|
on European Economics |
|
Issue of 2005‒12‒09
thirty-six papers chosen by Giuseppe Marotta Universita di Modena e Reggio Emilia |
| By: | António Afonso (European Central Bank, Postfach 160319, 60066 Frankfurt am Main, Germany) |
| Abstract: | The prevalence of either Ricardian or non-Ricardian fiscal regimes is important both for practical policy reasons and to assess fiscal sustainability, and this is of particular relevance for European Union countries. The purpose of this paper is to assess, with a panel data set, the empirical evidence concerning the existence of Ricardian fiscal regimes in EU-15 countries. The results give support to the Ricardian fiscal regime hypothesis throughout the sample period, and for sub-samples accounting for the dates of the Maastricht Treaty and for the setting-up of the Stability and Growth Pact. Additionally, electoral budget cycles also seem to play a role in fiscal behaviour. |
| Keywords: | Fiscal regimes; European Union; panel data models. |
| JEL: | C23 E62 H62 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050558&r=eec |
| By: | Campa, José Manuel; Goldberg, Linda S; González Mìnguez, Jose Manuel |
| Abstract: | This paper presents an empirical analysis of transmission rates from exchange rate movements to import prices, across countries and product categories, in the euro area over the last fifteen years. Our results show that the transmission of exchange rate changes to import prices in the short run is high, although incomplete, and that it differs across industries and countries; in the long run, exchange rate pass-through is higher and close to one. We find no strong statistical evidence that the introduction of the euro caused a structural change in this transmission. Although estimated point elasticities seem to have declined since the introduction of the euro, we find little evidence of a structural break in the transmission of exchange rate movements except in the case of some manufacturing industries. And since the euro was introduced, industries producing differentiated goods have been more likely to experience reduced rates of exchange rate pass-through to import prices. Exchange rate changes continue to lead to large changes in import prices across euro-area countries. |
| Keywords: | Currency invoicing; exchange rate; local currency pricing; pass-through; producer currency pricing |
| JEL: | F3 F4 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5347&r=eec |
| By: | Francesco Paolo Mongelli (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ettore Dorrucci (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Itai Agur (European University Institute, Florence, Italy.) |
| Abstract: | The start of the European Economic and Monetary Union (EMU) has spurred a new interest in the debate on the effects of monetary unions on regional economic integration. This literature either investigates past episodes of monetary unions or attempts to gauge any effect with a few years of EMU data. This paper takes instead a more general perspective - it investigates the link between economic integration and the overall institutional process of regional integration in Europe – of which monetary integration was only one step – over the last 50 years. We look mainly at two dimensions - European institutional integration – whose main steps were the customs union in 1968, the single market in 1993 and the single currency in 1999 – and intra-European trade. We pay special attention to the successive EU enlargements which took place in 1973, 1981, 1986, and 1995. Different facets of openness and trade linkages are presented. After looking at some descriptive links between institutional and trade integration, the paper uses some causality tests to assess the direction of causality and magnitude of impact. The evidence provided is consistent with the idea that the interaction between regional institutional and trade integration before monetary union matters. Such interaction runs in both directions, although the link from institutional to trade integration dominates. Many open questions remain, however. |
| Date: | 2005–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20050040&r=eec |
| By: | Kurt Geppert; Michael Happich; Andreas Stephan |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp525&r=eec |
| By: | Jérôme Héricourt (TEAM) |
| Abstract: | How did European Central Bank (ECB) fit the disparate macroeconomic needs of euro zone members? The purpose of this paper consists in providing quantitative answers to this question presenting an original methodology. After estimating unified frameworks of monetary transmission mechanisms for nine euro zone countries, we compute the national evolutions of output gap and inflation since 1999, in a fictitious context where the euro has never been launched. Using a loss function as a standard for macroeconomic stabilization, these simulations are then compared with the actual outcomes over the period 1999-2003. Our major result is that the ECB did a far better stabilization job for euro zone countries than national central banks would have done. |
| Keywords: | Taylor rules, monetary policy transmission, alternative world, simulations, stabilisation. |
| JEL: | E52 E58 F47 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:wpsorb:bla04004a&r=eec |
| By: | von Hagen, Jürgen |
| Abstract: | Fiscal rules specify quantitative targets for key budgetary aggregates. In this paper, we review the experience with such rules in Japan and in the EU. Comparing the performance of fiscal policy in the 1980s and 1990s until 2003, we find that the fiscal rule of the 1980s exerted some but not much disciplinary influence on Japanese fiscal policy. The fiscal rule of the Maastricht Treaty had a significant impact on political budget cycles in the EU, but did little to constrain fiscal policy in the large member states. Since the start of the European Monetary Union, the disciplinary effect of the fiscal rule in the EU has vanished. Next, we discuss the importance of budgetary institutions for the effectiveness of fiscal rules. In Europe, a number of countries adopted strong fiscal rules, i.e., a fiscal rule combined with a design of the budget process enabling governments to commit to the rule. We find that strong fiscal rules have been effective. We conclude with some suggestions for the design of a strong fiscal rule in Japan. |
| Keywords: | fiscal policy; government budgeting; political budget cycles |
| JEL: | H11 H61 H62 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5330&r=eec |
| By: | Jacobs, Bas; van der Ploeg, Frederick |
| Abstract: | Although there are exceptions, most European universities and institutions of higher education find it difficult to compete with the best universities in the Anglo-Saxon world. Despite the Bologna agreement and the ambitions of the Lisbon agenda, European universities are in need of fundamental reforms. We look at structural reforms of higher education and propose more effective use of public subsidies, more efficient modes of financing institutions of higher education, more diversity, competition and transparency, and larger private contributions through income-contingent student loans. In the process we discuss the nature of an institution of higher education, grade inflation, fair competition, private and social returns to education, income-contingent loans, student poverty and transparency. We sum up with seven recommendations for reform of higher education. |
| Keywords: | central planning; education subsidies; equity; grade inflation; higher education; input funding; monopoly; output funding; peer review; policy reform; selection; student loans; transparency; tuition fees; variety |
| JEL: | H2 H4 I2 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5327&r=eec |
| By: | L. Randall Wray (The Levy Economics Institute & University of Missouri, Kansas City); C. Sardoni (University of Rome “La Sapienza) |
| Abstract: | In the debate on monetary policy strategies on both sides of the Atlantic, it is now almost a commonplace to contrast the Fed and the ECB by pointing out the former’s flexibility and capacity to adjust rigidity, and the latter’s extreme caution, and obsession with low inflation. In looking at the foundations of the two banks’ strategies, however, we do not find differences that can provide a simple explanation for their divergent behavior, nor for the very different economic performance in the U.S. and Euroland in recent years. Not surprisingly, both central banks share the same conviction that money is neutral in the long period, and even their short-term policies are based on similar fundamental principles. The two policy approaches really differ only in terms of implementation, timing, competence, etc., but not in terms of the underlying theoretical orientation. We then draw the conclusion that monetary policy cannot represent a significant variable in the explanation of the different economic performances of Euroland and U.S. The two economic areas’ differences must be explained by considering other factors among which the most important is fiscal policy. |
| Keywords: | monetary policy, federal reserve, European central bank, fiscal policy, aggregate demand, growth |
| JEL: | E12 E42 E58 E62 |
| Date: | 2005–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0511025&r=eec |
| By: | Prof. Dr. Carsten Ochsen (University of Rostock) |
| Abstract: | In this paper we investigate the effects of labour market policy on several types of criminal offences for fifteen European countries. The main results are the following: Firstly, the results change markedly if we control for unobserved heterogeneity. In the context of criminal offences the estimates seem to be reliable only if we apply fixed effects instead of simple pool specifications. Secondly, the effects of labour market policy vary considerably with respect to the different types of criminal offences and cannot be subdivided into unambiguous effects on property crimes and violent crimes, respectively. Thirdly, the proxy variables for labour market policy we consider have different importance with respect to their effect on criminal offences. Benefit replacement rate, benefit duration, and average years of schooling seem to be important, whereas active labour market policy appears not to be linked to crime. The combination of a shorter benefit duration and higher replacement rate, like in the Nordic countries, seems to be a “crime reducing” combination. |
| Keywords: | Unemployment, labour market policy, illegal behaviour, time allocation |
| JEL: | J64 H31 K42 J22 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:55&r=eec |
| By: | Huizinga, Harry |
| Abstract: | The EU deposit insurance directive requires member states to maintain deposit insurance with a minimum insured amount of 20,000 euros. This paper reviews the rationale for international coordination of deposit insurance policies. For international externalities of deposit insurance policies to exist, there has to be international ownership of either bank deposits or bank shares. On both counts, EU banking markets are currently highly integrated. The minimum coverage of 20,000 euros imposes costs if it forces some countries to 'overinsure' deposits. From a national perspective, the deposit insurance directive does not appear to result in overinsurance in the EU-15, but there may be overinsurance in several of the new member states. |
| Keywords: | deposit insurance; international coordination |
| JEL: | F36 G28 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5277&r=eec |
| By: | Michael Ehrmann (Correspondence to: European Central Bank, Postfach 160319, 60066 Frankfurt am Main, Germany); Marcel Fratzscher (European Central Bank, Postfach 160319, 60066 Frankfurt am Main, Germany) |
| Abstract: | The paper shows that central bank communication is a key determinant of the market’s ability to anticipate monetary policy decisions and the future path of interest rates. Comparing communication policies by the Federal Reserve, the Bank of England and the ECB since 1999, we find that communicating the diversity of views among committee members about monetary policy lowers the market’s ability to anticipate policy decisions as well as the future path of interest rates. This effect is sizeable, accounting for instance for one third to half of the prediction errors of FOMC policy decisions. By contrast, individualistic communication regarding the economic outlook is found to be beneficial for the Federal Reserve, enabling market participants to better anticipate the future path of interest rates. Thus, it is the collegiality of views on monetary policy but the diversity of views on the economic outlook that enhance the effectiveness of central bank communication. |
| Keywords: | Communication; monetary policy; committee; effectiveness; economic outlook; Federal Reserve; Bank of England; European Central Bank. |
| JEL: | E43 E52 E58 G12 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050557&r=eec |
| By: | Wolfgang Kerber; Dr. Martina Eckardt (University of Rostock) |
| Abstract: | The Open Method of Coordination (OMC) is a new governance method applied in the European Union to policy fields where the main competences still rest with the member states. The OMC should help to foster mutual learning about successful policies and promote policy transfer by identifying best practices and recommending them. By confronting this approach with the economic concept of laboratory federalism its potential for the innovation and diffusion of policies in a multi-level governance system is analysed. Both concepts use the basic idea of decentralised experimentation and mutual learning from experiences with implemented policies. Whereas the OMC organizes this learning process to a greater extent “topdown”, laboratory federalism is much more a “bottom-up” concept. Their advantages and shortcomings in evaluating, finding and transferring best policies are discussed and the underlying insufficiencies in setting adequate incentives for adopting better policies are analysed. It is shown that under certain conditions both concepts can supplement each other. |
| Keywords: | European Union, Federalism, Open Method of Coordination, Policy Coordination, Policy Innovation, Policy Learning |
| JEL: | D7 F02 F42 H7 |
| Date: | 2004 |
| URL: | http://d.repec.org/n?u=RePEc:ros:wpaper:48&r=eec |
| By: | Stephan Betschart (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Rita Kobel Rohr (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Christoph Mosimann (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)); Christoph Siepmann (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)) |
| Abstract: | What are the consequences of European economies’ goods structure for their exports as they face Asian competition? Over the last 30 years, the share of East Asian nations in international merchandise trade has been growing noticeably. This rise is often explained by the notion that Asian countries developed a network in which the production of mainly machinery goods has been split up along the production chain over different (Asian) countries and firms. Even though European imports from and exports to Asian countries currently account for only a relatively small fraction of Europe’s total trade, this share is increasing. Thus, the question regarding export perspectives of the European industry facing Asian competition arises. Based on the goods structure of eleven European and five Asian economies as well as the USA using the Standard International Trade Classification at the 1- and 2-digit level, similarities, differences and trends over time are analysed. The additional distinction of the export structure by stage of production (on the basis of the Broad Economic Categories of the United Nations) provides some information with respect to whether an economy is more assembly-based and less research-based or not. Moreover, special attention is given to the share in high-tech goods of the selected countries. Exports of hightech products expand more strongly with spill-over effects on other sectors of an economy. A look at the development of trade balances completes the picture, which of the European economies considered have more favourable export perspectives in the medium term and which ones less so. |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:05-104&r=eec |
| By: | Edoardo Gaffeo; Giuliana Passamani; Roberto Tamborini |
| Abstract: | The recent revision (March 2005) of the Stability and Growth Pact (SGP) has confirmed the 3% deficit/GDP ratio as the pillar of the excessive deficits procedure envisaged by the Maastricht Treaty for member countries of the EMU. Since the deficit/GDP ceiling is still in place, research on its implications for fiscal discipline and macroeconomic stabilization has to be pushed further. We argue that the agenda largely involves empirical matters. In particular, this paper presents an econometric estimate and simulations of a macroeconomic model of Italy and Germany aimed at addressing three issues. First, monetary and fiscal rules intercations are explictly modelled and examined in dynamic setting. Second, consistently with common perception and the new formulation of the SGP, the business cycle and the responses of policy variables are cast in terms of growth gaps, not gaps in levels, with respect to potential. Third, budgetary components (primary expenditure and total tax revenue) are examined as separate fiscal rules, which allows us to track the reaction of the fiscal stance to growth shocks more precisely, to point out several pitfalls in current measures of fiscal ratios to GDP, and suggest more accurate assessment of fiscal stances. |
| Keywords: | Fiscal policy, Stability and Growth Pact |
| JEL: | E0 E6 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:trn:utwpde:0519&r=eec |
| By: | Harhoff, Dietmar; Wagner, Stefan |
| Abstract: | We analyze the duration of patent examination at the European Patent Office (EPO). Our data contain variables that are correlates of the applicants’ and examiners’ assessments of a patent’s economic and technical relevance as well as ex post-application citation measures which indicate the impact of the patent application on the state of the art. We present descriptive statistics for 30 major technology fields. In our multivariate analysis we estimate competing risk specifications in order to characterize differences in the processes leading to either a withdrawal of the application by the applicant, a refusal of the patent grant or an actual patent grant by the European Patent Office. Measuring a patent’s importance relying on the number of citations by subsequent patents we find that more important patents are approved faster by the EPO than less important patents but that applicants are more hesitant to withdraw these potentially valuable applications. |
| Keywords: | European Patent Office; patent examination; patents; survival analysis |
| JEL: | C15 C41 D73 O34 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5283&r=eec |
| By: | Erdal Atukeren (Swiss Institute for Business Cycle Research (KOF), Swiss Federal Institute of Technology Zurich (ETH)) |
| Abstract: | This paper examines the causal relationships between the R&D sector activities of the EU and the US in a multivariate framework. As a novelty in this literature, we employ the subset transfer function methodology to account for the possibility of “dry holes” in the effects of R&D efforts on economic activity. We find that R&D activity in the EU is a direct Granger-cause of both R&D and economy-wide productivity in the US, and the effects are negative. On the other hand, the EU reacts positively to increases in R&D productivity in the US. Thus, the US can be said to respond submissively to an R&D move by the EU, while the EU’s reaction to the R&D efforts by the US firms is on the aggressive side. These findings are largely in line with the actual developments in the productivity differentials between the EU and the US and the patterns in their relative shares in the world market for high tech exports. |
| Keywords: | R&D races, productivity spillovers, direct Granger-causality, EU’s Lisbon targets, high tech exports |
| JEL: | C32 O30 O40 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:kof:wpskof:05-105&r=eec |
| By: | Wagner, Martin (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria) |
| Abstract: | Based on two detailed Balassa-Samuelson (BS) studies, Wagner and Hlouskova (2004) for eight Central Eastern European countries (CEECs) and Wagner and Doytchinov (2004) for ten Western European countries (WECs), this study assesses the differences and similarities of the BS effect between these two country groups. The econometric results show that the BS effect may have been overestimated in previous studies due to application of inappropriate first generation panel cointegration methods. When appropriately quantified, the BS effect itself explains RER movements respectively inflation differentials only to a small extent. However, extended BS relationships that include additional variables allow for an adequate modelling of inflation. Based on the comparative analysis we draw some conclusions for monetary policy in the future enlarged Euro Area. |
| Keywords: | Balassa-Samuelson effect, Central and Eastern Europe, Western Europe, Non-stationary panels, Inflation simulations |
| JEL: | F02 O40 P21 P27 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:180&r=eec |
| By: | Carmen Raluca Stoian; Roger Vickerman |
| Abstract: | A bi-directional relationship between FDI and economic reforms in ten Central European countries is tested, along with the role of the EU in breaking a potential vicious circle of insecurity, little investment, slow reforms, low prospects of EU membership and hence high insecurity. Using panel data regressions and a system of simultaneous equations, we find evidence that the prospect of EU membership has enhanced FDI in the less reformist candidates and that trade integration and increased EU financial assistance have improved FDI in the CEECs. |
| Keywords: | foreign direct investment determinants; economic transition; economic reforms; Central and Eastern Europe |
| JEL: | F2 C2 C3 P26 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:ukc:ukcedp:0509&r=eec |
| By: | Felix Hammermann; Rainer Schweickert |
| Abstract: | Institutional development in new and potential member countries determines the success of both the catching-up of developing European countries and the deepening of the European integration process. This paper argues that the timing of future enlargement should depend on institutional convergence between the EU and potential accession candidates. Therefore, the paper looks at institutional quality in the EU, in the EU’s neighboring Balkan and Black Sea regions, and especially in Bulgaria, Romania, Croatia, Turkey, and Ukraine, i.e. the next countries in the queue for entry or likely to lobby for entry into the EU. Three dimensions of institutional quality—legislative, administrative, and judicative institutions—are analyzed on the basis of the World Bank Governance Indicators using institutional quality in EU member states as a benchmark in order to reveal institutional deficits. |
| Keywords: | Institutions, Transitional Economies, EU Enlargement, Regional Integration, Economic Development |
| JEL: | P20 F15 O10 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1261&r=eec |
| By: | Tokgoz, Simla |
| Abstract: | The European Union (EU) accomplished its biggest enlargement process in 2004 in terms of the number of countries, area, and population. This study focuses on the impact of enlargement, the resulting technology transfer on the grain sectors of the New Member States (NMS), and the consequent welfare implications. The study finds that EU enlargement has important implications for the EU and the NMS, but its impact on the world grain markets is minimal. The results show that producers in the NMS gain from accession because of higher prices, whereas consumers in most NMS face a welfare loss. Incorporating technology transfer into the accession increases the welfare gain of producers despite falling prices because of the larger supply shift. The loss of welfare for consumers in most NMS is lower in this case because of the decline in grain prices. |
| Keywords: | EU enlargement, technology transfer, welfare. |
| Date: | 2005–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12478&r=eec |
| By: | Hubert Gabrisch; Herbert Buscher |
| Abstract: | Does the disappointingly high unemployment in Central and East European countries reflect non-completed adjustment to institutional shocks from transition to a market economy, or is it the result of high labour market rigidities, or rather a syndrome of too weak aggregate demand and output? In the case of transitional causes, unemployment is expected to decline over time. Otherwise, it would pose a challenge to the European Union, particular in case of accession countries, for it jeopardizes the ambitious integration plans of, and may trigger excessive migration to the Union. In order to find out which hypothesis holds 15 years after transition has started, we analyze the unemploymentgrowth dynamics in the eight new member countries from Central-Eastern Europe. The study is based on country and panel regressions with instrument variables (TSLS). The results suggest to declare the transition of labour markets as completed; unemployment responds to output and not to a changing institutional environment for job creation. The regression coefficients report a high trend rate of productivity and a high unemployment intensity of output growth since 1998. The conclusion is that labour market rigidities do not to play an important role in explaining high unemployment rates. Rather, GDP growth is dominated by productivity progress, while the employment relevant component of aggregate demand is too low to reduce substantially the high level of unemployment. |
| Keywords: | Unemployment, Okun’s law, Transition |
| JEL: | E24 J23 P23 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:5-05&r=eec |
| By: | Schotman, Peter C; Zalewska, Anna |
| Abstract: | The paper contributes to the literature on integration of stock markets by addressing the issue of non-synchronous trading. We argue that controlling for time differences in trading hours of stock markets is important and show that time-adjustment improves estimates of market integration. We also show that using weekly frequency does not sidestep the consequences of the time-match problem but leads to significant loss of information. We show that the nature of integration of stock exchanges operating in the Czech Republic, Hungary, and Poland with the stock markets of Germany, UK and US in the period 1994-2004 is very dynamic. Finally, the study shows that the autocorrelation of returns on the main market indexes of the emerging markets have declined over time. |
| Keywords: | emerging markets; Kalman filter; market efficiency; market integration; non-synchronous trading |
| JEL: | G14 G15 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5352&r=eec |
| By: | Lionel Artige; Rosella Nicolini |
| Abstract: | This study aims at analyzing the determinants of FDI (foreign direct investment) inflows for a group of European regions. The originality of this approach lies in the use of disaggregated regional data. First, we develop a qualitative description of our database and discuss the importance of the macroeconomic determinants in attracting FDI. Then, we provide an econometric exercise to identify the potential determinants of FDI. In spite of choosing regions presenting economic similarities, we show that regional FDI inflows rely on a combination of factors that differs from one region to another. |
| Keywords: | Foreign Direct Investment, Productivity, Regions |
| JEL: | F20 O47 R10 |
| Date: | 2005–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:aub:autbar:655.05&r=eec |
| By: | Steven Brakman; Harry Garretsen; Marc Schramm |
| Abstract: | Based on a new economic geography (NEG) model by Puga (1999), we use the equilibrium wage equation to estimate two key structural model parameters for the NUTS II EU regions. These estimations enable us to come up with an empirically grounded free-ness of trade parameter. In line with NEG theory, the estimation results show that a spatial wage structure exists for the EU regions. By going back to the theoretical model we then analyze the implications of the free-ness of trade parameter for the degree of agglomeration. Our main findings suggest that agglomeration forces still have only a limited spatial reach in the EU. Agglomeration forces appear to be rather localized. At the same time, confronting our empirical results with the underlying new economic geography model also brings out the limitations of empirical research in new economic geography. |
| JEL: | F12 J31 R12 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1566&r=eec |
| By: | Ansgar Belke; Frank Baumgärtner; Friedrich Schneider; Ralph Setzer |
| Abstract: | This paper empirically investigates the differences in the motives of raising privatisation proceeds for a panel of EU countries from 1990 to 2000. More specifically, we test whether privatisations can be mainly interpreted (a) as ingredients of a larger reform package of economic liberalisation in formerly overregulated economies, (b) as a reaction to an increasing macroeconomic problem pressure and (c) as a means to foster growth and increase tax income and relax the fiscal stance with an eye on the demands by integration of economic and financial markets. Whereas we are able to corroborate claim (a) only partly, we gain consistent evidence in favour of claims (b) and (c). |
| Keywords: | European Union, panel analysis, partisan theory, privatisation proceeds, state-owned enterprises |
| JEL: | E62 H42 L33 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1600&r=eec |
| By: | Paola Valbonesi (Università di Padova); Raffaele Miniaci (Università di Padova); Carlo Scarpa (Università di Brescia) |
| Abstract: | Competition in public utility sectors has been encouraged in recent years throughout Europe. In this paper we try and analyse the welfare effects of these reforms in Italy, with particular attention to water and energy goods. The first step is to introduce a sensible measure of affordability of public utilities and to see how many households fall below a critical threshold. This issue is analysed stressing how climatic conditions dramatically affect households’ expenditure and how the affordability of utility bills varies a lot from region to region. So far, utilities’ reforms do not seem to have produced negative effects on the weaker group of households. |
| Keywords: | Consumer behaviour, Public utilities, Regulation, Gas, Electricity, Water |
| JEL: | D12 L51 L97 |
| Date: | 2005–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2005.134&r=eec |
| By: | Maciej Bukowski (Warsaw School of Economics, Institute for Structural Research); Piotr Lewandowski (Warsaw School of Economics, Institute for Structural Research); Iga Magda (Ministry of Economy); Malgorzata Sarzalska (Ministry of Economy); Julian Zawistowski (Ministry of Economy, Institute for Structural Research) |
| Abstract: | This publication is a non-technical report prepared for Polish Ministry of Economy and Labor. The main goal is to present a comprehensive statistical and econometric analysis of employment, unemployment and participation in Poland in the period 1998-2004 and confront Polish experiences with international empirical and theoretical studies in labor economics. Also the qualitative survey of institutional background of labor market in Poland is conducted. We complement our research with some policy prescriptions. At the moment Poland exhibits the highest unemployment rate in OECD and one of the lowest employment and participation rates. We begin with a detailed analysis of the reasons of the rapid decrease of employment and increase of unemployment in 1998- 1999 and its later persistence. We find that the supply-side characteristics and sectoral structure of the economy significantly influenced the strength and the durability of the effects of the Russian crisis of 1998 and of the adverse supply shock that affected Polish economy in 2001-2002. We scrutinize the ability of various groups of workers (by age and education level attained) to cope with both shocks and constantly undertaken restructuring. We also focus on structural mismatch between labour demand and labour supply in Poland. We find that the employment gap between Poland and UE15 is mostly due to low participation/employment of older workers in Poland, although individuals aged 15-24 also contribute to this gap. However, we show that low participation of young is mostly connected to lengthening of average education spells whereas older workers take advantage of the social security benefits subsidizing leisure. We complement our analysis with multinomial logit of transitions on Polish labor market. Then we turn to the role played educational system in the accumulation of the human capital by young people, and we evaluate the life-long learning in Poland. We find that schooling system is rather inefficient in shaping creativity and solving problems exceeding schematic procedures and algorithms. Then we focus on the influence exerted in Poland by standard labor market institutions, like social security system, taxes, minumum wages, trade unions, employment protection legislation, active labor market policy. In each case we begin with description of the shape of these institutions in Poland and then we empirically assess their relative importance for labour market performance. |
| Keywords: | Poland, unemployment, employment, participation, labor market institutions, social security, human capital in transition countries |
| JEL: | E24 H31 H55 J20 J21 J22 J68 P23 |
| Date: | 2005–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpla:0512003&r=eec |
| By: | Lorentowicz, Andzelika; Marin, Dalia; Raubold, Alexander |
| Abstract: | Feenstra and Hanson (1997) have argued in the context of the North American Free Trade Agreement that US outsourcing to Mexico leads to an increase in the skill premium in both the US and Mexico. In this paper we show on the example of Austria and Poland that with the new international division of labour emerging in Europe Austria, the high income country, is specializing in the low skill intensive part of the value chain and Poland, the low income country, is specializing in the high skill part. As a result, skilled workers in Austria are losing from outsourcing, while gaining in Poland. In Austria, relative wages for human capital declined by 2 percent during 1995-2002 and increased by 41 percent during 1994-2002 in Poland. In both countries outsourcing contributes roughly 35 percent to these changes in the relative wages for skilled worker. Furthermore, we show that Austria's R&D policy has contributed to an increase in the skill premium there. |
| Keywords: | foreign direct investment; transition economics; wage inequality |
| JEL: | F21 F23 J31 P45 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5344&r=eec |
| By: | Honohan, Patrick; Leddin, Anthony J |
| Abstract: | Despite anchoring the Irish monetary system to a common zone-wide exchange rate and interest rate, EMU has triggered sizable exchange rate and especially interest rate shocks to the Irish economy (albeit not appreciably greater than those experienced under previous exchange rate regimes). Interest rate movements have deviated widely from what a standard Taylor monetary policy rule would have counseled - though here again the deviations have been no worse in this regard than those of the previous regime. The most important shock has been associated with the large and sustained initial fall in nominal interest rates as EMU began. Through mechanisms which we formally model, the interest rate fall has had a lasting effect on property prices, construction activity and on the capacity of the labour market to absorb sizable net immigration, despite a sharp deterioration in wage competitiveness since 2002. As the long drawn-out impact of this shock subsides, the failure of the wage-bargaining system promptly to claw back the loss of competitiveness resulting from exogenous exchange rate movements is increasingly likely to show up in weaker aggregate employment performance. |
| Keywords: | asymmetric shocks; European Monetary Union; Ireland |
| JEL: | E32 E42 F4 |
| Date: | 2005–11 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:5349&r=eec |
| By: | Amelie Constant (The Institute for the Study of Labor (IZA), Bonn); Yochanan Shachmurove (Departments of Economics, City College of The City University of New York and University of Pennsylvania) |
| Abstract: | This paper attempts to compare the economic success of immigrants and natives in Germany. Employing data from German Socioeconomic Panel, the paper investigates the factors affecting self-employment as well as compares the income of self-employed and employed workers among four groups – West Germans, East Germans, guest workers and ethnic immigrants. Increasing age, higher education and self-employed parents increases probability of an individual’s self-employment, with the last two applying only to West Germans. The self-employed earn more than their salaried counterparts, except for East Germans. Despite self-employed immigrants having the highest earnings of all groups, self-employment rates remain low among immigrants. |
| Keywords: | Entrepreneurship,self-employment,Occupational Choice,immigrants,Wage Differentials |
| JEL: | J23 M13 J24 J61 J31 |
| Date: | 2005–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:pen:papers:05-030&r=eec |
| By: | Konstantin A. Kholodilin; Boriss Siliverstovs |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp522&r=eec |
| By: | Pierre Beret (LEST - Laboratoire d'économie et de sociologie du travail - http://www.univ-aix.fr/lest - CNRS : UMR6123 - Université de Provence - Aix-Marseille I;Université de la Méditerranée - Aix-Marseille II); Arnaud Dupray (CEREQ - Centre d'études et de recherches sur les qualifications - http://www.cereq.fr/) |
| Abstract: | Les raisons mêmes de la formation professionnelle continue (fpc) et ses formes de valorisation salariale sont largement dépendantes de la manière dont sont construits les rapports entre formation initiale et marché du travail. C'est un des intérêts d'une comparaison entre la France et l'Allemagne dont les espaces de qualification sont très différents. De ce point de vue, l'analyse des évolutions intervenues dans les deux pays depuis 20 ans a amené à formuler les hypothèses suivantes. Pour la France, celle d'un basculement d'un espace de qualification surdéterminé par les marchés internes dans les années 70 à un espace structuré autour de la formation initiale qui a explosée sur la période. Cependant, la forte incertitude sur la contribution productive de cette formation oblige les entreprises à mettre en place des dispositifs de sélection des salariés. Dans ce cadre, la fpc ne fait que ratifier, en l'objectivant, le succès relatif dans l'épreuve de sélection auquel renverrait le cheminement du salarié dans l'entreprise. Dans ce cadre, on avance l'hypothèse qu'il y a dans les années 90 un découplage entre augmentation de salaire et apport productif de la fpc. Pour l'Allemagne, malgré une déstabilisation relative du système dual liée à des forces de différenciation entre filières et à une volonté des jeunes de poursuivre dans l'enseignement supérieur, l'espace de qualification reste, dans les années 90, largement organisé autour d'une formation professionnelle initiale reconnue. Dans ce cadre, la fpc s'inscrit dans une logique d'investissement dont le salarié tire la contre-partie dans une amélioration de sa rémunération. Ces hypothèses ont été testées à partir de l'enquête FQP 1993 et du German Socioeconomic Panel. L'examen du rendement de la fpc selon le moment où elle a eu lieu et selon le nombre de formation suivies accrédite le passage en France d'une logique d'investissement à une logique de signalement, alors qu'une logique d'investissement serait toujours à l'œuvre outre-Rhin. La prise en compte d'un éventuel biais de sélection confirme cette thèse puisque le rendement de la formation continue en France est largement dépendant des caractéristiques professionnelles des salariés qui suivent une formation, alors qu'en Allemagne, la fpc présente une efficacité salariale forte au delà des caractéristiques de ses bénéficiaires. |
| Keywords: | FPC - Formation Professionnelle Continue; Formation initiale; Salaire; Marché interne; Qualification; Comparaison; France; Allemagne |
| Date: | 2005–11–24 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00006122_v1&r=eec |
| By: | Sonsbeek, J.M. van (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics); Gradus, R.H.J.M. |
| Abstract: | This paper introduces a microsimulation model that simulates the budgetary impact of the 2006 regime change in the Dutch disability scheme. A dynamic population model fits the case of the disability benefits the best. As opposed to macro forecasts, a microsimulation can answer questions about the individual or meso income effects, the exact distribution of expenses among different benefits and the time path of the savings. The introduction of the proposed system change decreases the number of disability benefits by more than 25 % from 2020 onwards and reduces total costs by almost _ 2 billion or 20 %. Based on the better incentive structure, participation will increase and boost GDP. Microsimulation can be used to pick the winners and losers of the new system and give the time path of the savings. It is shown that for almost all partially disabled that are working, the total discounted income after the system change is as large as or larger than before the system change, for the non-working total discounted income is lower. |
| Keywords: | Disability schemes; Incentive structures; Micro-simulation |
| JEL: | H55 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:vuarem:2005-12&r=eec |
| By: | Piotr Wdowinski |
| Abstract: | In this paper we present simulations of economic performance of the Polish economy based on a quarterly econometric model. The model consists of 22 stochastic equations, which link the financial market with the real economy. The purpose of the research is to present effects of changes to domestic and foreign interest rates and the EUR/USD exchange rate on economic growth in Poland over the period Q2, 1993 - Q2, 2003. |
| Keywords: | financial market, economic growth, econometric model, simulation, Poland |
| JEL: | C30 C50 E60 F10 G10 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1557&r=eec |
| By: | Christian Dustmann; Francesca Fabbri |
| Abstract: | In this paper we investigate the economic activity of married or cohabiting female immigrants in Britain. We distinguish between two immigrant groups: foreign-born females who belong to an ethnic minority group and their husbands, and foreign-born white females and their husbands. We compare these to native-born white women and their husbands. Our analysis deviates from the usual mean analysis and investigates employment, hours worked and earnings for males and females, as well as their combined family earnings, along the distribution of husbands’ economic potential. We analyse the extent to which economic disadvantage may be reinforced at the household level and investigate to what extent it can be explained by differences in observable characteristics. We find that white female immigrants and their husbands have an overall advantage in earnings over white native born, both individually and at the household level. Minority immigrants do less well, in particular at the lower end of the husband’s economic potential distribution. This is mainly due to the low employment of both genders, which leads to a disadvantage in earnings, intensified at the household level. Only part of this differential can be explained by observable characteristics. |
| JEL: | J15 |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_1598&r=eec |
| By: | Robert Boyer |
| Abstract: | Contrary to the prognosis derived from the variety of capitalism literature, since the mid-90s the significant restructuring of large German corporations in the direction of shareholder value seems to have been compatible with the persistence of a genuine configuration of industrial relations, including co-determination at the firm level. This article investigates whether this is a long lasting compatibility and tests various research programs in institutional economics and thus explores the consequences alternative hypotheses about institutional complementarity or hierarchy, comparative institutional analysis, comparative historical analysis, hybridization and finally régulation theory. Even if the process is highly uncertain, one major conclusion emerges: the old German model is probably irreversibly transformed and is evolving towards an unprecedented configuration, with only mild and distant relations to a typical liberal brand of capitalism. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:pse:psecon:2005-39&r=eec |