nep-eec New Economics Papers
on European Economics
Issue of 2008‒08‒06
thirty papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Extreme Coexceedances in New EU Member States' Stock Markets By Christiansen, Charlotte; Ranaldo, Angelo
  2. Determinants of Foreign Currency Borrowing in the New Member States of the EU By Marcel Tirpák; Christoph B. Rosenberg
  3. Globalisation and the euro area - simulation based analysis using the New Area Wide Model By Pascal Jacquinot; Roland Straub
  4. Convergence in Emerging Europe: Sustainability and Vulnerabilities By Athanasios Vamvakidis
  5. 3-Step Analysis of Public Finances Sustainability: the Case of the European Union By António Afonso; Christophe Rault
  6. The Euro adoption’s impact on extensive and intensive margins of trade: the Italian case By Sergio de Nardis; Carmine Pappalardo; Claudio Vicarelli
  7. Structural Reforms and Fiscal Discipline in Europe. By Alessandro Girardi; Paolo Paesani
  8. Resolving a Large Contingent Fiscal Liability: Eastern Europe Experience By Mark J Flanagan
  9. Forecasting inflation and tracking monetary policy in the euro area - does national information help? By Riccardo Cristadoro; Fabrizio Venditti; Giuseppe Saporito
  10. Spatial effects of open borders on the Czech labour market By Moritz, Michael
  11. Price Stability and the ECB'S monetary policy strategy By Christian Bordes; Laurent Clerc
  12. Theories of fiscal federalism and the European experience By Alberto Majocchi
  13. EU regulation concerning genetically modified products: an issue of food security or a measure of disguised protectionism? By Rui J. Lopes; Ana Santos; Jos‚ Caetano
  14. Managing Migration through Quotas: an Option-theory Perspective By Michele Moretto; Sergio Vergalli
  15. SHORT-TERM CO2 Abatement in the European Power Sector By Erik D. Delarue; A. Denny Ellerman; William D. D’haeseleer
  16. Germany's Corporate Governance Reforms: Has the System Become Flexible Enough? By Jürgen Odenius
  17. The Information Content of Money in Forecasting Euro Area Inflation By Helge Berger; Emil Stavrev
  18. Measuring well-being across Europe: Description of the ESS Well-being Module and preliminary findings By Felicia A. Huppert; Nic Marks; Andrew E. Clark; Johannes Siegrist; Alois Stutzer; Joar Vittersø; Morten Wahrendorf
  19. Lay people’s Europe: A Critical Assessment of the First EU Citizens’ Conferences By Boussaguet, Laurie; Dehousse, Renaud
  20. Measuring Service Quality: The Opinion of Europeans about Utilities By P. A. Ferrari; S. Salini
  21. Immigration and Trade in Portugal: A Static and Dynamic Panel Data Analysis By Horácio C. Faustino; Nuno Carlos Leitão
  22. The ECB’s Monetary Analysis Revisited By Helge Berger; Emil Stavrev; Thomas Harjes
  23. A pairwise comparison of the effectiveness of selected active labour market programmes in Germany By Stephan, Gesine; Pahnke, Andre
  24. Do Women Pay More for Credit? Evidence from Italy By Alberto F. Alesina; Francesca Lotti; Paolo Emilio Mistrulli
  25. The Determinants of Suppliers’ Performance in E-Procurement: Evidence from the Italian Government’s E-Procurement Platform By Gian Luigi Albano; Federico Dini; Roberto Zampino; Marta Fana
  26. The Intergenerational Transmission of Income and Education: A Comparison of Japan and France By Arnaud LEFRANC; Fumiaki OJIMA; Takashi YOSHIDA
  27. Experimental Evidence on the Nature of the Danish Employment Miracle By Rosholm, Michael
  28. Graduate Employment in the UK: An Application of the Gottschalk-Hansen Model By Grazier, Suzanne; O'Leary, Nigel C.; Sloane, Peter J.
  29. The information content of KOF indicators on Swiss current account data revisions By Jan P.A.M. Jacobs; Sturm Jan-Egbert
  30. Report on Informal Employment in Romania By Jante Parlevliet; Theodora Xenogiani

  1. By: Christiansen, Charlotte (University of Aarhus); Ranaldo, Angelo (Swiss National Bank)
    Abstract: We analyze the financial integration of the new European Union (EU) member states' stock markets using the negative (positive) coexceedance variable that counts the number of large negative (large positive) returns on a given day across the countries. We use a multinomial logit model to investigate how persistence, asset classes, and volatility are related to the coexceedance variables. We find that the effects differ (a) between negative and positive coexceedance variables (b) between old and new EU member states, and (c) before and after the EU enlargement in 2004 suggesting a closer connection of new EU stock markets to those in Western Europe.
    Keywords: Financial market integration; Comovement; Emerging markets; EU enlargement: EU Member States; Extreme returns; L New EU Member States; Stock Markets
    JEL: C25 F36 G15
    Date: 2008–06–27
  2. By: Marcel Tirpák; Christoph B. Rosenberg
    Abstract: The paper investigates the determinants of foreign currency borrowing by the private sector in the new member states of the European Union. We find that striking differences in patterns of foreign currency borrowing between countries are explained by the loan-to-deposit ratios, openness, and the interest rate differential. Joining the EU appears to have played an important role, by providing direct access to foreign funding, offering hedging opportunities through greater openness, lending credibility to exchange rate regimes, and raising expectations of imminent euro adoption. The empirical evidence suggests that regulatory policies to slow foreign currency borrowing have had only limited success.
    Keywords: Europe , European Union , External borrowing , Private sector , Foreign investment , Exchange rate regimes , Euro ,
    Date: 2008–07–18
  3. By: Pascal Jacquinot (Directorate General Research, Econometric Modelling, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Roland Straub (Directorate General International and European Relations, International Policy Analysis, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.)
    Abstract: In this paper, we utilise the multi-country version of the NAWM to analyse the impact of globalisation on euro area macroeconomic aggregates. We provide alternative modelbased definitions of globalisation associated with an increase in potential output in emerging Asia and its impact on total factor productivity in the euro area, and a shift in international specialisation patterns leading to changes in relative demand and import substitutions. The results indicate that globalisation has a positive impact on output, consumption, investment and real labour income in the long-run. This impact is driven by the improvement in the terms of trade and associated positive wealth effects, as well as by spillovers of higher potential output in emerging Asia on euro area total factor productivity. Additionally, we provide evidence that structural reforms in goods and labour markets would amplify the benefits associated with globalisation. JEL Classification: E32, E62.
    Keywords: DSGE modelling, globalisation, euro area.
    Date: 2008–06
  4. By: Athanasios Vamvakidis
    Abstract: The emerging European economies have been converging rapidly towards the more advanced European economies in recent years. However, large external imbalances in parts of the region have raised questions about sustainability and concerns about vulnerabilities. Empirical evidence in this paper suggest that the convergence trend of emerging Europe is based on strong fundamentals and is expected to continue, but at a slower pace. Moreover, the convergence path may be volatile as countries with large external imbalances adjust, with risks of a hard landing in some cases.
    Keywords: Europe , Emerging markets , Transition economies , Balance of payments , Economic growth , Current account balances , External debt ,
    Date: 2008–07–21
  5. By: António Afonso; Christophe Rault
    Abstract: We use a 3-step analysis to assess the sustainability of public finances in the EU27. Firstly, we perform the SURADF specific panel unit root test to investigate the meanreverting behaviour of general government expenditure and revenue ratios. Secondly, we apply the bootstrap panel cointegration techniques that account for the time series and cross-sectional dependencies of the regression error. Thirdly, we check for a structural long-run equation between general government expenditures and revenues via SUR analysis. While results imply that public finances were not unsustainable for the EU panel, fiscal sustainability is an issue in most countries, with a below unit estimated coefficient of expenditure in the cointegration relation with revenue as the dependent variable.
    Keywords: fiscal sustainability; EU; panel cointegration.
    JEL: C23 E62 H62
    Date: 2008–06
  6. By: Sergio de Nardis (ISAE - Institute for Studies and Economic Analyses); Carmine Pappalardo (ISAE - Institute for Studies and Economic Analyses); Claudio Vicarelli (ISAE - Institute for Studies and Economic Analyses)
    Abstract: The recent theoretical literature has focused on the importance of extensive and intensive margins of trade in the case of the Euro adoption. But few works have investigated the effects of the euro introduction on the extensive and intensive margins of trade. All these studies have used disaggregated bilateral flows data (6 digit). However, not even the finest level of disaggregation in the publicly available trade data is enough to single out individual products. We try to fill this gap by using a unique dataset taken from ISAE surveys on Italian manufacturing firms. From this quarterly survey it is possible to obtain information about both the structural characteristics (geographical location, industrial sector of activity, number of employees) and exporting behaviour of firms. We concentrate our analysis on the period 1997-2001, covering the two years before and the three years after the euro introduction., In line with large part of the empirical literature on bilateral trade, we estimate a gravity equation using a Hausman and Taylor estimator (HT). Our results show that the introduction of the euro has not had any effect on export turnover. This evidence seems to match other empirical findings on Italy, both at aggregate and sectoral level. However, interaction terms between the euro dummy and the group of “entering firms” (firms that started to export after the euro introduction) and that of “persistent firms” (firms that exported in the euro area before and after 1999) are positive and statistically significant, showing a positive effect of the common currency on extensive and intensive margins of trade. Indeed, the magnitude of the coefficient of the former is higher than the latter: in the Italian case, empirical findings for the Euro area as a whole seem to be confirmed. In our view, the euro introduction has had a positive effect on the extensive margin: a small group of firms benefited from it by starting to export in the Eurozone market. However, the total size of this group is very small; this finding may be due to the average small size of Italian manufacturing firms and to their scarce presence in the ICIR sectors (Imperfect Competition and Increasing Return sectors). Following theoretical indications, these latter are sectors that may have benefited more from the euro introduction: firms usually have lower marginal costs and they can easily cover the fixed costs of export activity if these costs are reduced, as they are when a common currency is introduced.
    Keywords: Trade, Euro, Export Margins
    JEL: F14 F15 C23
    Date: 2008–07
  7. By: Alessandro Girardi (ISAE - Institute for Studies and Economic Analyses and University of Rome Tor Vergata); Paolo Paesani (University of Rome Tor Vergata)
    Abstract: The global slowdown has tested the effectiveness of the European institutional frameworks in supporting both stability and growth which led to a number of proposals for reform regarding the institutional design of the European Union and on the relationship between the goal of fiscal discipline and the plan of structural reforms. This paper aims at collecting and summarising recent contributions on the effectiveness of the institutional framework operating in Europe to fulfil the objectives declared in the Lisbon Agenda under the fiscal constraints established in the Stability and Growth Pact.
    Keywords: European institutional frameworks, Stability and Growth Pact, Lisbon Strategy.
    JEL: F14 F15 C23
    Date: 2008–07
  8. By: Mark J Flanagan
    Abstract: On occasion, a government may find itself confronted with a need to address a large contingent or off balance sheet fiscal liability. Implementing a settlement raises issues of fiscal sustainability and macroeconomic stability. This paper surveys the key design issues, and draws lessons from recent Eastern European experience. It then considers in more detail the particular case of Ukraine, and how it might approach its own large contingent liability-the so-called lost savings-which at end-2007 amounted to as much as 18 percent of GDP.
    Keywords: Eastern Europe , Balance of payments deficits , Budget deficits , Fiscal sustainability , Debt management , Fiscal stability , Ukraine ,
    Date: 2008–07–02
  9. By: Riccardo Cristadoro (Banca d’Italia, Research Department, via Nazionale 91, I – 00184 Rome, Italy.); Fabrizio Venditti (Banca d’Italia, Research Department, via Nazionale 91, I – 00184 Rome, Italy.); Giuseppe Saporito (Banca d’Italia, Research Department, via Nazionale 91, I – 00184 Rome, Italy.)
    Abstract: The ECB objective is set in terms of year on year growth rate of the Euro area HICP. Nonetheless, a good deal of attention is given to national data by market analysts when they try to anticipate monetary policy moves. In this paper we use the Generalized Dynamic Factor model to develop a set of core inflation indicators that, combining national data with area wide information, allow us to answer two related questions. The first is whether country specific data actually bear any relevance for the future path of area wide price growth, over and above that already contained in area wide data. The second is whether in order to track ECB monetary policy decisions it is useful to take into account national information and not only area wide statistics. In both cases our findings point to the conclusion that, once area wide information is properly taken into account, there is little to be gained from considering national idiosyncratic developments. JEL Classification: C25, E37, E52.
    Keywords: Forecasting, dynamic factor model, inflation, Taylor rule, monetary policy.
    Date: 2008–06
  10. By: Moritz, Michael (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "Hardly noticed in Western Europe the fall of the Iron Curtain had also effects on the regional structures of the labour markets in the Central and Eastern European Countries (CEEC). I analyse whether during the undoubtedly increasing integration of markets the Czech border region close to the Western European high-wage countries benefited from its geographical position. Even without transnational free labour mobility, free trade and outsourcing of production activities can lead to shifts in the labour demand and wage structure with respect to different skill groups. These integration effects should be stronger in border regions. Using data from the Czech Microcensus and quarterly district level data, I investigate the impact of the fall of the Iron Curtain on the regional differences in unemployment, the skill structure of employment and wages in the Czech Republic. According to my results there are no indications of disproportionate shifts in the economic structure as well as in the skill structure in the Czech districts neighbouring Bavaria and Austria compared to non-border districts. However, regarding wage differentials between workers employed in the border region and workers in the rest of the country, I find evidence that between 1996 and 2002 the border region workers of the lowest skill category exhibit a positive wage differential of around 12% compared to their counterparts in non-border districts. For all other skill groups in the border region the spatial wage gap is negative and, in absolute value, increases with the skill level." (author's abstract, IAB-Doku) ((en))
    Date: 2008–07–31
  11. By: Christian Bordes (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Laurent Clerc (Direction de la Recherche - Banque De France - Banque de France)
    Abstract: This paper focuses on the price stability objective within the framework of the single monetary policy strategy. It starts by reviewing what this objective, which is common to all central banks, means. Second, this paper focuses exclusively on the anchoring of short- to medium-term inflation expectations (Part 2). Several measures show that this anchoring is effective. A 'two-pillar' small structural macro-economic model framework is used to analyze the impact that this anchoring of expectations has on the determination of the short- to medium-term inflation rate. From this point of view, observed inflation in the euro area seems to be in line with the theory and the ECB's action seems to be very effective. Third, we focus on the other aspect of monetary stability: the degree of price-level uncertainty and the anchoring of inflation expectations in the medium to long term. Even though this assessment is more difficult than it is in the short to medium term, since we only have a track record covering 6 years, various indicators from the theoretical analysis paint a fairly reassuring picture of the effectiveness of the device used by the ECB.
    Keywords: European Central Bank • Inflation • Monetary policy
    Date: 2007–03–20
  12. By: Alberto Majocchi (ISAE - Institute for Studies and Economic Analyses and University of Pavia)
    Abstract: In the European experience it appears to be a significant deviation from Oates’s theoretical model since the Maastricht Treaty has not assumed as necessary to transfer the direct management of stabilization policy to the supranational level. Stabilization policy is in fact managed by member-states, although its coordination is to be ensured at supranational level. In the field of redistribution, the European level must undertake territorial redistribution so that equalizing transfers ensure that all areas of the European Union offer equal opportunities and certain basic services are furnished uniformly. The member-states and local communities, for their part, must maintain their responsibilities for the management of social policy and the redistribution of personal income – according to the preferences of each community – while averting the perverse effects in terms of mobility envisaged by the theoretical model of fiscal federalism.
    Keywords: Fiscal federalism
    JEL: H70
    Date: 2008–07
  13. By: Rui J. Lopes; Ana Santos (Universidade de vora); Jos‚ Caetano (CEFAGE-UE, Centro de Estudos e Forma‡Æo Avan‡ada em GestÆo e Economia, Universidade de vora)
    Abstract: The biggest producers and exporters of agricultural products have been adopting the genetic engineering in order to improve the factors productivity and the firms profits In the last decade, the United States of America (US) and the European Union (EU) have established a high divergent regulation on production, distribution and consumption of genetically modified organisms (GMOs). Apparently, the EUïs complex legislative framework related to GMOs was intend to satisfy the European consumers which are concerned about food safety and whish to make more informed choice about the food they eat. The aim of this paper is to understand the potential motivations behind the different policies on GM products adopted by US and EU.
    Keywords: Genetically Modified Organisms; Consumers preferences; Food security; Technical barriers to trade.
    JEL: F13 Q17 Q18
    Date: 2008
  14. By: Michele Moretto (University of Padua); Sergio Vergalli (University of Brescia)
    Abstract: Recent European Legislation on immigration has revealed a particular paradox on migration policies. On the one hand, the trend of recent legislation points to the increasing closure of frontiers (OECD 1999, 2001,2004), also by using immigration quotas. On the other hand, there is an increase of regularization, i.e., European policies are becoming less tight. Our aim here is to study these counterbalanced and opposite policies in European immigration legislation in a unified framework . To do this, we have used a real option approach to migration choice that assumes that the decision to migrate can be described as an irreversible investment decision where quotas represent an upper bound limit. Our results show that the paradox of counterbalancing immigration policies is not odd but it could be in line with an optimal policy to control migration inflow. In particular, we show that if the government controls the information related to the immigration quota system it could delay the mass entry of immigrants maintaining, in the long run, the required immigration stock and controlling the flows in the short-run.
    Keywords: Immigration, Real Option, Quota System
    JEL: F22 J61 O15 R23
    Date: 2008–06
  15. By: Erik D. Delarue; A. Denny Ellerman; William D. D’haeseleer
    Abstract: This paper focuses on the possibilities for short term abatement in response to a CO2 price through fuel switching in the European power sector. The model E-Simulate is used to simulate the electricity generation in Europe as a means of both gaining insight into the process of fuel switching and estimating the abatement in the power sector during the first trading period of the European Union Emission Trading Scheme. Abatement is shown to depend not only on the price of allowances, but also and more importantly on the load level of the system and the ratio between natural gas and coal prices. Estimates of the amount of abatement through fuel switching are provided with a lower limit of 35 million metric tons in 2005 and 19 Mtons in 2006.
    Date: 2008–06
  16. By: Jürgen Odenius
    Abstract: This article reviews Germany's corporate governance system and the effectiveness of recent reforms. Since the early 1990s far-reaching reforms have complemented the traditional stakeholder system with important elements of the shareholder system. Instead of taking a view on the superiority of either system, this article raises the important question whether these reforms created sufficient flexibility for the market to optimize its corporate governance structure within well established social and legal norms. It concludes that there is scope for enhancing flexibility in three core areas, relating to (i) internal control mechanisms, especially the flexibility of board structures; (ii) self-dealing; and (iii) external control, particularly take-over activity.
    Keywords: Germany , Corporate governance , Economic reforms , Securities regulations ,
    Date: 2008–07–18
  17. By: Helge Berger; Emil Stavrev
    Abstract: This paper contributes to the debate on the role of money in monetary policy by analyzing the information content of money in forecasting euro-area inflation. We compare the predictive performance within and among various classes of structural and empirical models in a consistent framework using Bayesian and other estimation techniques. We find that money contains relevant information for inflation in some model classes. Money-based New Keynesian DSGE models and VARs incorporating money perform better than their cashless counterparts. But there are also indications that the contribution of money has its limits. The marginal contribution of money to forecasting accuracy is often small, money adds little to dynamic factor models, and it worsens forecasting accuracy of partial equilibrium models. Finally, non-monetary models dominate monetary models in an all-out horserace.
    Keywords: Working Paper , Euro Area , Money , Inflation , Forecasting models , Monetary policy , Economic models ,
    Date: 2008–07–09
  18. By: Felicia A. Huppert; Nic Marks; Andrew E. Clark; Johannes Siegrist; Alois Stutzer; Joar Vittersø; Morten Wahrendorf
    Abstract: It has become customary to judge the success of a society through the use of objective indicators, predominantly economic and social ones. Yet in most developed nations, increases in income, education and health have arguably not produced comparable increases in happiness or life satisfaction. While much has been learned from the introduction of subjective measures of global happiness or life satisfaction into surveys, significant recent progress in the development of high-quality subjective measures of personal and social well-being has not been fully exploited. This paper describes the development of a set of well-being indicators which were included in Round 3 of the European Social Survey. This well-being Module seeks to evaluate the success of European countries in promoting the personal and social well-being of their citizens. In addition to providing a better understanding of domain-specific measures, such as those relating to family, work and income, the design of the Well-being Module recognises that advancement in the field requires us to look beyond measures which focus on how people feel (happiness, pleasure, satisfaction) to measures which are more concerned with how well they function. This also shifts the emphasis from relatively transient states of well-being to measures of more sustainable well-being. The ESS Well-being Module represents one of the first systematic attempts to create a set of policy-relevant national well-being accounts.
    Date: 2008
  19. By: Boussaguet, Laurie; Dehousse, Renaud
    Abstract: Citizens’ conferences attempt to include citizens in the decisional and political process. Created to foster deliberation and public debate on disputed issues, they place ordinary citizens in the spotlight and ask them to express their views, after having debated the issues with specialists. Whereas the conferences conducted in a domestic context have been well analyzed, little attention has been given so far to the first attempts to replicate the experience at the European level, and to the specific problems that may be encountered in so doing. Two main reasons have prompted the EU to pay interest to this participatory mechanism: functional reasons (the need to take position on a socio-technological controversy whose stakes are controversial) and political legitimacy (the absence of a strong democratic legitimacy at the EU level). Based on an analysis of the first two experiments organized in the EU, devoted to “the city of tomorrow” and to brain sciences respectively, this article argues that achieving such citizen deliberation is not without problems. In many respects, these problems point to the difficulty entailed in the creation of a European public space: the elusive quest for a “European people”; the question of representation according to the size of the countries; the issue of languages. At the same time, the main potential of this instrument may lie in its cognitive impact, since the interpretations and knowledge surrounding the issues which are debate may influence both the agenda-setting and the decision-making process.
    Keywords: participation; deliberative democracy; policy analysis
    Date: 2008–07–21
  20. By: P. A. Ferrari (University of Milan); S. Salini (University of Milan)
    Abstract: This paper provides a comparative analysis of statistical methods to evaluate the consumer perception about the quality of Services of General Interest. The evaluation of the service quality perceived by users is usually based on Customer Satisfaction Survey data and an ex-post evaluation is then performed. Another approach, consisting in evaluating Consumers preferences, supplies an ex-ante information on Service Quality. Here, the ex-post approach is considered, two non-standard techniques - the Rasch Model and the Nonlinear Principal Component Analysis - are presented and the potential of both methods is discussed. These methods are applied on the Eurobarometer Survey data to assess the consumer satisfaction among European countries and in different years.
    Keywords: Service Quality, Eurobarometer, Non Linear Principal Component Analysis, Rasch Analysis, Conjoint Analysis
    JEL: C33 C35 C43 L94 L95 L96
    Date: 2008–04
  21. By: Horácio C. Faustino; Nuno Carlos Leitão
    Abstract: This article tests the relation between immigration and Portuguese bilateral trade, considering the fifteen European partners (EU15). Using a static and dynamic panel data analysis, the results show that the stock of immigrants has a positive effect on Portuguese exports, imports and bilateral intra-industry trade. These results suggest that immigration affects all types of trade in a positive way. The underlying assumption is that immigration contributes to decrease the costs of transactions, which in turn promotes all trade flows. The static and dynamic results do not confirm the hypothesis of a negative effect of immigration on Portuguese exports. In the static model, a 10% increase in immigration induces a 5.98 % increase in exports and a 5.55% increase in imports. The effect on the Portuguese trade balance is positive. However, the dynamic results for the export and import equations are more reliable, showing a smaller positive effect on exports. A 10% increase in bilateral immigration induces a 0.47% and 2.34% increase in exports and imports, respectively. Our findings also suggest that when immigrants to Portugal originate from a Latin partner-country, the effects on trade are stronger than in the case of immigrants from non-Latin countries. The study is based on an extended gravitational model, in order to incorporate the qualitative factors as control variables.
    Keywords: intra-industry trade; immigration; gravity model; panel data; Portugal.
    JEL: C33 F11 F12 F22
    Date: 2008–07
  22. By: Helge Berger; Emil Stavrev; Thomas Harjes
    Abstract: Monetary aggregates continue to play an important role in the ECB's policy strategy. This paper revisits the case for money, surveying the ongoing theoretical and empirical debate. The key conclusion is that an exclusive focus on non-monetary factors alone may leave the ECB with an incomplete picture of the economy. However, treating monetary factors as a separate matter is a second-best solution. Instead, a general-equilibrium inspired analytical framework that merges the economic and monetary "pillars" of the ECB's policy strategy appears the most promising way forward. The role played by monetary aggregates in such unified framework may be rather limited. However, an integrated framework would facilitate the presentation of policy decisions by providing a clearer narrative of the relative role of money in the interaction with other economic and financial sector variables, including asset prices, and their impact on consumer prices.
    Keywords: European Central Bank , Monetary policy , Central bank policy , Economic models , Asset prices , Consumer prices , Financial sector , Money ,
    Date: 2008–07–10
  23. By: Stephan, Gesine (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Pahnke, Andre (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "For Germany, our study estimates average effects of further vocational training, short training and job creation schemes on the employment prospects of participants. We compare participation in each programme with non-participation as well as with participation in one of the other programmes. Outcome variables are cumulated days spent in regular employment during the 3.5 years after programme start as well as the share in regular employment at the end of the observation period. First, our results show rather favourable effects of participation in further vocational training programmes and in short firm-internal training - but not of participation in job creation schemes - on the employment prospects of participants. Second, as a result of shorter lock-in effects, shorter programmes perform mostly better when estimating programme effects on days in cumulated employment. However, regarding shares in regular employment at the end of the observation period, in particular long retraining shows positive effects compared to shorter programmes." (author's abstract, IAB-Doku) ((en))
    Keywords: arbeitsmarktpolitische Maßnahme - Erfolgskontrolle, Weiterbildung, Trainingsmaßnahme, Arbeitsbeschaffungsmaßnahme, Umschulung, Arbeitsmarktchancen, Teilnehmer, Beschäftigungsdauer, arbeitsmarktpolitische Maßnahme - Dauer
    JEL: J68 J64 J65
    Date: 2008–07–29
  24. By: Alberto F. Alesina; Francesca Lotti; Paolo Emilio Mistrulli
    Abstract: The answer is yes. By using a unique and large data set on overdraft contracts between banks and microfirms and self-employed individuals, we find robust evidence that women in Italy pay more for overdraft facilities than men. We could not find any evidence that women are riskier then men. The male/female differential remains even after controlling for a large number of characteristics of the type of business, the borrower and the market structure of the credit market. The result is not driven by women using a different type of bank than men, since the same bank charges different rates to male and female borrowers. Social capital does play a role: high levels of trust loosen credit conditions by lowering interest rates, but this benefit is not evenly distributed, as women benefit from increased social capital less than men.
    JEL: G21 J16 J71
    Date: 2008–07
  25. By: Gian Luigi Albano (Italian Public Procurement Agency (Consip S.p.A.)); Federico Dini (Italian Public Procurement Agency (Consip S.p.A.)); Roberto Zampino (Italian Public Procurement Agency (Consip S.p.A.) and University of Bari); Marta Fana (University of Rome “Tor Vergata”)
    Abstract: Participation of small businesses in the market for public contracts is widely recognized as a key policy issue. It is also commonly held that the adoption of e-procurement solutions can be effective in pursuing such an objective. To this end, we analyze the transactions completed in the period 2004-2007 through the Italian Government’s e-procurement platform, that is, the marketplace managed by the Italian Public Procurement Agency (Consip S.p.A.). Although descriptive statistics indicate that micro suppliers are the most represented group of firms in the marketplace, our econometric treatment provides some evidence that the former are less successful than all other suppliers in getting public contracts. Degree of loyalty with buyers, location and the use of other MEPA negotiation tools, also emerge as relevant factors of success in the e-procurement market.
    Keywords: E-Procurement, Small Suppliers, Request For Quotations, Performance, Public Contracts, Count Data
    JEL: D44 H57 C16 C25 L25
    Date: 2008–06
  26. By: Arnaud LEFRANC; Fumiaki OJIMA; Takashi YOSHIDA
    Abstract: The paper compares the extent of intergenerational earnings and educational correlation in Japan and France. It uses very similar repeated surveys that provide information on educational attainment and family background, conducted in Japan and France. To insure comparability, similar sample restrictions and specifications are imposed. For Japan, we use waves 1965, 1975, 1985, 1995 and 2005. For France, we use waves 1965, 1970, 1977, 1985, 1993 and 2003. Intergenerational elasticity in years of education can be readily estimated using available information. On the other hand, intergenerational earnings elasticity cannot be directly measured given the lack of information on parental income in both surveys. This leads us to apply Bjorklund and Jantti (1999) two sample instrumental variables estimation strategy. Lastly, we discuss to what extent differences in earnings mobility is related to differences in educational mobility and to differences in returns to education between the two countries.
    Keywords: intergenerational mobility; earnings education; Japan; France; education Japan France.
    Date: 2008–07–17
  27. By: Rosholm, Michael (Aarhus School of Business)
    Abstract: This paper uses a social experiment in labour market policy – providing early and intensive monitoring and programme participation in unemployment spells – to assess the nature of labour market policy effectiveness. The experiment was conducted in two counties in Denmark during the winter of 2005-6. The treatment consisted of a dramatic intensification of labour market policies. The results show that the intensification of labour market policies is highly effective, leading to increases in the exit rate from unemployment ranging from 20 to 40%. When introducing time-varying indicators for the various specific treatments actually prescribed to the unemployed workers, none of those treatments have a positive effect on the exit rate from unemployment, neither during the week in which the activity takes place, nor after the activity is completed. However, when the estimated risk of participating in an activity is included as an explanatory variable, it removes the difference in job-finding rates between treatment and control groups completely in one of the counties, and reduces it dramatically and renders it insignificant in the other county. The interpretation we attach to these results is the following; since individual treatments do not appear to be effective per se, but the risk of treatment is, it must be that the intensification of the policy regime increases the job-finding rate of unemployed workers.
    Keywords: treatment effect, labour market policy regime, social experiment, threat effect, duration model
    JEL: J64 J65 J68
    Date: 2008–07
  28. By: Grazier, Suzanne (University of Wales, Swansea); O'Leary, Nigel C. (University of Wales, Swansea); Sloane, Peter J. (University of Wales, Swansea)
    Abstract: There is an apparent inconsistency in the existing literature on graduate employment in the UK. While analyses of rates of return to graduates or graduate markups show high returns, suggesting that demand has kept up with a rapidly rising supply of graduates, the literature on over-education suggests that many graduates are unable to find employment in graduate jobs and the proportion over-educated has risen over time. Using a simple supply and demand model applied to UK data that defines graduate jobs in terms of the proportion of graduates and/or the graduate earnings markup within occupations, we find that the employment of graduates in non-graduate jobs has declined over time. Hence, there is no evidence of an over-production of graduates in the UK.
    Keywords: employment, wages, education, graduates
    JEL: I2 J0 J3
    Date: 2008–07
  29. By: Jan P.A.M. Jacobs (University of Groningen, CAMA, CIRANO); Sturm Jan-Egbert (KOF Swiss Economic Institute, ETH Zurich, Switzerland and CESifo, Germany)
    Abstract: This paper analyses revisions of Swiss current account data, taking into account the actual data revision process and the implied types of revisions. In addition we investigate whether the first release of current account data can be improved upon by the use of survey re- sults as gathered by the KOF Swiss Economic Institute, ETH Zurich. An answer in the affirmative indicates that it is possible to improve first releases and thereby enhance the current assessment of the Swiss economy.
    Keywords: current account statistics, real-time analysis, data revisions
    JEL: C22 C53 C82
    Date: 2008–07
  30. By: Jante Parlevliet; Theodora Xenogiani
    Abstract: Informal employment is one of the key features of the Romanian labour market and the main concerns of the Romanian government. Informal employment is not new in Romania. This study attempts to shed light on the issue of informal work in Romania.
    Keywords: public policy, social protection, informal employment
    JEL: E26 J18 O17
    Date: 2008–07

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