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on European Economics |
| By: | Gerlach, Stefan |
| Abstract: | This Paper discusses interest rate setting by the ECB between 1999 and 2004. I develop from the Monthly Bulletins quantitative indicators of the Governing Council’s assessment of inflation, economic activity, and M3 growth, and investigate their impact on its interest rate decisions. I also estimate reaction functions with ordered probit techniques, using the Monthly Bulletins to guide the choice of variables for the analysis. The results show that the ECB reacts strongly to economic sentiment indicators as measures of the state of the real economy. Furthermore, I find statistically significant reactions to inflation and M3 growth. |
| Keywords: | ECB; empirical reaction functions; ordered probit |
| JEL: | E43 E52 E58 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4775&r=eec |
| By: | Pagano, Marco; von Thadden, Ernst-Ludwig |
| Abstract: | In this Paper, we document how in the wake of monetary unification the markets for euro area sovereign and private-sector bonds have become increasingly integrated. Issuers and investors alike have come to regard the euro area bond market as a single one. Primary and secondary bond markets have become increasingly integrated on a pan-European scale. Issuance of corporate bonds has taken off on an unprecedented scale in continental Europe. In the process, both investors and issuers have reaped the considerable benefits afforded by greater competition in the underwriting of private bonds and auctioning of public ones, and by the greater liquidity of secondary markets. Bond yields have converged dramatically in the transition to EMU. The persistence of small and variable yield differentials for sovereign debt under EMU indicates that euro area bonds are still not perfect substitutes. However, to a large extent this does not reflect persistent market segmentation but rather small differentials in fundamental risk. Liquidity differences play at most a minor role, and this role appears to arise partly from their interaction with fundamental risk. The challenges still lying ahead are numerous. They include the unbalance between the German-dominated futures and the underlying cash market; the vulnerability of the cash markets’ prices to free-riding and manipulation by large financial institutions; the possibility of joint bond issuance by euro area countries; the integration of clearing and settlement systems in the euro area bond market, and the participation of new accession countries’ issuers to this market. |
| Keywords: | bond market; bond yield differential; euro; financial integration |
| JEL: | G15 G32 |
| Date: | 2004–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:4779&r=eec |
| By: | Goergen,Marc; Martynova,Martina; Renneboog,Luc (Tilburg University, Center for Economic Research) |
| Abstract: | This paper contributes to the research on corporate governance by predicting the effects of European takeover regulation. In particular, we investigate whether the recent reforms of takeover regulation in Europe are leading to a harmonization of the national legislations. With the help of 150 corporate governance lawyers from 30 European countries, we collected the main changes in takeover regulation. We assess whether a process of convergence towards the Anglo-(American) corporate governance system has been started and we find that this is the case. We make predictions as to the consequences of the reforms for the ownership and control. However, we find that, while in some countries the adoption of a unified takeover code may result in dispersed ownership, in others it may further consolidate the blockholder-based system. |
| JEL: | G3 G34 G38 K2 K22 K40 G32 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:200563&r=eec |
| By: | David-Jan Jansen; Jakob de Haan |
| Abstract: | This paper studies the effects of verbal interventions by European cen-tral bankers on high-frequency euro-dollar exchange rates. We find that ECB verbal interventions have had only small and short-lived effects. Ver- bal interventions which are reported in news report headlines are more likely to be successful, whereas verbal interventions on days with releases of macroeconomic data are less successful. There is no difference in the effects of comments by members of the ECB Executive Board and presi- dents of national central banks. |
| Keywords: | verbal intervention; high-frequency exchange rates; European Central Bank; sign test |
| JEL: | E58 F31 C14 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:033&r=eec |
| By: | Wilko Bolt; David B. Humphrey |
| Abstract: | This paper discusses various theoretic concepts which play a role in assessing the public benefits ofTarget, the large value RTGS payment network operated by the Eurosystem. These concepts touch upon natural monopoly, network externalities, competition and contestability, as well as economies of scale and scope. Based on empirical results for the Federal Reserve's payment system (Fedwire), it is argued that if Target decided to standardize its operating platforms and consolidate its processing sites into one or a few centers, it too could realize strong scale economy benefits and lower unit costs. The main thrust of the paper concerns natural monopoly and the possibility of lowering unit payment processing cost via economies of scale. The existence of a natural monopoly provides a rationale for a temporary partial or full subsidy in order for Target to achieve the `most efficient scale' or apply the most efficient technology to lower unit costs. Such a subsidy could be implemented through temporary 'penetration' pricing (i.e., pricing at less than full current cost). When the lower costs are realized, the subsidy would be removed and full cost pricing implemented. Once users face the full costs of their payment decisions, they are better able to match benefits with actual costs and implement a more efficient allocation of payment resources than occurs today on Target. |
| Keywords: | public good; natural monopoly; most efficient scale; partial subsidy |
| JEL: | G20 H41 L10 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:036&r=eec |
| By: | Bodo Herzog |
| Abstract: | The European Fiscal Framework and the Stability and Growth Pact (SGP) have had great significance since the completion of the European Monetary Union (EMU) in 1999. The current enforcement and credibility problems, and discussion about reforming the SGP, as well as the failure to impose sanctions and early warnings against states in breach of the Pact, have introduced a new subject for economic research. One of the most surprising observations in recent years is that the larger countries in the EMU have more problems with the budget thresholds in the SGP than the smaller countries. To explain this `stylized fact\' we solve a model of `ratio- nal\' delay in consolidation and relate it to several economic and political variables. The model shows that larger governments tend to prefer slower consolidation because they are not concerned about the risk of breaching the SGP and face less output volatility. Moreover we solve in the theoretical model one unexplored phenomenon in empirical macroeconomics: why does larger government size imply less macroeconomic volatility? We demonstrate this approach and its results with current empirical data on the performance of the EMU and the SGP. |
| Keywords: | Monetary Union, Fiscal Policy, Stability and Growth Pact |
| JEL: | E60 F30 F33 |
| Date: | 2005–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:40&r=eec |
| By: | Michael Carlberg |
| Abstract: | This paper studies the international coordination of monetary policies in the world economy. It carefully discusses the process of policy competition and the structure of policy cooperation. As to policy competition, the focus is on monetary competition between Europe and America. Similarly, as to policy cooperation, the focus is on monetary cooperation between Europe and America. The spillover effects of monetary policy are negative. The policy targets are price stability and full employment. |
| Keywords: | European Monetary Union, International Policy Coordination, Monetary Policy |
| JEL: | E52 F33 F41 F42 |
| Date: | 2005–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:41&r=eec |
| By: | Simon Deakin |
| Abstract: | Amartya Sen’s capability approach has the potential to counter neoliberal critiques of social welfare systems by overcoming the false opposition between security and flexibility. In particular, it can be used to promote the idea of social rights as the foundation of active participation by individuals in the labour market. This idea is starting to be reflected in the case law of the European Court of Justice concerning free movement of persons but its use in the European employment strategy is so far more limited, thanks to the continuing influence of neoliberal ‘activation policies’. |
| Keywords: | capabilities, welfare state, social rights, European Union law |
| JEL: | J38 K31 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp303&r=eec |
| By: | Maria Paula Fontoura; Nuno Crespo |
| Abstract: | The Central and Eastern European Countries (CEECs) have gone through a dramatic process of industrial restructuring in which the Europe Agreements have played a major role. Using detailed statistics, we analyse the transformation of CEECs’ export structures and whether it led to structural convergence with the remaining EU members. We also analyse structural transformation within sectors in terms of quality ranges. The results show that, in general terms, CEECs have converged both at inter and intra-sectoral levels towards pre-existing EU members. We discuss whether further restructuring and relocation of CEECs’ industrial patterns are probable in the aftermath of EU membership. |
| Keywords: | Central and Eastern European Countries; Europe Agreements; Export Structure; Structural Change; Structural Convergence. |
| JEL: | F10 F15 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp152004&r=eec |
| By: | Alberto Alesina; Edward L. Glaeser; Bruce Sacerdote |
| Abstract: | Americans average 25.1 working hours per person in working age per week, but the Germans average 18.6 hours. The average American works 46.2 weeks per year, while the French average 40 weeks per year. Why do western Europeans work so much less than Americans? Recent work argues that these differences result from higher European tax rates, but the vast empirical labor supply literature suggests that tax rates can explain only a small amount of the differences in hours between the U.S. and Europe. Another popular view is that these differences are explained by long-standing European "culture," but Europeans worked more than Americans as late as the 1960s. In this paper, we argue that European labor market regulations, advocated by unions in declining European industries who argued "work less, work all" explain the bulk of the difference between the U.S. and Europe. These policies do not seem to have increased employment, but they may have had a more society-wide influence on leisure patterns because of a social multiplier where the returns to leisure increase as more people are taking longer vacations. |
| JEL: | J3 E0 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11278&r=eec |
| By: | Raquel Fonseca (CSEF, University of Salerno); Thepthida Sopraseuth (EPEE, University of Evry and CEPREMAP) |
| Abstract: | This paper uses a calibrated life cycle model to quantify the distributional effects of Social Security reforms. We focus only on two countries: Italy and France because they adopted two different strategies to cope with aging. While France marginally modified its defined pension plan, Italy switched from a defined pension plan to a contributive system. We find both reforms redistributes welfare unevenly: high skilled workers are the primary winners of the French reform and self employed individuals, especially unskilled workers, are the losers under the new Italian Social Security arrangement. |
| Date: | 2005–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:138&r=eec |
| By: | Simon Lee (Institute for Fiscal Studies and University College London); Ralf A. Wilke |
| Abstract: | Economic theory suggests that an extension of the maximum length of entitlement for unemployment benefits increases the duration of unemployment. Empirical results for the reform of the unemployment compensation system in Germany during the 1980s are less clear. The analysis in this paper is motivated by the controversial empirical findings and by recent developments in econometrics for partial identification. We use extensive administrative data with the drawback that registered unemployment is not directly observed. For this reason we bound the reform effect on unemployment duration over different definitions of unemployment. By exploiting the richness of the data we use a nonparametric approach without imposing critical parametric model assumptions. We identify a systematic increase in unemployment duration in response to the reform in samples that amount to less than 15% of the unemployment spells for the treatment group. |
| Keywords: | unemployment duration, definition of unemployment, nonparametric |
| JEL: | C14 C41 J64 J65 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:wp02/05&r=eec |
| By: | Giacomo De Giorgi |
| Abstract: | The New Deal For Young People is the major welfare-to-work program in the UK. It is a mandatory multistage policy targeted at the 18-24 year old unemployed. This paper investigates the effectiveness of the program in terms of enhancing the (re)employment probability of participant males. I exploit the eligibility rule to identify a suitable counterfactual relying upon a simple regression discontinuity design. By exploiting such a discontinuity I am able to non parametrically identify (Hahn et al., 2001) a local average treatment effect (LATE). While relying upon the non parametric local linear regression method I am able to push forward such a parameter to a "global" dimension, implicitly adding parametric structure. No evidence of possible general equilibrium as well as substitution effects is found by a co- hort specific approach (before and after the program). The main result is that the program enhances employability by about 6-7%. |
| Keywords: | Labour market policy evaluation, regression discontinuity, non parametric |
| JEL: | J18 J23 J38 C14 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:05/08&r=eec |
| By: | Antonio Afonso; Carla Scaglioni |
| Abstract: | We measure the performance of public spending in Italian regions regarding the provision of public services, by constructing a so-called total regional performance indicator for strategic sectors such as general administration, energy, water and sewage, solid waste, and transports for 2001. This composite indicator is then the output measure selected to assess expenditure efficiency for the Italian regions, using the non-parametric DEA approach. The computation of efficiency scores allows to rank the regions and to detect some room for improvement in terms of efficiency gains at the regional level. |
| Keywords: | technical efficiency; DEA; regional expenditure; Italy. |
| JEL: | C14 H42 H72 R50 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp22005&r=eec |
| By: | Santiago Budria (University of Madeira & CEEAplA) |
| Abstract: | This article uses data from the 1998 European Union Household Panel to study economic inequality in Spain. It reports data on the Spanish distributions of income, labor income, and capital income, and on related features of inequality, such as age, employment status, educational attainment, and marital status. It also reports data on the income mobility of Spanish households. We find that income, earnings, and, very especially, capital income are very unequally in Spain. |
| Keywords: | Inequality, Income distribution, Labour earnings distribution, Capital income distribution |
| JEL: | J |
| Date: | 2005–05–03 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0505001&r=eec |
| By: | Talat Mahmood; Sara Geerdes; Klaus Schömann |
| Abstract: | This paper examines the chances for immigrants on the European job market. The data represents a one percent sample of the German population of the Micro census for the years 1998, 2000 and 2003 and Eurostat Labour Force Survey data. The issue addressed is how the academic and occupational level of education (participation in education), labour participation, professional status, unemployment rate, income, female labour participation and atypical occupation (structure of employment) of the foreigners differ from the native population. We find that foreigners in EU countries are more likely to be unemployed and are often in lower segments of the labour market. European comparisons of the labour market situation shows that the acknowledgment of foreign degrees, discrimination, supporting measures and the labour market policy have to be taken into account, as well as the (country-specific) human capital, language skills and the immigrants’ participation in education. <br> <br> <i>ZUSAMMENFASSUNG - (Arbeitsplatzangebot in Europa - Chancen für Immigranten?) <br> Mithilfe des Mikrozensus 1998, 2000 und 2000 und dem Eurostat Labour Force Survey werden die Möglichkeiten für Immigranten auf dem europäischen Arbeitsmarkt untersucht. Es wird das akademische und berufliche Ausbildungsniveau (Bildungsbeteiligung), die Erwerbsbeteiligung, die Stellung im Beruf, die Arbeitslosenrate, das Einkommen, die Frauenerwerbsquote und atypische Beschäftigung (Beschäftigungsstruktur) von Einheimischen und Migranten verglichen. Es zeigt sich, dass EU Ausländer eher arbeitslos sind und sich eher in niedrigeren Segmenten des Arbeitsmarkts befinden. Der europäische Vergleich der Arbeitsmarktsituation Mithilfe des Mikrozensus 1998, 2000 und 2000 und dem Eurostat Labour Force Survey werden die Möglichkeiten für Immigranten auf dem europäischen Arbeitsmarkt untersucht. Es wird das akademische und berufliche Ausbildungsniveau (Bildungsbeteiligung), die Erwerbsbeteiligung, die Stellung im Beruf, die Arbeitslosenrate, das Einkommen, die Frauenerwerbsquote und atypische Beschäftigung (Beschäftigungsstruktur) von Einheimischen und Migranten verglichen. Es zeigt sich, dass EU Ausländer eher arbeitslos sind und sich eher in niedrigeren Segmenten des Arbeitsmarkts befinden. Der europäische Vergleich der Arbeitsmarktsituation zeigt, dass sowohl die Anerkennung ausländischer Bildungsabschlusse, Diskriminierung, die Hilfsmanahmen und die Arbeitsmarktpolitik als auch das (landesspezifische) Humankapital, Sprachkenntnisse und die Bildungsbeteiligung zu berücksichtigen sind, zeigt, dass sowohl die Anerkennung ausländischer Bildungsabschlüsse, Diskriminierung, die Hilfsmanahmen und die Arbeitsmarktpolitik als auch das (landesspezifische) Humankapital, Sprachkenntnisse und die Bildungsbeteiligung zu berücksichtigen sind.</i> |
| Keywords: | International migration, European job market, Immigrants |
| JEL: | C35 F22 J61 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:wzb:wzebiv:spii2005-07&r=eec |