nep-eec New Economics Papers
on European Economics
Issue of 2015‒05‒16
twenty papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Real effects of sovereign bond market spillovers in the euro area By Gadatsch, Niklas
  2. Austerity, cyclical adjustment and the remaining leeway for expansionary fiscal policies within the current EU fiscal framework By Truger, Achim
  3. Europeâ??s radical banking union By Nicolas Véron
  4. “On the bi-directional causal relationship between public debt and economic growth in EMU countries” By Marta Gómez-Puig; Simón Sosvilla-Rivero
  5. European-wide inequality in times of the financial crisis By Bönke, Timm; Schröder, Carsten
  6. An entropy-based early warning indicator for systemic risk By Monica Billio; Roberto Casarin; Michele Costola; Andrea Pasqualini
  7. Predicting Sovereign Fiscal Crises: High-Debt Developed Countries. By Betty Daniel, Christos Shiamptanis
  8. Bank sovereign bond holdings, sovereign shock spillovers, and moral hazard during the European crisis By Andrea Beltratti; René M. Stulz
  9. Price-Level Convergence in the Eurozone By Alfredo García Hiernaux; David Esteban Guerrero Burbano
  10. Sovereign Debt and Structural Reforms By Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio
  11. Does the Post-Crisis Weakness of Global Trade Solely Reflect Weak Demand? By Patrice Ollivaud; Cyrille Schwellnus
  12. Some Empirical Findings on the Structural Devlopment of the Estonian Economy By Claus Friedrich Laaser; Janno Reiljan; Klaus Schrader
  13. Labour markets in Visegrad countries ten years after the 2004 EU enlargement By Roman Klimko
  14. The Innovation Union Scoreboard is Flawed: The case of Sweden – not being the innovation leader of the EU By Edquist , Charles; Zabala-Iturriagagoitia , Jon Mikel
  15. Economic growth and capital flow in European countries in pre and post-crisis periods. By Ketenci, Natalya
  16. Is the Maastricht debt limit safe enough for Slovakia? By Zuzana Mucka
  17. CEE Economies in the New Millennium: Their Strengths, Vulnerabilities and Forthcoming Challenges By Marek Dabrowski
  18. The Efficiency of Secondary Schools in an International Perspective: Preliminary Results from PISA 2012 By Tommaso Agasisti; Pablo Zoido
  19. Employment effects of foreign direct investment. New Evidence from Central and Eastern European Countries. By C. Jude; M. I. Pop Solaghi
  20. How Deep Is Your Love? A Quantitative Spatial Analysis of the Transatlantic Trade Partnership By Krebs, Oliver; Pflüger, Michael P.

  1. By: Gadatsch, Niklas
    Abstract: This paper develops a small open economy model to investigate the impact of rising sovereign bond market spreads on the real economy. One key element of the model is a "sovereign risk channel" through which tensions in the sovereign bond market tend to spill over into private credit markets. The model is estimated with Bayesian methods and data for "high-spread" countries in the euro area. It turns out that spread shocks during the Euro crisis had a negative effect on real GDP growth in these countries, up to 0.8 percentage points (PP) Portugal and Ireland, 0.3 PP in Italy and 0.2 PP in Spain.
    Keywords: Small open economy,Business cycles,Sovereign risk premium,DSGE modeling
    JEL: E32 E43 F41
    Date: 2015
  2. By: Truger, Achim
    Abstract: Fiscal policy in the Euro area is still dominated by austerity measures implemented under the institutional setting of the 'reformed' stability and growth pact, and the even stricter 'fiscal compact'. At the same time, calls for a more expansionary fiscal policy to overcome the economic crisis have recently become more frequent. In his Jackson Hole speech Mario Draghi, the president of the ECB, called for a more expansionary fiscal stance for the Euro area as a whole and a public investment programme on the European level insisting, however, that the existing rules of the Stability and Growth Pact be respected. The European Council at its meeting in June 2014 also saw the need to stimulate growth, but insisted as well that this be realised within the current institutional framework. Recently, the EU-Commission in this spirit has launched the Juncker-Plan to stimulate (public) investment and is using a less strict interpretation of the Stability and Growth Pact in order to provide more fiscal leeway for countries under unfavourable economic circumstances. The paper argues that these steps do not go far enough and that a truly expansionary fiscal policy in the dimension of two to three per cent of Euro area GDP for a few years is possible even within the existing institutional framework. Special emphasis is put on the method of cyclical adjustment employed by the European Commission in order to assess member states' fiscal position and effort as well as on ways to increase public investment. It will be shown that even in the existing framework the leeway for a macro economically and socially more sensible fiscal policy using the interpretational leeway inherent in the rules could be quite substantial.
    Keywords: fiscal policy,austerity,cyclical adjustment of public finances,Euro area
    JEL: E61 E62 E65 H62 H63
    Date: 2015
  3. By: Nicolas Véron
    Abstract: Banking Union, even in its current incomplete form, is the single biggest structural policy success of the EU since the start of the financial crisis. This essay presents the sequence of events that led to its inception in late June 2012 and takes stock on its current status of implementation and prospects. The essay argues forcefully that the political decision to initiate banking union was the decisive factor behind the ECBâ??s OMT programme, which put an end to the most acute phase of the euro area crisis, and that it also enabled the shift in the European approach to banking crisis resolution from bail-out to bail-in, which was prevented by the earlier policy framework of national banking supervision. In this sense, the banking union decision of mid-2012 was the crucial and largely unrecognized turning point of the entire euro area crisis. The transfer of supervisory authority over all euro-area banks to the ECB, effective since last November, marks a profound change and is already resulting in more rigorous and consistent supervision. After a few years of transition, the banking union framework can be expected to lead to a better integrated, more diverse and more resilient European financial system. It will also enhance European influence in shaping global banking regulatory standards and policies.
    Date: 2015–05
  4. By: Marta Gómez-Puig (Faculty of Economics, University of Barcelona); Simón Sosvilla-Rivero (Universidad Complutense de Madrid)
    Abstract: New evidence is presented on the possible existence of bi-directional causal relationships between public debt and economic growth in both central and peripheral countries of the European Economic and Monetary Union. We test for heterogeneity in the bi-directional Granger-causality across both time and space during the period between 1980 and 2013. The results suggest evidence of a “diabolic loop” between low economic growth and high public debt levels in Spain after 2009. For Belgium, Greece, Italy and the Netherlands debt has a negative effect over growth from an endogenously determined breakpoint and above a debt threshold ranging from 56% to 103% depending on the country.
    Keywords: Public debt, economic growth, Granger-causality, euro area, peripheral EMU countries, central EMU countries. JEL classification:C22, F33, H63, O40, O52
    Date: 2015–05
  5. By: Bönke, Timm; Schröder, Carsten
    Abstract: In view of rising concerns over increasing inequality in the European Union since the financial crisis, this study provides an inequality decomposition of the overall European income distribution by country. The EU Statistics on Income and Living Conditions are our empirical basis. Inequality has risen moderately within the core Euro area, particularly in the last two years of the observation period (2010/11). Widening disparities between EU Member States are the driving force behind this trend, while inequalities within countries do not exhibit systematic changes. An analysis of binational distributions reveals that it is the countries hit worst by the crisis - Greece and Spain - for which the between-country disparities have changed most markedly.
    Keywords: inequality,decomposition,crisis
    JEL: D30 D31 D39
    Date: 2015
  6. By: Monica Billio (Department of Economics, University Of Venice Cà Foscari); Roberto Casarin (Department of Economics, University Of Venice Cà Foscari); Michele Costola (Department of Economics, University Of Venice Cà Foscari); Andrea Pasqualini (Department of Economics, University Of Venice Cà Foscari)
    Abstract: The purpose of this paper is the construction of an early warning indicator for systemic risk using entropy measures. The analysis is based on the cross-sectional distribution of marginal systemic risk measures such as Marginal Expected Shortfall, Delta CoVaR and network connectedness. These measures are conceived at a single institution for the financial industry in the Euro area. We estimate entropy on these measures by considering different definitions (Shannon, Tsallis and Renyi). Finally, we test if these entropy indicators show forecasting abilities in predicting banking crises. In this regard, we use the variable presented in Babeck? et al. (2012) and Alessi and Detken (2011) from European Central Bank. Entropy indicators show promising forecast abilities to predict financial and banking crisis. The proposed early warning signals reveal to be effective in forecasting financial distress conditions.
    Keywords: Entropy, systemic risk measures, early warning indicators, aggregation.
    JEL: C10 C11 G12 G29
    Date: 2015
  7. By: Betty Daniel, Christos Shiamptanis (Wilfrid Laurier University)
    Abstract: Every country has a fiscal limit on debt, where that limit represents a debt level so high that the country's economic and political systems cannot raise taxes or reduce spending sufficiently to maintain solvency. At the limit, creditors flee, and the government faces a fiscal crisis. If we knew the limit, then we could estimate the probability of a fiscal crisis as the probability of reaching the limit. Governments do not announce their fiscal limits. In this paper, we estimate fiscal feedback rules for six-high-debt developed countries to investigate the extent to which the systematic response of the primary surplus to debt reveals information on the fiscal limit. In general, estimation of a fiscal feedback rule does not reveal an explicit fiscal limit for a country that has not experienced a crisis. However, estimates of long-run debt, together with debt history, can be combined to yield an estimate of a lower bound on the fiscal limit. We use estimates of the fiscal rule for six high-debt developed countries to project debt forward from dates, following the beginning of the financial crisis, and compare the projections with our estimates of the lower bound on debt. We label countries, whose debt projections exceed the lower bound as high-risk. Both Greece and Portugal enter the high-risk category about one year prior to their financial crises. Italy is at high risk in 2012 and others are at low risk through 2012.
    Keywords: Fiscal Limits, Fiscal Rules, Fiscal Solvency, Fiscal Sustainability, Sovereign Default
    JEL: E6 F5
    Date: 2015–05–05
  8. By: Andrea Beltratti; René M. Stulz
    Abstract: From 2010 to 2012, the relation between bank stock returns from European Union (EU) countries and the returns on sovereign CDS of peripheral (GIIPS) countries is negative. We use days with tail sovereign CDS returns of peripheral countries to identify the effects of shocks to the cost of borrowing of these countries on EU banks from other countries. A CDS tail return affects banks with greater exposure to the country experiencing that return more, but it has an impact on banks regardless of exposure. Shocks to peripheral countries that are more pervasive impact the returns of banks from countries that experience no shock more than shocks to small individual peripheral countries. In general, the impact of tail returns is asymmetric in that banks suffer less from adverse shocks to peripheral countries than they gain from favourable shocks to such countries.
    JEL: F34 G12 G15 G21 H63
    Date: 2015–05
  9. By: Alfredo García Hiernaux (Departamento de Fundamentos del Análisis Económico II (Economía Cuantitativa). Universidad Complutense de Madrid.); David Esteban Guerrero Burbano (CUNEF. Colegio Universitario de Estudios Financieros.)
    Abstract: This paper shows that price level trends in many of the EMU countries evolve with different patterns and that these patterns will not converge in the long-run. We propose that the hypothesis of price convergence should be evaluated and tested employing the relative prices. To this aim, we: (i) define the asymptotic price level convergence in mean and variance, (ii) provide a model for relative price levels that includes a transition path, and (iii) show how to properly test the definitions stated. Our results show that only French and German price levels converge in mean to a zero gap in the EMU while some others, not many, converge to a nonzero significant gap. This should be a matter of concern for the European monetary policy makers as it implies that the monetary policy does not affect all the EMU members equally.
    Keywords: Price convergence; Price levels; Relative price; Inflation; EMU.
    JEL: E30 E31 E52 C22 F15
    Date: 2015–05
  10. By: Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio
    Abstract: Motivated the European debt crisis, we construct a tractable theory of sovereign debt and structural reforms under limited commitment. The government of a sovereign country which has fallen into a recession of an uncertain duration issues one-period debt and can renege on its obligations by suffering a stochastic default cost. When faced with a credible default threat, creditors can make a take-it-or-leave-it debt haircut offer to the sovereign. The risk of renegotiation is reflected in the price at which debt is sold. The sovereign government can also do structural policy reforms that speed up recovery from the recession. We characterize the competitive equilibrium and compare it with the constrained efficient allocation. The equilibrium features increasing debt, falling consumption, and a non-monotone reform effort during the recession. In contrast, the constrained optimum yields step-wise increasing consumption and step-wise decreasing reform effort. Markets for state-contingent debt alone do not restore efficiency. The constrained optimum can be implemented by a flexible assistance program enforced by an international institution that monitors the reform effort. The terms of the program are improved every time the country poses a credible threat to leave the program unilaterally without repaying the outstanding loans.
    Keywords: austerity programs; debt overhang; default; European debt crisis; fiscal policy; Great Recession; Greece; International Monetary Fund; limited commitment; moral hazard; renegotiation; risk premia; sovereign debt; structural reforms
    JEL: E62 F33 F34 F53 H12 H63
    Date: 2015–05
  11. By: Patrice Ollivaud; Cyrille Schwellnus
    Abstract: Global trade growth over the past few years has appeared extraordinarily weak, even in relation to weak global GDP growth. This paper shows that the apparent breakdown in the relationship between global trade and global GDP growth is largely explained by two factors: an inappropriate measurement of global GDP and extraordinary demand weakness in the euro area. As a measure of demand for traded goods, global GDP at market exchange rates is more appropriate than the conventional purchasing power parity-based measure. Moreover, extraordinary demand weakness in the euro area – which is a particularly trade intensive region – has had a substantial negative effect on intra-euro area trade flows, which are commonly counted towards global trade. When global GDP is measured at market exchange rates and intra-euro area flows are removed from the measure of global trade, econometric estimations suggest that over the past 15 years the long-term elasticity of global trade to GDP has been similar to that of the 1990s. Indeed, the overwhelming part of post-crisis trade weakness can be attributed to weak global demand rather than structural changes, according to the econometric estimations in this paper and supporting evidence on changes in global investment, international production fragmentation and protectionism.<P>La faiblesse du commerce mondiale après la crise reflète-t-elle seulement une faible demande?<BR>La croissance du commerce mondial a été particulièrement faible ces dernières années, même relativement à la croissance du PIB mondial. Ce papier montre que cette apparente rupture dans la relation entre croissance du commerce mondial et du PIB mondial est due dans une large mesure à deux facteurs : une mesure inappropriée du PIB mondial et une faiblesse exceptionnelle de la demande dans la zone euro. Pour mesurer la demande en biens échangeables, le PIB mondial agrégé avec des taux de change du marché est plus adapté que la mesure conventionnelle basée sur des conversions en parité de pouvoir d’achat. De plus, la faiblesse exceptionnelle de la demande dans la zone euro (où l’intensité du commerce est particulièrement forte) a eu un effet négatif substantiel sur les flux intra-zones, qui sont habituellement comptabilisés dans le commerce mondial. Une fois que le PIB mondial est agrégé avec des taux de change de marché et que l’on soustrait les flux intra-zone-euro au commerce mondial, les estimations économétriques suggèrent ainsi que sur les 15 dernières années, l’élasticité de long-terme du commerce au PIB mondial a été similaire à celle des années 90. En effet, la faiblesse du commerce mondial après la crise est essentiellement due à une faiblesse de la demande mondiale plutôt qu’à un changement structurel. Cela est montré par les estimations économétriques de ce papier et également confirmé par l’observation des évolutions de l’investissement mondial, de la fragmentation de la production internationale et du protectionnisme.
    Keywords: forecasting, trade elasticity, élasticité du commerce, prévisions, Commerce mondial
    JEL: C53 F10 F17
    Date: 2015–05–07
  12. By: Claus Friedrich Laaser; Janno Reiljan; Klaus Schrader
    Abstract: Estonia is widely regarded as a paramount example for a successful transformation of a socialist economic system to a functioning market economy. Against the backdrop of this positive image which contrasts strongly with the crisis scenarios in Southern Europe the remaining problems of Estonia are often ignored. Estonia has hardly succeeded in catching-up economically with the richer countries of the euro area. In this paper the authors raise the question what the causes of the sluggish catching-up process are, and which opportunities Estonian economic policy has in order to close the wealth gap. It turns out that Estonia faces a serious productivity problem, particularly in the manufacturing sector producing tradable goods which is normally the driving engine behind economic and technological catching-up. The Estonian economy has failed to undergo the necessary structural change towards technologically more advanced employment structures and export patterns. Accordingly, Estonian economic policy needs to create a suitable business environment to support this kind of structural change
    Keywords: Estonia, catching-up, growth and structural change
    JEL: F14 O12 O52
    Date: 2015–04
  13. By: Roman Klimko (University of Economics in Bratislava, Faculty of National Economy, Department of Social Development and Labour)
    Abstract: In 2004 the European Union expanded to include ten new members, including all Visegrad countries. It can be concluded that growth potential of the Czech Republic, Hungary, Poland and Slovakia was obvious. However, the global economic crisis hit the labour markets of V4 countries significantly, but differently. The paper aiming at identifying labour market developments in V4 countries and examines the impact of the economic development on them. The paper emphasizes the development of the selected specific unemployment rates. It deals with an issue how to get employment development back on track. Therefore, the last section reviews the green economy as one of the key sectors with great employment potential.
    Keywords: Visegrad countries, labour market, unemployment rate, green jobs
    JEL: J01 J08
  14. By: Edquist , Charles (CIRCLE, Lund University); Zabala-Iturriagagoitia , Jon Mikel (Deusto Business School, Deusto University)
    Abstract: According to the Innovation Union Scoreboard, published by the European Commission every year, Sweden has been, and still is, an innovation leader within the EU and one of the most innovative countries in Europe. In the Innovation Union Scoreboard 2014 (European Union, 2014: 5), Sweden has the top position (ranked number 1) of all EU28 Member States in what is called “EU Member States’ Innovation Performance”. In the ranking there are 10 countries between Sweden and the EU average. This analysis is based on the ranking provided by one single composite indicator (SII or Summary Innovation Index), based on 25 separate indicators. <p> In this paper we argue that the SII provided by the Innovation Union Scoreboard is highly misleading. The data (the 25 separate indicators) that constitute this composite innovation indicator need to be analyzed much more in depth in order to reach a correct measure of the performance of an innovation system. We argue that input and output indicators need to be considered separately and measured individually and as two groups of indicators. Thereafter we compare the input and output indicators with one another (as is normally done in productivity and efficiency measurements). The outcome of this is a relevant and better measure of innovation performance. <p> In this paper, the performance of the Swedish national innovation system is analyzed by using exactly the same data as is used by the Innovation Union Scoreboard 2014. We analyze the relative position of Sweden regarding both input and output indicators, concluding that Sweden’s position as an innovation leader within the EU must be reconsidered. A theoretical background and reasons for selecting the indicators used is given and a new position regarding Sweden’s innovation performance compared to the other countries is calculated. <p> Our findings show, that Sweden remains in a high position for the innovation input indicators, ranked number 1. However, with regard to innovation output, Sweden is ranked number 10. In other words, about a third of all European Union 28 Member States have a higher innovation output than Sweden. To estimate the efficiency or productivity of the Swedish innovation system, inputs and outputs must be related to each other. When doing so, we reach the conclusion that Sweden is ranked number 24 of EU28 Member States. This finding is then discussed and we also discuss which countries would be relevant for Sweden to compare (benchmark) its innovation system with. <p> The conclusion is that Sweden, based on our calculations, can certainly not be seen as an innovation leader in Europe. This means that the Innovation Union Scoreboard is flawed and may therefore mislead researchers, policy-makers, politicians as well as the general public – since it is widely reported in the media.
    Keywords: Innovation system; innovation policy; innovation performance; Sweden; indicators; input; output
    JEL: O30 O38 O49 O52
    Date: 2015–04–29
  15. By: Ketenci, Natalya
    Abstract: A lot of attention in the literature has been given to an important issue of the effect of capital mobility on economic growth of developing countries and little attention has been devoted to developed countries. Developed countries are main players in the global financial market. Lately, increasing number of financial crises had negative effect not only on developing countries but on developed countries as well. Particularly the global financial crisis of 2008 had a negative impact on advanced economies. This paper investigates the relationship between economic growth and international capital flows in the EU members before and after the global financial crisis. The study examines how these relationships change when countries in the considered panel vary. Panel estimations using annual data for the period 1995-2013 are made for different groups of European countries, such as EU27, EU15, Eurozone and CEE members of EU. A dynamic panel data applies the Generalized Method of Moments estimation technique, developed by Hansen (1982). Empirical results reveal that relationships between economic growth and capital flows significantly vary between considered groups. This study finds evidence that after the global financial crisis, economic growth in EU15 and Eurozone groups became more sensitive to capital flows compared to the pre-crisis period.
    Keywords: Economic growth, capital flows, generalized method of moments (GMM), EU, dynamic panel data.
    JEL: F43
    Date: 2015–05–03
  16. By: Zuzana Mucka (Council for Budget Responsibility)
    Abstract: We study the interactions among fiscal policy, fiscal limits and sovereign risk premia. The fiscal limit, which measures the government’s ability to service its debt, arises endogenously from dynamic Laffer curves and is a random variable. A nonlinear relationship between sovereign risk premia and the level of government debt then emerges in equilibrium. The model is calibrated to Slovak data and we study the impact of various model parameters on the distribution of the fiscal limit. Fiscal limit distributions obtained via Markov–Chain–Monte–Carlo regime switching algorithm depend on the rate of growth of government transfers, the degree of countercyclicality of policy, and the distribution of the underlying economic conditions. We find that it is considerably more heavy–tailed compared with the one usually obtained in the literature for advanced economies, and is very sensitive to the size and rate of growth of transfers. The main policy message is that the Maastricht debt limit is not safe enough for Slovakia: although in the equilibrium the chance of country default is 10 percent when the debt is 60 percent of GDP, it increases dramatically to approximately 40 percent in bad times (when productivity falls by almost 8 percent). A well-designed fiscal policy involving a deceleration in the growth of transfers can reduce the chance of default significantly.
    Keywords: Simulation Methods and Modelling, Fiscal Policy, Government Expenditures, Debt Management and Sovereign Debt
    JEL: C15 C63 E62 H5 H63
    Date: 2015–02
  17. By: Marek Dabrowski (Bruegel, Brussels)
    Abstract: After completing the painful transition of the 1990s, former communist countries enjoyed a period of rapid economic growth which was underpinned by three groups of factors: (i) benefits of market reforms and transition-related restructuring in the 1990s; (ii) increasing participation in the Single European Market (SEM) and other mechanisms of EU integration; (iii) global economic and financial boom of 2003–2007. However, the period of prosperity did not last long. Since 2008 the entire region has become hit by the global and European financial crises, the negative consequences of which have not yet been overcome. While the size of negative shock and resulting macroeconomic performance differed between individual countries, the crisis revealed common vulnerabilities such as high dependence on economic developments in advanced economies of Western and Northern Europe, and changes in global capital flows determined, in turn, by changes in monetary policies of major central banks, limited room for manoeuvre in national macroeconomic policies, unfinished domestic economic reform agenda and others. The after-crisis macroeconomic prospects look uncertain and challenging. The pace of economic growth is unlikely to come back to the high levels of the early and mid–2000s soon. That means CEE countries will have to live and conduct their macroeconomic policies in the environment of slower growth, which will have a considerable impact on their fiscal accounts. Another challenge is related to population aging, which will have serious consequences for sustainability of public pension systems (already in deep deficit), public healthcare systems, labour market, migration flows, etc. Rapid development of non-EU emerging-market economies and their closer trade relations with the EU will put increasing competitive pressure on several sectors and industries of CEE economies, including those which were considered to be their comparative advantage in the previous decade. Countries most heavily hit by the crisis made some adjustment, but more concerted reform effort in the entire region is needed to increase growth potential. The future reform agenda should decrease implicit public pension and health liabilities, make domestic labour markets more flexible, improve business climate, and adjust education to the needs of contemporary labour markets. Countries which stay outside the Eurozone should join it soon. Completing the Single European Market mechanism (especially in services), simplifying acquis wherever it is possible (pan-European deregulation), going ahead with the Banking Union project, strengthening fiscal surveillance rules, and more open migration policies, can contribute to improving future growth potential of all EU economies.
    Keywords: CEE countries, economic transition, former communist countries, European Union
    JEL: E63 F15 F21 F32 F34 F36 F43 G01 G21 H53 P33
  18. By: Tommaso Agasisti; Pablo Zoido
    Abstract: As governments around the world struggle with doing more with less, efficiency analysis climbs to the top of the policy agenda. This paper derives efficiency measures for more than 8,600 schools in 30 countries, using PISA 2012 data and a bootstrap version of Data Envelopment Analysis as a method. We estimate that given current levels of inputs it would be possible to increase achievement by as much as 27% if schools improved the way they use these resources and realised efficiency gains. We find that efficiency scores vary considerably both between and within countries. Subsequently, through a second-stage regression, a number of school-level factors are found to be correlated with efficiency scores, and indicate potential directions for improving educational results. We find that many efficiency-enhancing factors vary across countries, but our analysis suggests that targeting the proportion of students below low proficiency levels and putting attention to students’ good attitudes (for instance, lower truancy), as well as having better quality of resources (i.e. teachers and educational facilities), foster better results in most contexts.<BR>Alors que les gouvernements du monde entier tentent de faire toujours plus avec moins, l’analyse de l’efficience occupe le haut de l’agenda politique. Ce document s’appuie sur des mesures d’efficience effectuées dans plus de 8600 écoles dans 30 pays, en utilisant les données PISA de 2012 et une version bootstrap d’une méthode d’analyse par enveloppement de données. Nous estimons qu’au regard des niveaux actuels des contributions, il serait possible d’augmenter les performances de 27% si les écoles amélioraient la façon dont elles utilisent les ressources en réalisant des gains d’efficience. Nous constatons que les scores d’efficience varient de manière considérable entre les pays et au sein des pays. En conséquence, par le biais d’une régression de deuxième étape, il se trouve qu’un certain nombre de facteurs scolaires sont corrélés aux scores d’efficience et indiquent de possibles orientations visant à améliorer les résultats en matière éducative. Nous constatons que de nombreux facteurs favorisant l’efficience varient d’un pays à l’autre, mais notre analyse indique que l’on obtient de meilleurs résultats dans la plupart des domaines en se concentrant sur les étudiants dont les compétences sont faibles et en mettant l’accent sur les bonnes attitudes (réduire l’absentéisme par exemple) tout en ayant des ressources de meilleure qualité (professeurs et établissements scolaires).
    Keywords: efficiency, equity, international comparisons
    JEL: C14 I21 I24 I28
    Date: 2015–05–05
  19. By: C. Jude; M. I. Pop Solaghi
    Abstract: This paper examines the role of foreign direct investment (FDI) as a determinant of employment by using a dynamic labor demand model applied for a panel of 20 Central and Eastern European Countries during the period 1995-2012. Our results indicate that FDI leads to a phenomenon of creative destruction. The introduction of labor saving techniques leads to an initial negative effect on employment, while the progressive vertical integration of foreign affiliates into the local economy eventually converges towards a positive long run effect. However, this phenomenon is only observed in EU countries. Our analysis thus gives partial support to the worries that FDI may displace jobs. Still, the relative importance of FDI as a determinant of employment is modest compared to economic restructuring and output growth. Finally, our results show evidence of a skill bias of production in foreign affiliates, as human capital favors a positive contribution of FDI to employment.
    Keywords: FDI, employment, labor demand, transition countries, dynamic panel.
    JEL: F23 J23
    Date: 2015
  20. By: Krebs, Oliver (University of Würzburg); Pflüger, Michael P. (University of Würzburg)
    Abstract: This paper explores the quantitative consequences of transatlantic trade liberalization envisioned in a Transatlantic Trade and Investment Partnership (TTIP) between the United States and the European Union. Our key innovation is to develop a new quantitative spatial trade model and to use an associated technique which is extraordinarily parsimonious and tightly connects theory and data. We take input-output linkages across industries into account and make use of the recently established World Input Output Database (WIOD). We also explore the consequences of labor mobility across local labor markets in Germany and the countries of the European Union. We address the considerable uncertainties connected both with the quantification of non-tariff trade barriers and the outcome of the negotiations by taking a corridor of trade liberalization paths into account.
    Keywords: international trade and trade policy, factor mobility, intermediate inputs, sectoral interrelations, transatlantic trade, TTIP
    JEL: F10 F11 F12 F16
    Date: 2015–04

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