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on European Economics |
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Issue of 2007‒09‒02
thirteen papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | Julie Chytilová (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Michal Mejstřík (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | The authors find that as they seek to develop a social model both appropriate to their needs and consistent with EU standards, Eastern European countries must understand that a single European Social Model does not exist. Recently, some Eastern European unionists have begun to support their demands with reference to the European Social Model, which they only comprehend, however, in terms of its most inefficient Continental form. Eastern European countries must engage in a deeper public discussion of the pros and cons of various diverse social models, while taking into account the effects of different social models on the past and future competitiveness of the countries that have adopted them. Let those models compete to open opportunities based on forward-looking approach with full respect to the minimum harmonized standards (such as social safety net etc.) instead of fixing the past. |
| Keywords: | European social model, competitiveness, welfare, public goods |
| JEL: | H11 H4 I38 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2007_24&r=eec |
| By: | Castaldi, Carolina; Sapio, Sandro (Groningen University) |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugggd:gd-88&r=eec |
| By: | Alexander Heuer; Malwina Mejer; Jennifer Neuhaus |
| Abstract: | We analyze the impact of national pharmaceutical regulation on the launch delay of new chemical entities approved by the EMEA’s centralized procedure. We find that direct price control regimes have a significantly negative impact on the launch timing. These results cannot be found when investigating the impact of indirect price controls. Our results show that Germany (65%) has the highest probability of experiencing an early launch, while it is the lowest in southern European countries (18% for Portugal and 19% for Greece). This difference accrues from both price regulation and market attractiveness, since southern European countries generally have lower prices. Due to the possibilities for parallel trade within the EU, pharmaceutical companies, by acting strategically, may further increase launch delays. |
| Keywords: | pharmaceuticals, regulation, new chemical entity, parallel trade |
| JEL: | I11 I18 L51 |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieasw:437&r=eec |
| By: | Antje Berndt (Tepper School of Business, GSIA Room 317A, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213, USA.); Iulian Obreja (Tepper School of Business, GSIA Room 317A, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213, USA.) |
| Abstract: | This paper investigates the determinants of the default risk premia embedded in the European credit default swap spreads. Using a modified version of the intertemporal capital asset pricing model, we show that default risk premia represent compensation for bearing exposure to systematic risk and to a new common factor capturing the proneness of the asset returns to extreme events. This new factor arises naturally because the returns on defaultable securities are more likely to have fat tails. The pricing implications of this new factor are not limited to credit markets only. We find that this common factor is priced consistently across a broad spectrum of corporate bond portfolios. In addition, our asset pricing tests also document patterns that are consistent with the so called "flight to quality" effect. JEL Classification: G12, G13, G15. |
| Keywords: | Credit default swap, default risk premium, European credit market, European corporate bond markets, risk factors. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070805&r=eec |
| By: | Lemke, Wolfgang |
| Abstract: | A joint model of macroeconomic and term structure dynamics is specified and estimated for the euro area. The model comprises a backward-looking Phillips curve, a dynamic IS equation, a monetary policy rule as well as a specification of the dynamics of trend growth and the natural real interest rate. Under the condition of no arbitrage, yields of all maturities are affine functions of the macroeconomic driving forces. With the exception of a shock to potential output growth, the response of short-term yields to macroeconomic shocks is generally stronger than that of long-term yields. Impulse responses of all bond yields are fairly persistent, which reflects the persistence of their macroeconomic driving forces. Across the whole maturity spectrum, about ninety percent of the variation in yields is explained jointly by monetary policy shocks and shocks to the natural real rate of interest; the relative contribution of the latter shock increases with time to maturity. Cost-push shocks explain at most eight percent, while shocks to the output gap play an even less important role. |
| Keywords: | affine term structure models, monetary policy, euro area |
| JEL: | E32 E43 G12 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:bubdp1:5865&r=eec |
| By: | Rina Bhattacharya |
| Abstract: | The Austrian economy has benefited substantially from the expansion of economic ties with Central and Eastern Europe, which has provided a significant boost to growth, productivity, competitiveness, profits and (more controversially) aggregate employment. Indeed, among the older EU member states, Austria has benefited the most from the transition of the Central and Eastern European countries from planned economies to market economies, and the subsequent entry into the EU of the ten new member states, mostly from Central and Eastern Europe, in 2004. However, important segments of the population in Austria, and in particular low-skilled and semi-skilled workers in the manufacturing sector, appear to have been adversely affected by these developments. There is thus a need for policy measures to help those segments of the workforce that have had difficulty coping with growing competition from Central and Eastern Europe. Furthermore, more can be done to make Austria a more attractive location for highly skilled and well qualified expatriate workers and to maintain Vienna’s position as a central hub for multinationals operating in the region. These include, in particular, the need to strengthen eastern transportation links and to reduce to a minimum bureaucratic hurdles and red tape for foreign enterprises seeking to operate out of Vienna. <P>L'intégration économique croissante de l'Autriche avec l'Europe centrale et orientale <BR>L'économie autrichienne a fortement bénéficié du développement de ses relations économiques avec l'Europe centrale et orientale, qui a sensiblement renforcé la croissance, la productivité, la compétitivité et les bénéfices des entreprises, ainsi que l'emploi total – encore que le bilan soit plus mitigé à cet égard. En fait, parmi les anciens États membres de l'Union européenne (UE), c'est l'Autriche qui a tiré le plus grand profit de la transition des pays d'Europe centrale et orientale (PECO) de l'économie planifiée vers l'économie de marché, puis de l'adhésion des dix nouveaux États membres, situés pour la plupart en Europe centrale et orientale, qui ont rejoint l'UE en 2004. Néanmoins, il semble que ces évolutions aient eu des conséquences préjudiciables sur des segments importants de la population autrichienne, en particulier sur les travailleurs peu qualifiés et semi-qualifiés du secteur manufacturier. Les pouvoirs publics doivent donc prendre des mesures pour aider les catégories de main-d'oeuvre ayant des difficultés à faire face à la concurrence croissante des PECO. En outre, les autorités peuvent déployer davantage d'efforts pour rendre le territoire autrichien plus attractif pour les travailleurs expatriés hautement qualifiés et très compétents, ainsi que pour préserver la position de Vienne en tant que plaque tournante pour les multinationales présentes dans la région. À cet égard, il serait notamment nécessaire de renforcer les voies de communication orientales, ainsi que de réduire au minimum les obstacles bureaucratiques et les formalités administratives pour les entreprises étrangères qui souhaitent faire de Vienne leur base d'opérations. |
| Keywords: | growth, globalisation, productivity, productivité, croissance, employment, emploi, intégration régionale, competitiveness, compétitivité, regional integration, mondialisation, profitability, rentabilité |
| JEL: | F15 F23 |
| Date: | 2007–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:572-en&r=eec |
| By: | Amelie Constant (Georgetown University, DIW DC and IZA); Klaus F. Zimmermann (University of Bonn, IZA and DIW Berlin) |
| Abstract: | The economic literature has largely overlooked the importance of repeat and circular migration. The paper studies this behavior by analyzing the number of exits and the total number of years away from the host country using count data models and panel data from Germany. More than 60% of migrants from the guestworker countries are indeed repeat or circular migrants. Migrants from European Union member countries, those not owning a dwelling in Germany, the younger and the older (excluding the middle ages), are significantly more likely to engage in repeat migration and to stay out for longer. Males and those migrants with German passports exit more frequently, while those with higher education exit less; there are no differences with time spent out. Migrants with family in the home country remain out longer, and those closely attached to the labor market remain less; they are not leaving the country more frequently. |
| Keywords: | repeat migration, circular migration, guestworkers, minorities, count data |
| JEL: | F22 J15 J61 C25 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2999&r=eec |
| By: | Simon Deakin |
| Abstract: | The use of reflexive forms of regulation is growing within the EU, in particular as the open method of coordination ('OMC') is applied to a growing number of contexts including employment policy, social inclusion, enterprise promotion, environmental protection, energy policy, and fundamental human rights. Company law, however, seems to be an exception to this: recent activity has taken the form of 'hard law' harmonization through directives, coupled with the stimulation of regulatory competition through judgments of the European Court of Justice in relation to freedom of movement, stemming from the Centros case. There is a very limited 'company law OMC' in the form of the deliberations of the European Corporate Governance Forum, but there is little evidence here of what proponents of the OMC call 'learning from diversity'; instead, the Forum appears to envisage the elimination of country-specific practices which it refers to as 'distortions of competition'. This paper argues that the lack of a meaningful company law OMC is likely to prove a more serious long-term obstacle to capital market integration than the persistence of inter-country variations in corporate governance practices. The example of labour law shows how functional convergence and a coordinated raising of standards can be achieved by the dovetailing of the OMC with social policy directives. By contrast, the recent failure of the Takeover Directive to impose a uniform model of takeover regulation indicates the limits of top-down modes of harmonization. At the same time, the case of labour law highlights the importance of placing the OMC within a wider framework of legal support for fundamental rights, of the kind which is capable of providing a countervailing force against court-led deregulation. |
| Keywords: | reflexive governance, company law, labour law, European Union |
| JEL: | K22 K31 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp346&r=eec |
| By: | Manuel Artís (AQR-IREA, University of Barcelona); Raúl Ramos (AQR-IREA, University of Barcelona and IZA); Jordi Suriñach (AQR-IREA, University of Barcelona) |
| Abstract: | Using microdata, we analyse the determinants of firm relocation and outsourcing decisions and their effects on firms’ employment decisions. The results for a sample of 32 countries show that both strategies have been more intense in the EU-15 countries than in the rest and that, in some cases, they have been complementary. Regarding the determinants, we have found that while some characteristics such as size, age, activity sector, main market or belonging to a group affect both decisions, other such as a higher innovation, demand sensitivity or productivity explain why some firms choose to subcontract instead of relocate. |
| Keywords: | firm relocation, outsourcing, triprobit model |
| JEL: | R30 M55 M51 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2978&r=eec |
| By: | Colm McLaughlin |
| Abstract: | There has been increasing interest of late in the question of whether minimum wage regulations can raise productivity through the 'shock effect'. This paper explores this question in comparative perspective, by examining the impact of minimum wage regulations and institutions in Denmark, New Zealand and Ireland. It argues that while they are important, a supportive institutional framework plays a far more crucial role in providing coordinated solutions to issues of market failure, such as inadequate levels of training. The paper suggests that sectoral bargaining institutions in low-paid sectors may have the potential to facilitate such coordination and enable the high-productivity model to emerge. For the UK context, this raises the question as to whether Wages Councils in a modernised form might have some future role to play. |
| Keywords: | National Minimum Wage; Low pay; Training; Productivity; Labour market coordination; Comparative employment relations. |
| JEL: | J38 J58 J80 P52 |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:cbr:cbrwps:wp342&r=eec |
| By: | Leilanie Basilio (Ruhr Graduate School in Economics); Thomas K. Bauer (RWI Essen, Ruhr-University Bochum and IZA); Mathias Sinning (RWI Essen and IZA) |
| Abstract: | This paper analyzes whether immigrant families facing credit constraints adopt a family investment strategy wherein, upon arrival, an immigrant spouse invests in host countryspecific human capital while the other partner works to finance the family's current consumption. Using data for West Germany, we do not find evidence for such a specialization strategy. We further examine the labor supply and wage assimilation of families whose members immigrated together relative to families whose members immigrated sequentially. Our estimates indicate that this differentiation is relevant for the analysis of the labor market activities of migrant households. |
| Keywords: | international migration, assimilation, family investment hypothesis |
| JEL: | D10 F22 J22 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2989&r=eec |
| By: | Olivier Bargain (University College Dublin, CHILD and IZA); Leszek Morawski (University of Warsaw); Michal Myck (DIW Berlin, IFS and IZA); Mieczyslaw Socha (University of Warsaw) |
| Abstract: | The Polish tax and benefit system is presented in the context of a recently developed microsimulation model, SIMPL. The model allows simulating direct taxes, social contributions and public benefits in Poland for the years 2003 and 2005. It is based on the Household Budgets Survey data (Badania Budzetów Gospodarstw Domowych) from 2003 and 2005. The document describes details of the Polish tax and benefit system and the simulation assumptions which were necessary in modelling it in SIMPL. We provide information on the quality of the data used in the model and some details of the validation process through various robustness checks. Finally we provide examples of application of the model for analysis of effects of policy reforms. |
| Keywords: | microsimulation, tax and benefit systems, income distribution, Poland |
| JEL: | H24 H31 I32 I38 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp2988&r=eec |
| By: | Klein Haneveld, Wim; Streutker, Matthijs; van der Vlerk, Maarten (Groningen University) |
| Abstract: | This paper discusses the implementation of new regulatory rules in a multistage recourse ALM model for Dutch pension funds. The new regulatory rules, which are called the ?Financieel Toetsingskader?, are effective as of January 2007 and have deep impact on the issues of valuation of liabilities, solvency, contribution rate, and indexation. Multistage recourse models have proved to be valuable for pension fund ALM. The ability to include the new regulatory rules would increase the practical value of these models. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:rugsom:07005&r=eec |