nep-eec New Economics Papers
on European Economics
Issue of 2011‒11‒01
six papers chosen by
Giuseppe Marotta
University of Modena and Reggio Emilia

  1. Leaving the euro zone: a user’s guide By Eric Dor
  2. Monetary Policy Implementation in the Eurozone – the Concept of Endogenous Money By Svatopluk Kapounek
  3. No Protectionist Policy Before and During the Great Recession By Hylke Vandenbussche; Christian Viegelahn;
  4. Monetary Policy Transmission in Vector Autoregressions: A New Approach Using Central Bank Communication By Matthias Neuenkirch
  5. Transformation of payment systems: The case of European Union enlargement By Francisco José Callado Muñoz; Jana Hromcová; Natalia Utrero González
  6. Labor Demand During the Crisis: What Happened in Germany? By Olga Bohachova; Bernhard Boockmann; Claudia M. Buch

  1. By: Eric Dor (IESEG School of Management (Lille Catholic University, LEM-CNRS))
    Date: 2011–10
  2. By: Svatopluk Kapounek (Department of Finance, FBE MENDELU in Brno)
    Abstract: The author focuses on the current problems of the common monetary policy implementation in the Eurozone in context of output stabilization function. The author focuses on the money demand function stability and its estimation. The stable money demand function ensures that the money supply would have predictable impact on the macroeconomic variables such as inflation and real economic growth. The instability is described by Poskeynesianś assumptions of money endogeneity. Although central banks may have certain control over the money supply, they cannot fix the stock of money in a country. According to the Postkeynesianś assumptions, the enterprises do not need ex ante stock of savings in order to carry out investment decisions. The causality is directed from economic activity to money demand. Interaction between the money demand and supply is arranged by multiplier effect of deposits.
    Keywords: monetary transmission mechanism, money endogeneity, European integration process, Post- Keynesian economics
    JEL: E5
    Date: 2011–10
  3. By: Hylke Vandenbussche; Christian Viegelahn;
    Abstract: This paper evaluates the Eurpean Union's antidumping (AD) policy from 1995-2009 with a special focus on the 2008-9 crisis. Combining product-level data on AD cases with detailed import data, we fail to find clear signs of a major trade policy change since the outbreak of the crisis. Our findings suggest that the EU largely remained on its pre-crisis path of AD policy with an increasing share of products and more industries covered by AD measures. Moreover, EU AD policy has increasingly focused on China and other lower middle income countries as targets. Further findings suggest that the EU is more likely to impose protection against countries and country-industries that are similar in their product mix. Country-product combinations subject to a preferential tariff are also more likely to be targeted. In terms of product characteristics, we observe that especially the shares of consumer goods and differentiated goods covered by EU AD measures have increased rapidly, remaining at a relatively high level also during the crisis.The patterns we reveal do not appear to be driven by a few outlying countries but are also similar when considering imports of individual EU member states.
    Keywords: Antidumping, crisis, European Union, great recession, product-level data, temporary trade barriers, trade policy, WTO
    JEL: F13 F14 F52
    Date: 2011
  4. By: Matthias Neuenkirch (University of Marburg)
    Abstract: In this paper, we study the role central bank communication plays in the monetary policy transmission mechanism. We employ the Swiss Economic Institute’s Monetary Policy Communicator to measure the future stance of the European Central Bank’s monetary policy. Our results indicate that, first, communication influences prices and output. Second, communication partly crowds out the effects of the short-term interest rate as the latter’s influence is lower and its implementation lag increases compared to a benchmark model without central bank communication. Future work on monetary policy transmission should incorporate both a short-term interest rate and a communication indicator.
    Keywords: Central Bank Communication, European Central Bank, Monetary Policy Shocks, Monetary Policy Transmission, Vector Autoregression
    JEL: E52 E58
    Date: 2011
  5. By: Francisco José Callado Muñoz (Dpt. Economia); Jana Hromcová (Universitat de Girona); Natalia Utrero González (Dpt. Economia)
    Abstract: In this paper we present a general equilibrium model on payment choice at retail level. We analyze how the accession to an economic and monetary union, and the influence of new institutions may shape the evolution of consumers’ payments in newly acceded countries. The model suggests that accessing countries approach accepting group attitudes towards payment choices as a consequence of institutional pressure and technology development. We apply the results of the model to 2004 European Union enlargement process. Results confirm the relevance of institutional environment and technology development in retail payment system decisions of newly acceded countries.
    Keywords: cash; payments; European Union enlargement.
    JEL: E42 E51 G21 O52
    Date: 2011–10
  6. By: Olga Bohachova; Bernhard Boockmann; Claudia M. Buch
    Abstract: In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms’ labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.
    Keywords: Labor demand, economic crisis, short-time work, financial frictions, labor market institutions, employment adjustment
    JEL: J23 J68 G32
    Date: 2011–10

This nep-eec issue is ©2011 by Giuseppe Marotta. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.