its products have repeatedly proved their military capability. The Bayraktar-TB2 drone - a product of the Turkish manufacturer Baykar - is exported to numerous countries. In Ukraine, it is being used extensively against the Russian army. In Nagorno-Karabakh, it turned out to be a game changer in favour of Azerbaijan in the conflict with Armenia. And it has left its mark on the battlefields of Syria as well as in northern Iraq and Libya. But the TB2 drone is only the most visible sign of what is a new era for Turkey's defence policy. The innovation ecosystem that has emerged in the Turkish military-industrial complex is intended to position the country as a 'teknonation'. For Turkey's NATO partners, this recalibration presents strategic challenges for further cooperation with Ankara.
    Keywords: Turkey's defence industry, Bayraktar-TB2 drone, NATO, Nagorno-Karabakh
    Date: 2024
  7. By: Otaviano Canuto; Hajar Kabbach
    Abstract: Gender disparities in the labor market persist as a serious challenge, resulting in lower participation rates for women than men. This gender gap in labor force participation varies considerably across regions, with female participation rates consistently lagging men. After some progress during the last few decades, the multiple crises faced by the global economy in recent times – pandemic, the war in Ukraine, rising risks of climate change, and slowing growth after high inflation – have meant a setback to progress in reforms toward the empowerment of women in labor markets. We approach here how Morocco can strengthen productivity and economic growth by pursuing reforms to reduce gender inequality of opportunities.
    Date: 2023–03
  8. By: Becker, Max; von Ondarza, Nicolai
    Abstract: Rechtsaußenparteien gewinnen europaweit an Zustimmung. In immer mehr Staaten der Europäischen Union (EU) sind sie an nationalen Regierungen beteiligt, und für die Wahlen zum Europäischen Parlament (EP) im Juni 2024 wird erwartet, dass sie weitere Zuwächse erreichen. Angesichts der zunehmenden Mitentscheidungsrolle dieser Parteien ist es für die außen- und sicherheitspolitisch herausgeforderte EU wichtig, wie sie sich in diesem Politikfeld positionieren. Ein genauerer Blick zeigt, dass die geostrategische Positionierung sehr unterschiedlich ausfällt und zur Fragmentierung des Rechtsaußenspektrums beiträgt. Die Positionen reichen von transatlantischer Orientierung und deutlicher Unterstützung für die angegriffene Ukraine, wie sie die Europäischen Konservativen und Reformer (EKR) vertreten, bis hin zu fundamentaler Opposition mit antiwestlicher Ausrichtung unter Teilen der rechtspopulistisch bis rechtsextremen Parteien der Fraktion Identität und Demokratie (ID). Bedeutend für die Handlungsfähigkeit und Kohärenz der EU-Außen- und -Sicherheitspolitik werden die nationalen Wahlen und Koalitionsentscheidungen sein.
    Keywords: Europäische Union, EU, Europäisches Parlament, Europaparlament, Europawahlen 2024, Außen- und Sicherheitspolitk, europäische Parteien, Rechtsaußenparteien, nationalkonservative Parteien, rechtspopulistische Parteien, rechtsextreme Parteien, Fraktionen im Europäischen Parlament, Europäische Konservative und Reformer, EKR, Identität und Demokratie, ID, Fidesz, Beziehungen EU-Russland, Beziehungen EU-China, Beziehungen EU-USA/Nato, EU-Erweiterung, GASP, GSVP, geostrategische Positionierung rechter Parteien, Fragmentierung rechter Parteien, Abstimmungsverhalten
    Date: 2024
  9. By: International Monetary Fund
    Abstract: The economy has rebounded strongly after the Covid-19 pandemic and the commodity import price shock due to Russia’s war in Ukraine; output is currently near the pre-pandemic level. Higher government revenue has narrowed the fiscal deficit, but public debt is much higher than before the pandemic. The banking sector has adequate liquidity and is profitable, but NPLs are elevated, and additional provisioning is required. Rapid credit growth in the large credit union sector is a concern, and several institutions require additional capital.
    Date: 2024–03–05
  10. By: Leila Ben Salem; Montassar Zayati; Ridha Nouira; Christophe Rault
    Abstract: This paper investigates the co-movements of oil prices and the exchange rates of 10 top oil-importing and oil-exporting countries. Firstly, we estimated the total static spillover index based on vector autoregressive (VAR) models. Secondly, we adopted the recent DCC-GARCH-CONNECTEDNESS approach proposed by Gabauer (2020) to conduct a time-varying analysis that investigates the directionally dynamic connectedness among WTI and Shanghai crude oil futures and currency markets. We explored contagion spillover volatility by focusing on a sample of major oil-exporting and oil-importing countries using daily data from 4 March 2018 to 25 August 2023. We analysed this relationship during four phases: the entire sample; before COVID-19; during COVID-19; and during the Russian‒Ukrainian war. Our results confirm the persistence of volatility for the series studied, thereby justifying the use of the dynamic connectedness approach. Our findings also reveal strong evidence of volatility transmission between oil prices and exchange-rate markets. However, the COVID-19 pandemic and the Russian‒Ukrainian war have altered this link. The connectedness between the two markets (petrol and exchange) was stronger at the beginning of the crisis period and then gradually depreciated in value over time. Our findings reveal that exchange rates for both oil-exporting and oil-importing countries are more sensitive to oil price shocks during crises than in normal periods. This suggests that volatility contagion between these two markets continues to exist, thus emphasising the role of oil price shocks as net transmitters across the network during extreme scenarios.
    Keywords: Shanghai futures, WTI, exchange rates, DCC-GARCH-CONNECTEDNESS, Covid-19, Russian-Ukraine war
    JEL: C50 Q40 Q43
    Date: 2024
  11. By: Marc Gronwald; Sania Wadud; Kingsley Dogah
    Abstract: This paper analyses the informational efficiency of the WTI crude oil markets using a recently proposed quantitative measure for market inefficiency. The procedure measures the extent to which observed oil price behaviour deviates from the Random Walk benchmark which represents an efficient market. The key findings are, first, that crude oil market inefficiency varies over time. Second, abrupt increases in inefficiency occur during extreme episodes such as the price downturns witnessed in 2008, 2014, and early 2020, as well as the begin of the Ukraine war in 2022. Third, the paper puts forward the interpretation of oil market inefficiency as oil market turbulence. This occurs when the quantity of information the market has to process is exceptionally high. Fourth, the paper demonstrates that oil market turbulence (or the drivers behind it) have negative macroeconomic consequences.
    Keywords: crude oil markets, efficient market hypothesis, quantity of information, fractional integration
    JEL: C22 E30 G14 Q02 Q31
    Date: 2024
  12. By: Ms. Mai Hakamada; Carl E. Walsh
    Abstract: Central banks in major industrialized economies were slow to react to the surge in inflation that began in early 2021. The proximate causes of this surge were the supply chain disruptions associated with the easing of COVID restrictions, fiscal policies designed to cushion the economic impact of COVID, and the impact on commodity prices and supply chains of the war in Ukraine. We investigate the consequences of policy delay in responding to inflation shocks. First, using a simple three-period model, we show how policy delay worsens inflation outcomes, but can mitigate or even reverse the output decline that occurs when policy responds without delay. Then, using a calibrated new Keynesian framework and two measures of loss that incorporate a “balanced approach” to weigh inflation and the output gap, we find that loss is monotonically increasing in the length of the delay. Loss is reduced if policy, when it does react, is more aggressive. To investigate whether these results are sensitive to the assumption of rational expectations, we consider cognitive discounting as an alternative assumption about expectations. With cognitive discounting, forward guidance is less powerful and results in a reduction in the costs of delay. Under either assumption about expectations, the costs of a short delay can be eliminated by adopting a less inertial policy rule and a more aggressive response to inflation.
    Keywords: monetary policy; inflation policy delay; behavioral expectations; falling behind the curve
    Date: 2024–03–01
  13. By: Bastian, Jens
    Abstract: Die türkische Rüstungsindustrie hat sich in den letzten zehn Jahren rasant entwickelt und ihre Produkte haben dabei wiederholt ihre militärische Einsatzfähigkeit unter Beweis gestellt. Bayraktar-TB2-Drohnen des türkischen Unternehmens Baykar werden in zahlreiche Länder exportiert. Die ukrainischen Streitkräfte haben sie nach der russischen Invasion genutzt, die aserbaidschanischen im Konflikt mit Armenien in Berg-Karabach verwendet und auch in Syrien, im Nordirak und in Libyen kommt sie zum Einsatz. Die Drohne ist aber nur das sichtbarste Zeichen, dass in der türkischen Rüstungspolitik eine neue Ära angebrochen ist. Die Verteidigungsindustrie und das um sie herum entstandene Innovations-Öko-System sollen die Türkei als "Tekno-Nation" positionieren. Für die Nato-Partner ergeben sich in der Zusammenarbeit mit Ankara damit neue sicherheitspolitische Herausforderungen. Blockierte Lieferungen von Kampfflugzeugen an Ankara, sei es durch Washington oder Berlin, könnten die strategische Neuausrichtung der türkischen Rüstungspolitik noch weiter verstärken.
    Keywords: Türkei, Rüstung, Rüstungsindustrie, Rüstungspolitik, Drohnen, Bayraktar, TB2-Drohnensysteme, Atak, KAAN, Altay, Anka-3, Savunma Sanayii Baðskanl¸æg¸, SSB, Turkish Aerospace Industries, TUSAðS, Baykar, Roketsan, STM, Aselsan, TCG Anadolu, Eurofighter Typhoon, F-16-Kampfflugzeuge, Waffenembargo
    Date: 2024

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