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on European Economics |
| By: | Guglielmo Maria Caporale; Alessandro Girardi |
| Abstract: | This paper analyses the dynamic effects of fiscal imbalances in a given EMU member state on the borrowing costs of other countries in the euro area. The estimation of a multivariate, multi-country time series model (specifically a Global VAR, or GVAR) using quarterly data for the EMU period suggests that euro-denominated government yields are strongly linked with each other. However, financial markets seem to be able to discriminate among different issuers. Consequently, fiscal imbalances in Italy and in other peripheral countries should be closely monitored by their EMU partners and the European institutions. |
| Keywords: | Global VAR methodology, fiscal spillovers, euro area, public debt |
| JEL: | C32 E62 F42 H63 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1164&r=eec |
| By: | European Commission (European Commission) |
| Abstract: | Fiscal sustainability and economic growth are key concerns at the current juncture. The focus of tax policy has now shifted away from stimulus measures towards a much needed consolidation of public finances, made even more necessary in light of the difficulties currently faced by some Member States in refinancing their sovereign debt. At the same time, tax policies may play an important role in enhancing the growth potential of the EU economy, which is a goal per se but also a condition for making public finance sustainable. A growth-friendly tax structure is particularly important to cope with today's policy challenges. As a background for the analysis, the 2011 issue of the report ‘Tax reforms in EU Member States’, subtitled this year as ‘Tax policy challenges for economic growth and fiscal sustainability’, provides an overview of recent trends in tax revenues and of tax measures adopted in Member States in 2010 and the first half of 2011. In addition to these descriptive chapters, this year's report provides an analytical focus on two topics of particular relevance at the current juncture. The first analytical chapter of the report addresses the multi-faceted concept of the quality of taxation – particularly relevant for any future tax reforms – with a particular focus on the tax structure. A ‘good’ tax system should design taxes so as to reduce distortions to the minimum possible and, where appropriate, correct market failures. Well-designed tax reforms promoting employment and growth can go hand in hand with social equity. To avoid adverse interaction between cross-country tax systems, tax policies should benefit from an efficient coordination at the EU level. The second analytical chapter discusses three types of potential challenges in the area of tax policy currently faced by EU Member States: (i) addressing severe fiscal consolidation challenges also on the revenue side, (ii) making the overall tax structure more growth friendly and (iii) improving the design of the tax system for individual types of taxes. Applying an indicator-based approach, the report identifies in which euro-area Member States higher tax revenues might potentially contribute to consolidation and which countries might benefit from a shift from labour taxes, in particular those bearing on vulnerable groups, to consumption and real estate taxes. Analysing more specific horizontal challenges related to the design of individual taxes, the report concludes that almost all euro-area Member States face at least one challenge. |
| Keywords: | financial crisis, tax policy, taxation, fiscal consolidation |
| JEL: | H21 H22 H23 H25 H27 H62 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:tax:taxpap:0028&r=eec |
| By: | Benjamin Elsner (Institute for International Integration Studies, Trinity College Dublin); |
| Abstract: | This paper studies the impact of a large emigration wave on real wages in the source country. Following EU enlargement in 2004, a large share of the workforce of the Central and Eastern Europe emigrated to Western Europe. Using data from Lithuania for the calibration of a factor demand model I show that emigration had a significant short-run impact on real wages in the source country. In particular, emigration led to a change in the wage distribution between young and old workers. The wages of young workers increased by 6%, whereas the wages of old workers decreased by around 1%. On the contrary, I find no effect on the wage distribution between workers of different education levels. |
| Keywords: | Emigration, EU Enlargement, European Integration, Wage Distribution |
| JEL: | F22 J31 O15 R23 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:iis:dispap:iiisdp379&r=eec |
| By: | Robert Anderton (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Aidan Meyler (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Luca Gattini (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Mario Izquierdo (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Valerie Jarvis (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Ri Kaarup (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Magdalena Komzakova (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Bettina Landau (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Matthias Mohr (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Adrian Page (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); David Sondermann (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); Philip Vermeulen (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main); David Cornille (National Bank of Belgium, boulevard de Berlaimont 14, 1000 Brussels, Belgium.); Tsvetan Tsalinski (Bulgarian National Bank, 1, Knyaz Alexander ? Sq., 1000 Sofia, Bulgaria.); Zornitsa Vladova (Bulgarian National Bank, 1, Knyaz Alexander ? Sq., 1000 Sofia, Bulgaria.); Christin Hartmann (Deutsche Bundesbank, Wilhelm-Epstein-Straße 14, 60431 Frankfurt am Main, Germany.); Harald Stahl (Deutsche Bundesbank, Wilhelm-Epstein-Straße 14, 60431 Frankfurt am Main, Germany.); Suzanne Linehan (Central Bank and Financial Services Authority of Ireland,Dame Street, Dublin 2, Ireland.); Hiona Balfoussia (Bank of Greece, 21, E. Venizelos Avenue, P. O. Box 3105, GR-10250 Athens, Greece.); Stelios Panagiotou (Bank of Greece, 21, E. Venizelos Avenue, P. O. Box 3105, GR-10250 Athens, Greece.); María de los Llanos Matea (Banco de España, Alcalá 50, E-28014 Madrid, España.); Luis J. Alvarez (Banco de España, Alcalá 50, E-28014 Madrid, España.); Pierre-Michel Bardet-Fremann (Banque de France, 39, rue Croix-des-Petits-Champs, F-75049 Paris Cedex 01, France.); Nicoletta Berardi (Banque de France, 39, rue Croix-des-Petits-Champs, F-75049 Paris Cedex 01, France.); Patrick Sevestre (Banque de France, 39, rue Croix-des-Petits-Champs, F-75049 Paris Cedex 01, France.); Emanuela Ciapanna (Banca d’Italia, Via Nazionale 91, I-00184 Rome, Italy.); Concetta Rondinelli (Banca d’Italia, Via Nazionale 91, I-00184 Rome, Italy.); Demetris Kapatais (Central Bank of Cyprus, 80, KENNEDY AVENUE, CY-1076 NICOSIA, Cyrpus); Eric Walch (Banque centrale du Luxembourg; 2, boulevard Royal; L-2983 Luxembourg, Luxembourg.); Patrick Lünnemann (Banque centrale du Luxembourg; 2, boulevard Royal; L-2983 Luxembourg, Luxembourg.); Sandra Zerafa (Central Bank of Malta, Pjazza Kastilja, Valletta, VLT 1060, MALTA.); Christopher Pace (Central Bank of Malta, Pjazza Kastilja, Valletta, VLT 1060, MALTA.); Jasper Kieft (De Nederlandsche Bank, Westeinde 1, 1017 ZN Amsterdam, the Netherlands.); Friedrich Fritzer (Oesterreichische Nationalbank, Otto-Wagner-Platz 3, POB-61, A-1011 Vienna, Austria.); Fatima Cardoso (Banco de Portugal, Av. Almirante Reis, 71 – 8°, 1150-012 Lisboa, Portugal.); Mateja Gabrijelcic (BANK OF SLOVENIA, Slovenska 35, 1505 Ljubljana, Slovenija); Branislav Karma (Narodna banka Slovenska, Imricha Karvasa 1, 813 25 Bratislava); Jarkko Kivistö (Bank of Finland, P.O. Box 160, FI-00101 Helsinki, Finland.) |
| Abstract: | The distributive trades, consisting of wholesaling and retailing, are a key sector of the economy. As the main interface between producers and consumers, the sector is particularly important from a monetary policy point of view: this is where most consumer goods prices are ultimately set. Despite almost 20 years of the Single Market, mark-ups in the distributive trades sector can still be substantial and differ considerably across countries, while cross-border trade remains limited. This report examines the structural features of the distributive trades sector which are likely to play an important role in determining price level and infl ation differences across countries. JEL Classification: |
| Keywords: | Prices, trades, euro area |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbops:20110128&r=eec |
| By: | Fedorova, Elena (BOFIT) |
| Abstract: | With the rise of interconnected global financial systems, there is an increased risk that a financial crisis in one country may spread to others. The contagion effects of the 2008 global financial crisis hit advanced economies fast and hard while sparing less developed and less integrated financial systems. The present study focuses on the contagion effects at Eastern European stock markets and changes in their interconnections after EU accession in 2004. Specifically, we investigate the relationship among the stock market sectors of Poland, Hungary and the Czech Republic during 19982009 and their exposure to on-shored financial risk. The evidence suggests direct linkages between different stock market sectors with respect to returns and volatilities with increased equity-shock transmission between markets after EU accession in 2004. Of particular note is the intra-industry contagion in emerging Europe. Our findings have implications for asset pricing and portfolio selection for international financial institutions and financial managers. |
| Keywords: | GARCH-BEKK; international risk transfer; emerging Eastern Europe; spillovers; intra- and inter-industry contagion |
| JEL: | C32 F36 G12 G15 |
| Date: | 2011–10–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2011_024&r=eec |
| By: | Taylor, Mark P. |
| Abstract: | We identify patterns of self-employment entry, exit and survival in a sample of EU countries and examine factors that explain individuals self-employment experiences within and between countries. We estimate a range of models, including dynamic random effects models that endogenise the initial condition. Our results highlight similarities and differences between countries, and illustrate the importance of age and previous labour market experiences in determining self-employment flows. We also find a high degree of persistence in self-employment across countries, which is most pronounced in France and Germany and least pronounced in Spain. Our results suggest that flows into self-employment are positively associated with the strictness of employment protection legislation. |
| Date: | 2011–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2011-26&r=eec |
| By: | Guglielmo Maria Caporale; Luis A. Gil-Alana |
| Abstract: | This paper analyses two well-known features of interest rates, namely their time dependence and their cyclical structure. Specifically, it focuses on the monthly Euribor rate, using monthly data from January 1994 to May 2011. Models based on fractional integration at the long run or zero frequency, although adequately describing the persistent behaviour of the series, do not take into account its cyclical structure. Therefore, a more general cyclical fractional model is considered. Future directions for research in this context are also discussed. |
| Keywords: | Euribor rate, time dependence, cyclical behaviour |
| JEL: | C22 E3 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1165&r=eec |
| By: | H. Lesca (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II, UPMF Grenoble II - Université Pierre Mendès France - Université Pierre Mendès-France - Grenoble II); Nicolas Lesca (CERAG - Centre d'études et de recherches appliquées à la gestion - CNRS : UMR5820 - Université Pierre Mendès-France - Grenoble II) |
| Abstract: | Le but du présent texte est de présenter la méthode Puzzle® pour l'exploitation des signaux faibles . Elle résulte des travaux de recherche d'une équipe du laboratoire CERAG-CNRS, université Pierre Mendès France, et a fait l'objet d'un grand nombre d'applications en entreprises ainsi que dans des ministères. Pour " faire plus vivant " nous avons choisi d'adopter une forme narrative et de présenter une fiction concernant la Chine. Cependant toutes les informations mentionnées sont exactes et leurs références sont précisées entre parenthèses. |
| Keywords: | Risque ; explosion de l'Italie ;initiateurs de l'Europe ; Application de la méthode Puzzle© ;cas macroéconomique |
| Date: | 2011–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-00630449&r=eec |
| By: | David Hummels; Rasmus Jørgensen; Jakob R. Munch; Chong Xiang |
| Abstract: | We estimate how offshoring and exporting affect wages by skill type. Our data match the population of Danish workers to the universe of private-sector Danish firms, whose trade flows are broken down by product and origin and destination countries. Our data reveal new stylized facts about offshoring activities at the firm level, and allow us to both condition our identification on within-job-spell changes and construct instruments for offshoring and exporting that are time varying and uncorrelated with the wage setting of the firm. We find that within job spells, (1) offshoring tends to increase the high-skilled wage and decrease the low-skilled wage; (2) exporting tends to increase the wages of all skill types; (3) the net wage effect of trade varies substantially across workers of the same skill type; and (4) conditional on skill, the wage effect of offshoring exhibits additional variation depending on task characteristics. We then track the outcomes for workers after a job spell and find that those displaced from offshoring firms suffer greater earnings losses than other displaced workers, and that low-skilled workers suffer greater and more persistent earnings losses than high-skilled workers. |
| JEL: | F16 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17496&r=eec |
| By: | Godart, Olivier; Görg, Holger; Hanley, Aoife |
| Abstract: | Starting from the observation that all firms in Ireland (foreign and domestic in manufacturing and services industries) were hit by the crisis, the paper asks whether there is a difference in the behaviour of foreign and domestic firms. One hypothesis is that foreign multinationals are less linked into the Irish economy, so more likely to leave once the economy is hit by a negative shock. The paper discusses background hypotheses before giving empirical evidence from firstly aggregate data, and secondly firm-level observations. The analysis of the latter suggests that foreign firms are not more likely to leave during the crisis than Irish firms. Some policy conclusions are offered in the paper. |
| Keywords: | financial crisis; firm survival |
| JEL: | F23 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8596&r=eec |