|
on European Economics |
|
Issue of 2005‒10‒22
fifty-four papers chosen by Giuseppe Marotta Universita di Modena e Reggio Emilia |
| By: | Hamid Faruqee |
| Abstract: | This paper examines the impact of European Economic and Monetary Union (EMU) on trade within the euro area. Using panel data for 22 industrial countries, the analysis estimates the effect of the euro's arrival on area-wide trade compared to bilateral trade flows between other industrial countries. Controlling for other influences according to the "gravity" model of trade, the panel analysis employs cointegration techniques to obtain reliable point estimates of EMU trade effects. Cross-country differences with respect to EMU trade gains and underlying factors accounting for these differences are also further explored. |
| Keywords: | Trade , European Economic and Monetary Union , Bilateral trade , Euro area , |
| Date: | 2004–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/154&r=eec |
| By: | Philipp Hartmann; Stefan Straetmans; Casper G. De Vries |
| Abstract: | This paper derives indicators of the severity and structure of banking system risk from asymptotic interdependencies between banks’ equity prices. We use new tools available from multivariate extreme value theory to estimate individual banks’ exposure to each other (“contagion risk”) and to systematic risk. Moreover, by applying structural break tests to those measures we study whether capital markets indicate changes in the importance of systemic risk over time. Using data for the United States and the euro area, we can also compare banking system stability between the two largest economies in the world. Finally, for Europe we assess the relative importance of cross-border bank spillovers as compared to domestic bank spillovers. The results suggest, inter alia, that systemic risk in the US is higher than in the euro area, mainly as cross-border risks are still relatively mild in Europe. On both sides of the Atlantic systemic risk has increased during the 1990s. |
| JEL: | G12 G28 G29 G12 C49 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:11698&r=eec |
| By: | Marcello M. Estevão |
| Abstract: | Euro-area real wages have decelerated sharply in the last 20 years, but this has not yet translated into visibly lower unemployment or faster growth. Weak output growth after such a cost shock is somewhat puzzling and has led some to question the benefits of wage moderation. By isolating structural from cyclical factors in a panel of industrial countries, I show that structurally slower real wage growth, that is, "wage moderation," does raise output growth and lower unemployment rates. However, I show that the impact on both variables depends crucially on product market regulation: weaker competition and barriers to entry mute the growth effects of structural real wage changes by allowing incumbent firms to appropriate larger rents. In this context, overly regulated product markets in the euro area are undermining the effects of labor market reforms on output and employment. |
| Date: | 2005–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/191&r=eec |
| By: | Marcello M. Estevão |
| Abstract: | Slow productivity growth has plagued the euro area since the mid-1990s. That is particularly striking in view of the large productivity gains in the United States during the same period. This paper shows that the deceleration in labor productivity in the euro area was caused by structural changes in wage formation that have affected the relative price of labor, increased the labor intensity of growth and, thus, reduced the rate of capital deepening. Technological shocks seem to have played a minor role in explaining slower productivity growth in the euro area. In addition, a surge in capital deepening and, mainly, TFP growth in key service industries in the United States explain a large part of the productivity growth gap between the two regions in the second half of the 1990s. |
| Keywords: | Economic growth , Euro Area , Productivity , Labor markets , |
| Date: | 2004–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/200&r=eec |
| By: | Jacques Ziller |
| Abstract: | What’s New in European Administrative Law? Transcription of the Statements and Discussions of the Round Table held at the EUI on10 December 2004 : Jacques Ziller, Foreword; Edoardo Chiti, The Relationship between National Administrative Law and European Administrative Law in Administrative Procedures ; Diana-Urania Galetta, The Obligation for National Administrative Bodies to Review their Final Administrative Decisions ; Jean Bernard Auby, A Physionomy of European Judicial Review of Administration (in French); Karl-Peter Sommermann, Europeanisation and Transformation of Administrative Justice in Europe.Européanisation et transformation de la justice administrative en Europe (in French); Paul Craig, Process Rights in Adjudication and Rulemaking: Legal and Political ; Susana de la Sierra, The Constitutional Bases of European Administrative Law; Loïc Azoulay, Broadening and Elevation the Scope of European Administrative Law (in French); Kathrin Maria Scherr, The Concept of Administrative Self-Remedy under EC Law; Joana Mendes Participation Rights |
| Keywords: | Europeanization; implementation; multilevel governance; networks; participation; public administration; fundamental/human rights; judicial review; mutual adjustment; subsidiarity; comitology; decentralisation; institutions; European Agencies |
| Date: | 2005–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0026&r=eec |
| By: | Paolo Guerrieri; Bernardo Maggi; Valentina Meliciani; Pier Carlo Padoan |
| Abstract: | We explore the role of business services in knowledge accumulation and growth and the determinants of knowledge diffusion including the role of distance. A continuous-time model is estimated on several European countries, Japan, and the United States. Policy simulations illustrate the benefits for EU growth of the deepening of the single market, the reduction of regulatory barriers, and the accumulation of technology and human capital. Our results support the basic insights of the Lisbon Agenda. Economic growth in Europe is enhanced to the extent that: trade in services increases, technology accumulation and diffusion increase, regulation becomes both less intensive and more uniform across countries, and human capital accumulation increases in all countries. |
| Keywords: | Economic growth , Europe , Manufacturing , Economic models , Transition economies , |
| Date: | 2005–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/103&r=eec |
| By: | Günter Coenen; Roland Straub |
| Abstract: | In this paper, we revisit the effects of government spending shocks on private consumption within an estimated New-Keynesian DSGE model of the euro area featuring non-Ricardian households. Employing Bayesian inference methods, we show that the presence of non- Ricardian households is in general conducive to raising the level of consumption in response to government spending shocks when compared with the benchmark specification without non-Ricardian households. However, we find that there is only a fairly small chance that government spending shocks crowd in consumption, mainly because the estimated share of non-Ricardian households is relatively low, but also because of the large negative wealth effect induced by the highly persistent nature of government spending shocks. |
| Date: | 2005–08–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/159&r=eec |
| By: | Elisabetta Croci Angelini; Francesco Farina |
| Abstract: | This paper aims at a deeper understanding of the determinants of wage inequality, the most important component of income inequality, in the European countries. We investigate on how wage inequality is affected by government regulation in the labour market and by the redistribution operated by the social protection system, also controlling for the impact of the effect of skillpremium related to technical change. To explain the continuously rising wage inequality in Europe, two regression models of wage inequality are employed each one using a different databases. In the last period, the overall degree of governance of the labour markets does not substantially change, but a different balance between decreasing labour market regulation and increasing redistribution manifest across Europe. While job and wage protection has been eased, income redistribution was strengthened, though its size differs across four clusters of European countries, depending on the majority voting preference for “risk insurance”. Overall, institutional substitution between labour market regulation and income redistribution seems to back the upward trend in wage inequality |
| JEL: | D33 D63 D72 I38 J31 |
| URL: | http://d.repec.org/n?u=RePEc:usi:wpaper:463&r=eec |
| By: | Helge Berger; George Kopits; István P. Székely |
| Abstract: | In recent years, fiscal performance in Central Europe has steadily deteriorated, in contrast to the improvement in the Baltics. This paper explores the determinants of such differences among countries slated for EU accession. Regression estimates suggest that economic and institutional fundamentals do not provide a full explanation. An alternative explanation lies in the political economy of the accession process, and a game-theoretic model illustrates why a country with a stronger bargaining position might have an incentive to deviate from convergence to the Maastricht criteria. The model generates alternative fiscal policy regimes-allowing for regime shifts-depending on country characteristics and EU policies. |
| Keywords: | Fiscal policy , Europe , European Union , European Economic and Monetary Union , Fiscal reforms , Budget deficits , Economic models , |
| Date: | 2004–04–26 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/62&r=eec |
| By: | Tito Boeri |
| Abstract: | This paper evaluates European structural reforms over the last 20 years, in light of economic theory predictions about interactions between labor and product market reforms. Reforms in labor markets occur at higher frequencies than in product market, which are, however, more coherent. These asymmetries can be explained by the nature of political obstacles to reforms in the two domains. Labor market reforms can exploit institutional trade-offs; notably, reforms can trade labor market flexibility with state-provided unemployment insurance and can be applied only to new entrants in the market without affecting the set of regulations applied to existing workers. These two-tier strategies are infeasible in product markets, since incumbent firms can easily drive away new entrants. In product markets, however, it is possible to shift responsibilities to supranational authorities, resisting pressures of national lobbies. |
| Date: | 2005–05–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/97&r=eec |
| By: | Hamid Faruqee |
| Abstract: | Exchange rate pass-through in a set of euro area prices along the pricing chain is examined. Using a vector autoregression (VAR) approach, the empirics analyze the joint time-series behavior of the euro exchange rate and a system of euro-area prices in response to an exchange rate shock. The impulse-response functions from the VAR estimates are used to identify-in a 'new open economy macroeconomics model'-those key behavioral parameters that best replicate the pattern of exchange rate pass-through in the euro area. Area-wide prices are found to display incomplete pass-through, consistent with euro currency-pricing and pricing-to-market behavior. The results are compared to those for the other major industrial economies, and suggest that, as with the United States, "expenditure-switching" effects on the current account still operate but are generally small. |
| Keywords: | Exchange rates , Prices , Economic models , |
| Date: | 2004–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/14&r=eec |
| By: | Guglielmo maria Coporale and Alexandros Kontonikas |
| Abstract: | In this paper, we investigate empirically the relationship between inflation and inflation uncertainty in twelve EMU countries. We estimate a time-varying parameter model with a GARCH specification for the conditional volatility of inflation in order to distinguish between short-run (structural and impulse) and steady-state uncertainty. We then introduce a dummy variable to model the policy regime shift which occurred in 1999 with the introduction of the Euro, and its effects on the links between inflation and inflation uncertainty. We find that the EMU countries have had rather different experiences, and that in the post-Euro period monetary policy might have become less effective in lowering inflation uncertainty, in the sense that a monetary tightening on the part of the ECB might in result in higher uncertainty. This suggests the need for improvements in the ECB’s analytical framework. |
| JEL: | E31 E52 C22 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2005_13&r=eec |
| By: | José M. Arranz (Universidad de Alcalá); Maria A. Davia (Institute for Social and Economic Research); Carlos Garcia-Serrano (Universidad de Alcalá) |
| Abstract: | Using longitudinal data on individual workers from six European countries for the period 1995-2001, the authors analyse empirically the relationship between labour market transitions and wage growth; in particular, whether transitions across states in the labour market have any significant influence on wage dynamics and the size of this influence. In addition to the incidence of unemployment and inactivity spells on wages, the effects of the duration of job interruption, the time elapsed since job ending and the reasons for job interruption are analysed as well. |
| Keywords: | job mobility, wage mobility |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2005-17&r=eec |
| By: | Lusine Lusinyan; Leo Bonato |
| Abstract: | Work absence is an important part of the individual decision on actual working hours. This paper focuses on sickness absence in Europe and develops a stylized model where absence is part of the labor-leisure decision made by workers and the production decision made by profit-maximizing firms, with insurance provisions and labor market institutions affecting the costs of absence. The results from a panel of 18 European countries indicate that absence is increased by generous insurance schemes where employers bear little responsibility for their costs. Shorter working hours reduce absence, but flexible working arrangements are preferable if labor supply erosion is a concern. |
| Keywords: | Sick leave , Europe , Insurance , Labor supply , Data analysis , Data collection , Economic models , |
| Date: | 2004–10–21 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/193&r=eec |
| By: | Thierry Lallemand (Université Libre de Bruxelles, DULBEA and Centre de Comptabilité, Planning et Contrôle); François Rycx (Université Libre de Bruxelles, DULBEA and IZA Bonn) |
| Abstract: | We investigate how the wage distribution differs among small and large establishments in four European countries. Findings show that within-establishment wage dispersion rises with size because large employers have a more diverse workforce. They also suggest that screening and monitoring costs imply a lower sensitivity of wages to ability in larger establishments. Smaller establishments are found to rely more on incentive-based pay mechanisms, particularly in countries with a low trade union coverage rate. Further results indicate that between-establishment wage dispersion decreases with employer size because smaller establishments are technologically more diversified and hence exhibit greater diversity in average workforce skills. |
| Keywords: | wage structure, establishment size, decomposition of wages, Europe |
| JEL: | J21 J31 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1778&r=eec |
| By: | Peter Kugler (University of Basel, Petersplatz 1, CH-4003 Basel,Switzerland); Sylvia Kaufmann (Oesterreichische Nationalbank, Economic Studies Division, Otto-Wagner Platz 3, POB 61, A-1011 Vienna) |
| Abstract: | This paper analyses the role of M3 as an indicator for future inflation and correspondingly for current monetary policy in the euro area. We analyse the short and long run interrelationship between inflation and money growth in an error correction framework taking into account the output gap and short and long term interest rates. We find robust cointegration between money growth and inflation. In the long run, shocks in M3-growth account for 33 percent to 40 percent of the inflation forecast error variance. The effects of output gap and interest rate shocks on inflation are mainly transitory and there forecasting variance shares are negligible for medium term horizons. There is evidence for a second regime prevailing at the end of the seventies and beginning of the eighties which relates to periods of high interest rate and inflation rate levels and decreasing rates in real money growth. Overall, we present firm evidence for a stable dynamic relationship between money growth and inflation which implies that the deviation of the real money growth from its long run average is a good indicator of future inflation acceleration or deceleration. Of course, this finding provides evidence in favour of the recently de-emphasised first pillar of the ECB strategy. According to our results, however, an M3-growth rate of slightly above 5% is compatible with a non-accelerating average rate of inflation of 2%. |
| Date: | 2005–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:103&r=eec |
| By: | Nicholas Apergis; Stephen M. Miller; Alexandros Panethimitakis; Athanasios Vamvakidis |
| Abstract: | This paper evaluates the performance of two alternative policy rules, a forward-looking rule and a spontaneous adjustment rule, under alternative inflation targets, in terms of output losses in a macroeconomic model, using European Union data. The simulations suggest that forward-looking rules contribute to macroeconomic stability and monetary policy credibility, and that a positive inflation target, as opposed to zero inflation, leads to higher and less volatile output. These results are robust to changes in the specification of the model and time period. The same methodology applied to individual countries supports country-specific flexible inflation targeting. |
| Keywords: | Inflation targeting , European Union , Economic growth , |
| Date: | 2005–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/89&r=eec |
| By: | Marie-Ange Moreau |
| Abstract: | One of the most important effects of the employment’s internationalisation is analysed by the movement of firms in Europe called “delocalisation”. In France the debate is stressed on redundancy and loss of jobs. For complex reasons, the environment created by the European market and the globalisation have been forgotten. But it is impossible to research adequate answers if there is no analysis of the multinational firms on the global market and, inside, on the European market. Three ways are presented in this paper: the opportunity to develop/create a territorial social dialogue at a national or regional level, a system of flexicurity and a transnational collective bargaining |
| Date: | 2005–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0025&r=eec |
| By: | Roel M. W. J. Beetsma; Xavier Debrun |
| Abstract: | The paper analyzes some key policy trade-offs involved in the implementation of the Stability and Growth Pact. Greater "procedural" flexibility in the Pact's implementation may improve welfare. Procedural flexibility designates the enforcer's room to apply judgment on underlying policies and to set a consolidation path that does not discourage high-quality measures. Budgetary opaqueness may hinder the qualitative assessment of fiscal policy; therefore, better monitoring and greater transparency would increase the benefits from procedural flexibility. Overall, a simple deficit rule with conditional procedural flexibility can contain excessive deficits, lower unproductive spending, and increase high-quality outlays. |
| Keywords: | Fiscal reforms , Stabilization measures , Stabilization programs , Budget deficits , Structural adjustment , Economic growth , |
| Date: | 2005–03–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/59&r=eec |
| By: | Alain Borghijs; Louis Kuijs |
| Abstract: | Central European accession countries (CECs) are currently considering when to adopt the euro. From the perspective of macroeconomic stabilization, the cost or benefit of giving up a flexible exchange rate depends on the types of asymmetric shocks hitting the economy and the ability of the exchange rate to act as a shock absorber. Economic theory suggests that flexible exchange rates are useful in absorbing asymmetric real shocks but unhelpful in the case of monetary and financial shocks. For five CECs-the Czech Republic, Hungary, Poland, the Slovak Republic, and Slovenia-empirical results on the basis of a structural VAR suggest that in the CECs the exchange rate appears to have served as much or more as an unhelpful propagator of monetary and financial shocks than as a useful absorber of real shocks. |
| Keywords: | Exchange rates , Czech Republic , Hungary , Poland , Slovak Republic , Slovenia , |
| Date: | 2004–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/2&r=eec |
| By: | Carlo Cottarelli; Julio Escolano |
| Abstract: | This paper provides a framework for evaluating the decision to enter a currency area, including the best timing for entry, and uses it to evaluate the assessment of the five tests for euro entry published by the U.K. Treasury in June 2003. The breadth and depth of its assessment is impressive by any standard. Nonetheless, this paper points at some areas that deserve to be explored further in future assessments. Covering these areas would not necessarily have changed the assessment's conclusion, namely that the case for entry is not yet "clear and unambiguous,." but it would have strengthened any conclusion reached. In addition, the paper highlights that in several areas relevant to the entry decision, the margin for uncertainty will remain significant, regardless of any reasonable attempt to reduce it. |
| Keywords: | Monetary policy , United Kingdom , Euro area , |
| Date: | 2004–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/116&r=eec |
| By: | Tomasz Brodzicki (University of Gdansk, Faculty of Economics) |
| Abstract: | In the paper we construct two novel indices of relative centrality – peripheriality in order to test whether location has an impact on medium and long-run gains related to economic integration within the European Union. We utilize two popular econometric approaches – standard cross- sectional growth regressions as well as dynamic panel data models. The study is undertaken for a data panel consisting of 27 developed economies (15 EU Member States and 12 non-member states) within a period 1960 and 1999. Our results indicate at least to some extent that in accordance with the new economic geography models (NEG) relative location within large regional integration arrangement such as the European Union could affect growth effects associated with economic integration. Furthermore, the benefits are found to be asymmetrical between the core and peripheral regions. This results, however, need further empirical investigation as they are found to be sensitive. |
| Keywords: | economic growth, European economic integration, dynamic panel data models, system GMM estimator, new economic geography |
| JEL: | F15 O53 C23 |
| Date: | 2005–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpit:0510005&r=eec |
| By: | Kenji Moriyama; Gian Maria Milesi-Ferretti |
| Abstract: | Several European Union countries have recently implemented or are envisaging fiscal that operations improve budgetary figures but have no structural impact on government finances. This paper evaluates some of these measures using a balance sheet approach. In particular, it examines the degree to which reductions in government debt in EU countries has been accompanied by a decumulation of government assets. In the run-up to Maastricht (1997) it finds a strong correlation between changes in government liabilities and government assets, and larger declines in government assets in countries starting from higher public debt levels. |
| Keywords: | Fiscal reforms , European Union , Debt , Privatization , Government expenditures , |
| Date: | 2004–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/143&r=eec |
| By: | Santiago Budría (University of Madeira and CEEAplA); Pedro Telhado Pereira (University of Madeira, CEEAplA, CEPR and IZA Bonn) |
| Abstract: | This paper explores the connection between education and wage inequality in nine European countries. We exploit the quantile regression technique to calculate returns to lower secondary, upper secondary and tertiary education at different points of the wage distribution. We find that returns to tertiary education are highly increasing when moving from the lower to the upper quantiles. This finding suggests that an educational expansion towards tertiary education is expected, ceteris paribus, to increase overall wage inequality through the withindimension. Returns to secondary education are more homogeneous across quantiles, thus suggesting that an educational expansion towards secondary education is expected to have a more limited impact on within-groups dispersion. Using data from the last decades, we assess how the impact of education on wage inequality has evolved over time. We detect different trends across countries. A common feature is that the inequality increasing effect of tertiary education became more acute over the last years. |
| Keywords: | returns to education, quantile regression, wage inequality |
| JEL: | C29 D31 I21 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1763&r=eec |
| By: | Noureddine Krichene |
| Abstract: | Option prices provide valuable information on market expectations. This paper attempts to extract market expectations, as conveyed by an implied risk-neutral probability distribution, from option prices for the dollar-euro exchange rate. Returns' volatilities are inferred from observed and interpolated option prices. To address robustness, two distributions, one from actual data and the other from interpolated data, were computed. The main conclusion of the paper is that traders have wide-ranging expectations, and large movements in either direction would not occur as a surprise. The main implication for monetary policy is that should markets become too volatile, then intervention may be required. |
| Keywords: | Emerging markets , Euro , U.S. dollar , Exchange rates , Prices , Economic models , |
| Date: | 2004–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/196&r=eec |
| By: | Richard Podpiera; Tomas Dvorak |
| Abstract: | The announcement of the European Union enlargement coincided with a dramatic rise in stock prices in accession countries. This paper investigates the hypothesis that the rise in stock prices was a result of the repricing of systematic risk due to the integration of accession countries into the world market. We found that firm-level stock price changes are positively related to the difference between a firm's local and world market betas. This result is robust to controlling for changes in expected earnings, country effects, and other controls, although the magnitude of the effect is not very large. The differences between local and world betas explain nearly 22 percent of the stock price increase. |
| Keywords: | International financial system , European Union , Asset prices , International capital markets , Stock markets , |
| Date: | 2005–09–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/182&r=eec |
| By: | Enrica Rigo |
| Abstract: | The process of repositioning European borders in the context of EU enlargement confronts the theory and practice of defining 'European citizenship'. This paper examines the deterritorialisation of the EU's external and internal borders through an analysis of the immigration laws of Poland, Romania and Bulgaria which have all been recently modified in order to meet the requirements of the Schengen aquis. Clear lines of continuity can be traced between the externalization of border control through visa policies or readmission agreements and the internalization of borders resulting from institutions which define the legal position of aliens such as expulsion or administrative detention. I will argue that the transformation of European borders creates a system of 'differentiated' memberships which questions the normative assumption that post-national communities are potentially inclusive. |
| Keywords: | European citizenship; EU-East-Central Europe; enlargement; immigration policy; asylum policy; Europeanization |
| Date: | 2005–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0159&r=eec |
| By: | Peter Barrand; Stanford G. Ross; Graham Harrison |
| Abstract: | During the 1990s, a failure to collect social contributions in Central and Eastern European countries deprived pension schemes of resources needed to meet their obligations. Based on these countries' experience, this paper examines the trend to increase coordination of tax and contribution collections. It sets out the rationale for establishing a unified agency as the best long-term strategy, and discusses policy and administrative issues in implementing this approach. The appendix presents three case studies for Albania, Bulgaria, and Romania, which are establishing a unified revenue administration. Another case study is presented for Sweden, which successfully integrated tax and social contributions collections in the 1980s. |
| Keywords: | Tax administration , Europe , Albania , Bulgaria , Romania , Sweden , Revenues , Tax collection , Social security , Economic models , |
| Date: | 2005–01–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/237&r=eec |
| By: | Daniela Del Boca (University of Turin, CHILD and IZA Bonn); Daniela Vuri (University of Florence, CHILD and IZA Bonn) |
| Abstract: | In Italy the participation of women has not increased very much in the last few decades relative to other developed countries and it is still among the lowest in Europe. The female employment rate stands almost 13 percentage points below the EU average and 22 below the Lisbon target. One of the most important reasons is related to the characteristics of child care system. In this paper we analyze the characteristics of the child care system in Italy and its relationship to the labor market participation decision of mothers. We present a simple discrete choice framework in which the two decisions can be jointly considered, which also allows for simple forms of rationing and estimate a bivariate probit model of the child care and employment decisions and interpret the results within the framework of our model. We find evidence that rationing is an important factor in interpreting price effects on utilization rates. |
| Keywords: | labor market decisions, fertility, child care |
| JEL: | J2 C3 D1 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1779&r=eec |
| By: | Sebastian Krapohl |
| Abstract: | "" |
| Date: | 2005–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0019&r=eec |
| By: | Fiona Hayes-Renshaw; Wim van Aken and Helen Wallace |
| Abstract: | This paper reports newly collected empirical data sets on explicitly contested voting at ministerial level in the Council of Ministers of the European Union. These data sets cover the period 1994-2004, with more detail for the years 1998-2004. They provide us with rather steady patterns of explicitly contested voting across the period in terms of: proportions of decisions taken where contested voting was recorded; the different levels of contestation by country; and the issue areas in which explicit voting occurred more often. The data sets draw on the material available on the Council's own website, but they have been supplemented by hand-collected data, in particular as regards issue areas and types of decision. Once arranged appropriately the data sets will be posted on the web, so that other researchers can have access to the material. The initial analysis of the data is reported in the second edition of Hayes-Renshaw and Wallace, The Council of Ministers, Palgrave, forthcoming, Chapter 10. The data show that explicit voting on agreed decisions at ministerial level is rather rare, that in nearly half the roll calls dissent is expressed only by singleton member states, that nearly half the cases concern 'technical' decisions on agriculture and fisheries, and that Germany more often votes 'no' or abstains than any other member state. The data confirm that ministers generally endorse collective decisions by consensus, even on the 70% or so cases where they could activate qualified majority voting (QMV). To the extent that voting takes place in these latter cases, it occurs implicitly rather than explicitly, operates mostly at the level of officials rather than ministers, and is not recorded systematically in publicly accessible form. These patterns are consistent with earlier accounts based on qualitative interview evidence. |
| Keywords: | Council of Ministers; majority voting |
| Date: | 2005–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0162&r=eec |
| By: | Inci Ötker; Paul Hilbers; Gudrun Johnsen; Ceyla Pazarbasioglu |
| Abstract: | This paper reviews trends in bank lending to the private sector, with a particular focus on Central and Eastern European countries, and finds that rapid growth of private sector credit continues to be a key challenge for most of these countries. The paper discusses possible implications for economic and financial stability and the policy options available to counter and reduce these risks. It argues that the authorities will need to focus on the implications for both the macro economy and the financial system and, depending on their assessment, may need a comprehensive policy response comprising a mix of macro and prudential policies. In particular where there are limitations to the effective use of monetary and fiscal measures, supervisory and prudential policy responses will have a key role in addressing financial stability concerns. |
| Keywords: | Credit expansion , Europe , Financial stability , Economic policy , |
| Date: | 2005–08–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/151&r=eec |
| By: | T. Huw Edwards (Loughborough University) |
| Abstract: | A major current issue in the economics of trade blocs is where the bloc is not just a customs union, but also incorporates substantial regulatory harmonisation or mutual recognition elements. The derivation of the costs of non-membership of such a bloc is not straightforward. In this paper I build on the assumption that observed trade pat- terns can be taken to reveal trading costs, and develop a model-consistent Dixit-Stiglitz general equilibrium-based calibration technique as an alternative to gravity methods previously used. I use the model to investigate numerically the likely trade e¤ects of the recent widening of the European Single Market to incorporate several Central and Eastern European Countries. |
| Keywords: | Protection, General Equilibrium, European Union. |
| JEL: | F12 F15 F17 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2005-04&r=eec |
| By: | Zuzana Murgasova |
| Abstract: | Analyzing and projecting the behavior of macroeconomic variables in new EU member states presents special challenges, owing to limited time series of the available data. This paper presents an analysis of investment in Poland based on an underexplored sectoral data set. The determinants of investment are found to include lagged investment, lead production, relative unit labor costs, EU demand, corporate profitability, and greenfield FDI (foreign direct investment) inflows. Dynamic in-sample simulations indicate some overinvestment in 1997 compared with what the model would suggest, and a substantial underinvestment during 2000-2004. The model is then used to project future investment: while rapid investment growth is likely, it remains uncertain whether investment as a share of GDP will reach its peak levels on the late 1990s. |
| Keywords: | Investment , Poland , Data analysis , |
| Date: | 2005–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/184&r=eec |
| By: | Hyung-Jai Choi (University of Washington); Jutta M. Joesch (Battelle Centers for Public Health Research and Evaluation); Shelly Lundberg (University of Washington and IZA Bonn) |
| Abstract: | We find a strong association between family status and labor market outcomes for recent cohorts of West German men in the German Socio-Economic Panel. Living with a partner and living with a child both have substantial positive effects on earnings and work hours. These effects persist in fixed effects models that control for correlation in time-invariant unobservables that affect both family and work outcomes. Child gender also matters - a first son increases fathers' work hours by 100 hours per year more than a first daughter. There is evidence of son "preference" in the probability that a German man is observed to be coresiding with a son or a daughter. Men are more likely to remain in the same household with a male child than a female child and girls are underrepresented in the raw data. Controlling for selective attrition in our labor supply model reveals that men who remain with female children are strongly positively selected (in terms of their work hours) relative to men who remain with male children. |
| Keywords: | child gender, fatherhood, labor supply, family |
| JEL: | J22 J12 J13 J16 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1761&r=eec |
| By: | Alexander Mihailov |
| Abstract: | This paper recovers empirically and evaluates the feedback and stance of monetary policy in the United Kingdom throughout the inflation targeting period, implemented since October 1992. Its principal contribution is in comparing two subsamples, before the Bank of England was granted operational independence in May 1997 and after that. Our econometric approach is theoretically motivated by the New Keynesian model and relies on estimating forward-looking Taylor rules via the Generalized Method of Moments from quarterly data. Both final and real-time data, with alternative variable proxies and regression specifications, were used, to find that Taylor rules based on real-time data provide a more reasonable description of British monetary policy. Interestingly, the operational independence subperiod has differed from the pre-independence one - according to our real-time data set - in terms of a weaker response of the Bank of England to inflation but stronger sensitivity to the output gap and a less restrictive stance of monetary policy. Such a reaction would, first of all, characterize the Bank as a flexible inflation targeter, as should be expected by its legal mandate, and not a strict one; secondly, the asymmetry in the feedback function appears justified once the stage in the business cycle is also taken into consideration. |
| Date: | 2005–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:esx:essedp:602&r=eec |
| By: | Gerhard Fenz (Oesterreichische Nationalbank, Econometric Modelling Group, Otto-Wagner Platz 3, POB 61, A-1011 Vienna); Martin Spitzer (Oesterreichische Nationalbank, Econometric Modelling Group, Otto-Wagner Platz 3, POB 61, A-1011 Vienna) |
| Abstract: | The modelling strategy of the Austrian Quarterly Model (AQM) is in the tradition of the ”neoclassical synthesis”, a combination of Keynesian short-run analysis and neoclassical long-run analysis. The short run dynamics are based on empirical evidence, the long run relationships are derived from a neoclassical optimization framework. Adjustment processes to the real equilibrium are sluggish. Imperfections on goods and labour markets typically prevent the economy to adjust instantaneously to the long run equilibrium. In the current version of the AQM the formation of expectations is strictly backward looking. The relatively small scale of the model keeps the structure simple enough for projection and simulation purposes while incorporating a suciently detailed structure to capture the main characteristics of the Austrian economy. The main behavioural equations are estimated using the two-step Engle-Granger technique. The AQM constitutes the Austrian block of the ESCB multi-country model (MCM). |
| Date: | 2005–09–28 |
| URL: | http://d.repec.org/n?u=RePEc:onb:oenbwp:104&r=eec |
| By: | BOURDEAU-LEPAGE, Lise (LEG - CNRS UMR 5118 - Université de Bourgogne); KOLAROVA,Desislava (Université Grenoble II - Espace Europe Institut) |
| Abstract: | Ce papier évalue la situation bulgare dans l' économie fondée sur la connaissance en Europe. Il s'appuie sur la méthodologie de la banque mondiale (2005). Après avoir présenté le cadre analytique, l' analyse révèle que la Bulgarie se trouve dans une situation très défavorable, résultant de différents facteurs se renforçant les uns aux autres dans un processus cumulatif. Aussi doit-elle s'attacher à améliorer ses règles de gouvernance et sa capacité à mobiliser le capital humain et à coordonner les interactions entre les personnes et les organisations si elle veut aller vers une économie fondée sur la connaissance. / This paper evaluates the Bulgarian positioning in the European knowledge-based economy. The analysis is mainly based on the Knowledge Assessment Methodology of the World Bank (2005). After an analytical framework, the analysis reveals an alarming situation for Bulgaria resulting from several unfavorable factors, which reinforce one another in a cumulative process. Finally, the conclusion underlines that a necessary condition for the Bulgarian economy to become knowledge-based, is to set up good rules of governance but also to be able to mobilize human capital and to coordinate the interactions within citizens and organizations |
| Keywords: | Bulgaria ; Innovation ; Knowledge-based |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:lat:legeco:2005-05&r=eec |
| By: | Joachim Wagner (University of Lueneburg and IZA Bonn) |
| Abstract: | This paper presents the first nonparametric test whether German works councils go hand in hand with higher labor productivity or not. It distinguishes between establishments that are covered by collective bargaining or not. Results from a Kolmogorov-Smirnov test for first order stochastic dominance tend to indicate that pro-productive effects are found in firms with collective bargaining only. However, the significance level of the test statistic is higher than a usually applied critical level. This somewhat weak evidence casts doubts on the validity of results from recent parametric approaches using a regression framework that point to high positive effects of works councils on productivity. |
| Keywords: | works councils, productivity, stochastic dominance |
| JEL: | J50 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1757&r=eec |
| By: | Maria Rosaria Alfano |
| Abstract: | Tax base mobility in a globalised economy implies that tax policy influences savings, domestic investments and inter-jurisdictional capital mobility. Assuming the existence of spatial and temporal interdependence, using: a data set of EU countries, after the capital market liberalisation, and a longitudinal data technique for pooling time series of cross section; we test how difference in national tax influence capital inflows and outflows. More, using a cointegration analysis on GDP procapita and FDI time series’, we investigate the link between these two paths. |
| Keywords: | Tax Competition, FDI, Economic Growth, Cointegration analysis |
| JEL: | D6 D7 H |
| Date: | 2005–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwppe:0510015&r=eec |
| By: | David Hauner |
| Abstract: | Cost-efficiency, scale efficiency, and productivity change are estimated by data envelopment analysis; and cost-efficiency is regressed on explanatory variables. No evidence is found for average productivity responding to deregulation over the period studied. State-owned banks are found to be more cost-efficient (likely owing to cheaper funds) and cooperative banks to be about as cost-efficient as private banks. Increasing economies of scale but decreasing economies of scope provide rationale for M&As among banks with similar product portfolios. Interbank and capital market funding is found to be more cost-efficient than deposits when the cost of retail networks is controlled for. |
| Keywords: | Banks , Germany , Austria , Productivity , Economic models , |
| Date: | 2004–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/140&r=eec |
| By: | Michael Funke; Sebastian Weber; Jörg Döpke; Sean Holly |
| Abstract: | We establish stylised facts for Germany's business cycle at the firm level. Based on longitudinal firm-level data from the Bundesbank's balance sheet statistic covering, on average, 55,000 firms per year from 1971 to 1998, we analyse the reallocation across individual producers and its connection to aggregate business cycles. Our results indicate a pronounced heterogeneity across firms. Moreover, the distribution of growth rates of firm's real sales is influenced by business cycle conditions. The cross-section skewness of real sales changes is counter-cyclical. The results confirm findings for the UK and the US and are, therefore, robust stylised facts of the business cycle. |
| Keywords: | Business Cycles, Cross-Sectional Moments, Firm Growth |
| JEL: | E32 D21 D92 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:ham:qmwops:20508&r=eec |
| By: | David Moore |
| Abstract: | The paper reviews Slovakia's comprehensive reforms to its taxation and welfare systems in 2004, including the introduction of a flat-rate income tax and single-rate value-added tax (VAT), and linkage of social benefits to participation in labor market programs. Though revenues following the reform are lower as a ratio to GDP, the paper argues that the reforms have helped encourage investment and improved efficiency by broadening the tax base, reducing the administrative burden, and improving work incentives. The paper also looks at some implications of the reforms for income distribution and social protection. |
| Keywords: | Tax reforms , Slovak Republic , Income taxes , Value added tax , |
| Date: | 2005–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/133&r=eec |
| By: | Joop Hartog (AIAS, University of Amsterdam and IZA Bonn); Aslan Zorlu (AIAS, University of Amsterdam) |
| Abstract: | We use data on refugees admitted to the Netherlands that include registration of education in their homeland by immigration officers. Such data are seldom available. We investigate the quality and reliability of the registrations and then use them to assess effects on refugees’ economic position during the first five years after arrival. The most remarkable finding is the absence of returns to higher education. |
| Keywords: | immigrants, refugees, education, earnings, employment |
| JEL: | I21 J31 J61 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1753&r=eec |
| By: | Hanns Ullrich |
| Abstract: | In the European Union the relationship between anti-trust law and the law against unfair practices in competition raises not only issues of how to properly delimit the scope of application of the rules of both bodies of law, but also of how to divide the exercise of legislative authority over these matters between the Community and its Member States , and of how to deal with divergences existing between the various national laws in both areas. As far as national anti-trust law is concerned , primacy of Community law, as established by Reg.1/2003, will solve the conflicts, but it cannot extend, and the Regulation expressly does not extend such primacy to national laws against unfair competition, thus leaving room for overlap and conflicts. However, it is much less the risk of direct or – more likely – indirect conflicts which needs to be examined, than the impact which the law against unfair business practices may have on the overall operation of competition in the Community . It is with a view to this intrinsic interdependency between the law against restrictive practices and the law against unfair practices that this paper examines both the development of Community anti-trust law and of harmonization of national unfair competition laws. The point is made that , on the one hand, the Community seeks to reinforce the competitive process in the market place even through consumer-related unfair competition law in that, by way of harmonization of the law, it essentially imposes upon Member States the concept of a strictly information-reliant protection of consumers ,and, on the other ,that ,as regards conduct in pure business-relationships, the Community, by a subsidiarity approach, leaves Member States much room to regulate “ competition on the merits “as they see the merits of particular business practices. In concluding, it is argued that such reliance on regulatory competition might well be used to counterbalance a one-dimensional welfare understanding of Community anti-trust law by more freedom oriented concepts of fairness in competition. |
| Keywords: | economic law; free movement; harmonisation; Single Market; competition policy |
| Date: | 2005–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euilaw:p0017&r=eec |
| By: | Yi Wu; Elina Ribakova; Dimitri G. Demekas; Balázs Horváth |
| Abstract: | Gravity factors explain a large part of Foreign Direct Investment (FDI) inflows in Southeastern Europe-a region not comprehensively covered before in econometric studies-but hostcountry policies also matter. Key are policies that affect relative unit labor costs, the corporate tax burden, infrastructure, and the trade regime. This paper develops the concept of potential FDI for each country, and uses its deviation from actual levels to estimate what policies can realistically be expected to achieve in terms of additional FDI. It also finds evidence that above a certain threshold, the importance of some policies for attracting FDI is distinctly different. |
| Keywords: | Foreign investment , Europe , Transition economies , |
| Date: | 2005–06–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/110&r=eec |
| By: | Roger, Bandick (FIEF and Örebro University); Hansson, Pär (FIEF and Örebro University) |
| Abstract: | We observe a substantial increase of foreign ownership in Sweden in the 1990s. Did that have any effect on relative demand for skilled labor? Has technology transfers often associated with inward FDI led to increased demand for skills due to skilled-biased technical change? Are there any grounds for the worries in the public Swedish debate that more skilled activities have been moved abroad to countries where the headquarters are located? We obtain support for that the share of skilled labor tends to rise in non-multinationals but not in multinationals that become foreign owned. Yet it does not seem to be any relationship between increased foreign ownership and the relative demand for skilled labor in Swedish manufacturing between 1986 and 2000. Interestingly, increased competition from low-wage countries, rather than inward FDI, has had significant impact on skill upgrading, and appears to have played a larger role in the 1990s than before. |
| Keywords: | Foreign ownership; skill upgrading; wage differentials |
| JEL: | F23 J23 J31 |
| Date: | 2005–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:fiefwp:0208&r=eec |
| By: | Francesco Pastore (Seconda Università di Napoli and IZA Bonn) |
| Abstract: | This paper proposes Heckprobit estimates of the determinants of labour market participation of a sample of young (15-30) Poles, controlling for the sample selection bias caused by excluding those in education. There is evidence of sample selection bias in the case of young men, suggesting that they obey more than women to economic factors in making their educational choices. Education is an important determinant of the success in the labour market. The instrumental variables used in the selection equation - the local unemployment rate, expected lifetime earnings and the opportunity cost of education - have a statistically significant impact on the probability to be in education. In contrast with several previous studies relative to mature market economies, in high unemployment voivodships young people prefer to seek a job, rather than studying. In turn, this contributes to make regional unemployment persistent. |
| Keywords: | youth unemployment, education, heckprobit, Lisbon strategy, Poland |
| JEL: | C35 I2 J24 P3 P52 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp1793&r=eec |
| By: | Alain N. Kabundi |
| Abstract: | This paper proposes a new way of computing a coincident indicator for economic activity in France using data from business surveys. We use the generalized dynamic factor model à la Forni and others (2000) to extract common components from a large number of survey observations. The results obtained show that the resulting indicator forecasts economic activity with a relatively high degree of accuracy before the release of actual data. |
| Keywords: | Economic growth , France , Forecasting models , Data collection , Data analysis , |
| Date: | 2004–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:04/69&r=eec |
| By: | Nienke Oomes |
| Abstract: | This paper evaluates competitiveness in Slovakia and estimates the equilibrium real exchange rate for the koruna. Slovak wages and prices are found to have been relatively low even when adjusted for differences in relative income and productivity, suggesting an undervalued real exchange rate. However, recent rapid nominal appreciation has reduced most or all of this undervaluation and has brought the real exchange rate near or above equilibrium. The productivity-driven equilibrium real appreciation rate during 2005?09 is estimated at close to 3 percent per year but can be lower with the help of fiscal consolidation. |
| Keywords: | Prices , Slovak Republic , Real effective exchange rates , Exchange rate appreciation , |
| Date: | 2005–04–04 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/65&r=eec |
| By: | Rafel Boix Domenech (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | El objetivo de la presente investigación es la identificación en España de Sistemas Locales de Trabajo (SLT) y potenciales Distritos Industriales (DI) a partir de la utilización de la metodología italiana del ISTAT. A pesar de que la estructura urbana y el sistema industrial español e italiano muestran rasgos muy similares, esta metodología no había sido aplicada en España debido a la falta de un censo industrial y de datos de movilidad laboral entre municipios. La aplicación es ahora posible al disponer de datos de movilidad laboral intermunicipal en el Censo de 2001 y utilizarse datos del DIRCE (Directorio Central de Empresas) para aproximar la dimensión de los establecimientos por sector y Sistema Local de Trabajo. La identificación para España de los distritos industriales permite el impulso de una nueva línea de política industrial que reconoce en las pymes y el territorio dos de los pilares fundamentales para el crecimiento de la productividad, y cuya aplicación se ve reforzada por la extensa experiencia italiana en la gestión de distritos industriales. |
| Keywords: | distritos industriales marshallianos; sistemas locales de trabajo; pequeña y mediana empresa; política industrial |
| JEL: | L60 R12 R23 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea0514&r=eec |
| By: | J. David Brown (Heriot-Watt University and CEU Labor Project); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Almos Telegdy (Central European University and Institute of Economics of the Hungarian Academy of Sciences) |
| Abstract: | This paper estimates the effect of privatization on multifactor productivity (MFP) using long panel data for nearly the universe of initially state-owned manufacturing firms in four economies. We exploit the key longitudinal feature of our data to measure and control for pre-privatization selection bias and to estimate long-run impacts. We find that the magnitudes of our estimates are robust to alternative functional forms, but sensitive to how we control for selection. Our preferred random growth models imply that majority privatization raises MFP about 15% in Romania, 8% in Hungary, and 2% in Ukraine, while in Russia it lowers it 3%. Privatization to foreign rather than domestic investors has a larger impact, 18-35%, in all countries. Positive domestic effects appear within a year in Hungary, Romania, and Ukraine and continue growing thereafter, but take 5 years after privatization to emerge in Russia. |
| Keywords: | privatization, productivity, foreign ownership, random growth model, transition, Hungary, Romania, Russia, Ukraine |
| JEL: | D24 G34 L33 P31 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:upj:weupjo:05-121&r=eec |
| By: | Fritz Scharpf |
| Abstract: | Germany's unique institutions of a 'unitary federal state', long considered part of the country's post-war success story, are now generally perceived as a 'joint decision trap' impeding effective policy responses to new economic and demographic challenges at both levels of government. Nevertheless, a high powered bi-cameral Commission set up in Autumn 2003 failed to reach agreement on constitutional reforms. The paper analyses the misguided procedural and substantive choices that explain the failure of reform, and it discusses the possibility of asymmetric constitutional solutions that might enhance the capacity for autonomous action at both levels. |
| Keywords: | Germany; federalism; constitutional change; multilevel governance |
| Date: | 2005–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0161&r=eec |
| By: | Nikolay Gueorguiev; Christoph Duenwald; Andrea Schaechter |
| Abstract: | Rapid credit growth in Bulgaria, Romania, and Ukraine has been driven by successful macroeconomic stabilization, robust growth, and capital inflows. While financial deepening is both expected and welcome, the recent expansions appear to have been excessive, as evidenced by widening current account deficits in Bulgaria and Romania, and prudential concerns in Ukraine. Policy responses have included attempts to both moderate credit growth and offset its impact on domestic demand, with mixed success thus far. |
| Keywords: | Transition economies , Bulgaria , Romania , Ukraine , Credit , |
| Date: | 2005–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:05/128&r=eec |