nep-eec New Economics Papers
on European Economics
Issue of 2018‒12‒10
twenty-one papers chosen by
Giuseppe Marotta
Università degli Studi di Modena e Reggio Emilia

  1. Euro area reform: An anatomy of the debate By Jean Pisani-Ferry
  2. The Benefits of Reducing Hold-Out Risk: Evidence from the Euro CAC Experiment, 2013-2018 By Picarelli, Mattia; Erce, Aitor
  3. The New Area-Wide Model II: an extended version of the ECB's micro-founded model for forecasting and policy analysis with a financial sector By Coenen, Günter; Karadi, Peter; Schmidt, Sebastian; Warne, Anders
  4. Twitter versus Traditional News Media: Evidence for the Sovereign Bond Markets By Costas Milas; Theodore Panagiotidis; Theologos Dergiades
  5. Privatization and growth: natural experiments of European economies in transition By Kant, Chander
  6. Pockets of risk in European Housing Markets: then and now By Kelly, Jane; Le Blanc, Julia; Lydon, Reamonn
  7. Debt Overhang, Rollover Risk, and Corporate Investment: Evidence from the European Crisis By Kalemli-Ozcan, Sebnem
  8. Inflation expectations, consumption and the lower bound: micro evidence from a large euro area survey By Duca, Ioana A.; Kenny, Geoff; Reuter, Andreas
  9. Monetary policy and bank equity values in a time of low interest rates By Ampudia, Miguel; Heuvel, Skander Van den
  10. The Non-Bank Credit Cycle By Esti Kemp; Rene van Stralen; Alexandros Vardoulakis; Peter J. Wierts
  11. Economic convergence and exchange rate misalignments in the European Union By Judit Kreko; Gabor Oblath
  12. EU FDI Network and Systemic Risks By Giulia De Masi; Giorgio Ricchiuti
  13. Credit supply and demand in unconventional times By Altavilla, Carlo; Boucinha, Miguel; Holton, Sarah; Ongena, Steven
  14. Autonomous Demand and the Investment Share By Daniele Girardi; Riccardo Pariboni
  15. Employment to output elasticities & reforms towards flexicurity: Evidence from OECD countries By Görg, Holger; Hornok, Cecília; Montagna, Catia; Onwordi, George E.
  16. To Ask or Not To Ask? Bank Capital Requirements and Loan Collateralization By Degryse, Hans; Karapetyan, Artashes; Karmakar, Sudipto
  17. Credit Rationing in European SMEs and their Lending Infrastructure By Andrea Mc Namara; Pierluigi Murro
  18. Cost Behaviour – An Empirical Investigation For Euro Area Countries By Diana Filipa Cruz Costa; Samuel Cruz Alves Pereira; Elísio Fernando Moreira Brandão
  19. What hides behind the German labor market miracle? Unemployment insurance reforms and labor market dynamics By Hartung, Benjamin; Jung, Philip; Kuhn, Moritz
  20. International productivity gaps: Are labour input measures comparable? By Ashley Ward; María Belén Zinni; Pascal Marianna
  21. Reversing pension privatization rebuilding public pension systems in Eastern Europe and Latin American countries (2000-18) By Ortiz, Isabel,; Durán-Valverde, Fabio.; Urban, Stefan.; Wodsak, Veronika.; Yu, Zhiming.

  1. By: Jean Pisani-Ferry (Département d'économie)
    Abstract: The euro is nearly 20 years old – ten quiet years followed by ten tumultuous ones. The end of the first decade was marked by glowing, oddly uncritical reviews. Ten years later, however, complacency has largely vanished from assessments of the state of the euro area and disagreements over its future remain unsolved. Already six years ago, the heads of the European institutions issued a blueprint for the future, the Four Presidents’ Report of June 2012 (Van Rompuy et al., 2012), and in a statement on 29 June 2012 the euro area heads of state agreed on “breaking the vicious circle between banks and sovereigns” by establishing a banking union. Much has been done for sure, but the agenda endorsed by the leaders has not been completed and the roadmap for the future remains a matter of fierce controversy. At their June 2018 summit, despite the prior Franco-German rapprochement and the joint ‘Meseberg Declaration’ by President Macron and Chancellor Merkel, the euro area heads of state could only agree to call for further work on a series of still-divisive issues.
    Date: 2018–11
  2. By: Picarelli, Mattia; Erce, Aitor
    Abstract: The introduction of collective action clauses in advanced economies’ sovereign bonds is an understudied phenomenon. An important concern is whether these clauses produce segmentation, pushing apart the price of those bonds issued with and without collective action clauses (CACs). This paper uses the introduction in 2013 of mandatory two-limb CACs in euro area sovereign bonds issued under domestic law to evaluate the price impact of these provisions. In the euro area, bonds with CACs trade at a small premium. On average for those bonds, yields were up to six basis points lower. This average, however, masks heterogeneity. While Germany and Netherlands have not seen a sustained reduction in borrowing costs, in Italy and Spain the effect has been large (between five and ten basis points). These findings support the argument that the introduction of euro CACs in domestic law bonds helped investors reassess the risks associated with those instruments in both countries. impact of these provisions. In the euro area, bonds with CACs trade with a small premium. On average, for those bonds yields were up to six basis points lower. This average, however, masks heterogeneity. While Germany and Netherlands have not seen a sustained reduction in borrowing costs, in Italy and Spain the effect has been large (between five and ten basis points). These findings provide support to the argument that the introduction of euro CACs in domestic law bonds helped investors reassess the risk associated with those instruments in both two countries
    Keywords: Collective action clause, hold-outs, sovereign risk, bond yields
    JEL: F3 G12 G18
    Date: 2018–11–21
  3. By: Coenen, Günter; Karadi, Peter; Schmidt, Sebastian; Warne, Anders
    Abstract: This paper provides a detailed description of an extended version of the ECB’s New Area-Wide Model (NAWM) of the euro area (cf. Christoffel, Coenen, and Warne 2008). The extended model—called NAWM II—incorporates a rich financial sector with the threefold aim of (i) accounting for a genuine role of financial frictions in the propagation of economic shocks and policies and for the presence of shocks originating in the financial sector itself, (ii) capturing the prominent role of bank lending rates and the gradual interest-rate pass-through in the transmission of monetary policy in the euro area, and (iii) providing a structural framework useable for assessing the macroeconomic impact of the ECB’s large-scale asset purchases conducted in recent years. In addition, NAWM II includes a number of other extensions of the original model reflecting its practical uses in the policy process over the past ten years. JEL Classification: C11, C52, E30, E37, E58
    Keywords: Bayesian inference, DSGE modelling, euro area, financial frictions, forecasting, policy analysis
    Date: 2018–11
  4. By: Costas Milas (Management School, University of Liverpool, UK; Rimini Centre for Economic Analysis); Theodore Panagiotidis (Department of Economics, University of Macedonia, Greece; Rimini Centre for Economic Analysis); Theologos Dergiades (Department of International and European Studies, University of Macedonia, Greece; School of Science and Technology, International Hellenic University, Greece)
    Abstract: This paper compares news in Twitter with traditional news outlets and then emphasizes their differential impact on Eurozone's sovereign bond market for a homogeneous news topic. We find a two-way information flow between Twitter's “Grexit” tweets and the respective mentions in traditional news outlets. The influence of Twitter on the traditional news is consistently more prolonged, especially in high-activity periods. We also assess the differential impact of the two news sources on sovereign spreads over and above the impact of economic/financial fundamentals, namely measures of default risk, liquidity risk and global financial risk. Our focus is on the borrowing costs of Eurozone's periphery; for comparison reasons, we also consider France as a core Eurozone country. The effect of Twitter on the Greek sovereign spread is positive and of higher magnitude than that of traditional news outlets. Weak contagion effects are recorded primarily for the case of Portugal and Ireland.
    Keywords: Grexit, Twitter, Traditional news outlets, Sovereign spreads
    JEL: C10 G01 G12
    Date: 2018–12
  5. By: Kant, Chander
    Abstract: We examine the relationship between privatization and growth of transition countries in Europe by using relative income and grouping them by ex-ante factors and by ex-post associations. For transition countries with comparable pre-1991 data also - Bulgaria, Hungary, Poland, and Romania or BHPR countries - privatization/regime change to market economy increased their annual catching-up-to-Germany from 0.90% to 1.50% but the increase was not due to higher TFP. It entirely occurred after they joined the EU, and is entirely due to higher contribution of human capital. Privatization did not impose short run costs on all countries while making CIS countries fell-behind very sharply. The greatly divergent post-transition growth both in the short and the long term cannot be explained by differing emphasis on external versus domestic liberalization. Catching-up of “new” ex-socialist SBCS countries (Slovenia, Baltic countries, the Czech republic and Slovakia) occurred only after they joined the EU. Human capital and TFP explain their growth while for Croatia and Serbia it is physical capital and TFP. Negative contribution of human capital is the sole reason underlying falling-behind of the CIS countries. Based on 1991-2013 catching-up/falling-behind, CIS countries have no prospect of ever equaling German income, pre-2004 EU Western-Europe will reach income equality with Germany in 70 years, BHPR countries in 72; SBCS countries in 104, and Croatia and Serbia in 193 years.
    Keywords: Command economy and market economy; “old” ex-socialist countries and “new” ex-socialist countries; accession to EU; factors behind differing post-socialist growth/catching-up; years for full convergence
    JEL: O10 O47
    Date: 2018–11–29
  6. By: Kelly, Jane (Central Bank of Ireland); Le Blanc, Julia (Deutsche Bundesbank, Research Centre); Lydon, Reamonn (Central Bank of Ireland)
    Abstract: Using household survey data, we document evidence of a loosening of credit standards in Euro area countries that experienced a property price boom-and-bust cycle. Borrowers in these countries exhibited significantly higher loan-to-value (LTV) and loan-to-income (LTI) ratios in the run up to the financial crisis, and an increasing tendency towards longer-term loans compared to borrowers in other countries. In recent years, despite the long period of historically low interest rates and substantial house price increases in some countries, we do not find similar credit easing as before the crisis. Instead, we find evidence of a considerable change in borrower characteristics since 2010: new borrowers are older and have higher incomes than before the crisis.
    Keywords: real estate markets, macroprudential policy, systemic risk, financial crises, bubbles, financial regulation, financial stability indicators.
    JEL: E5 G01 G17 G28 R39
    Date: 2018–10
  7. By: Kalemli-Ozcan, Sebnem
    Abstract: We quantify the role of financial factors behind the sluggish post-crisis performance of European firms. We use a firm-bank-sovereign matched database to identify separate roles for firm and bank balance sheet weaknesses arising from changes in sovereign risk and aggregate demand conditions. We find that firms with higher debt levels and a higher share of short-term debt reduce their investment more after the crisis. This negative effect is stronger for firms linked to weak banks with exposures to sovereign risk, signifying increased rollover risk. These financial channels explain about 60% of the decline in aggregate corporate investment.
    Keywords: Bank-Sovereign Nexus; debt maturity; Firm Investment; Rollover Risk
    JEL: E0 F0
    Date: 2018–11
  8. By: Duca, Ioana A.; Kenny, Geoff; Reuter, Andreas
    Abstract: This paper exploits a very large multi-country survey of consumers to investigate empirically the relationship between inflation expectations and consumer spending. We document that for the Euro Area and almost all of its constituent countries this relationship is generally positive: a higher expected change in inflation is associated with an increase in the probability that a given consumer will make major purchases. Moreover, in line with the predictions of macroeconomic theory, the impact is stronger when the lower bound on nominal interest rates is binding. Also, using the estimated spending probabilities from our micro-level analysis, we indirectly estimate the impact of a gradual increase in inflation expectations on aggregate private consumption. We find the effects to be economically relevant, especially when the lower bound is binding. JEL Classification: D12, D84, E21, E31, E52
    Keywords: consumer inflation expectations, consumption, lower bound, micro data
    Date: 2018–11
  9. By: Ampudia, Miguel; Heuvel, Skander Van den
    Abstract: This paper examines the effects of monetary policy on the equity values of European banks. We identify monetary policy shocks by looking at changes in the EONIA one-month and two-year swap contract rates during narrow windows around the press statements and press conferences announcing monetary policy actions taken by the ECB. We find that an unexpected decrease of 25 basis points on the short-term policy rate increases banks’ stock prices by about 1% on average. These effects vary substantially over time; in particular, they were stronger during the crisis period and reversed during the recent period with low and even negative interest rates. That is, with rates close to or below zero, further interest rate cuts became detrimental for banks’ equity values. The composition of banks’ balance sheets is important in order to understand these effects. In particular, the change in sensitivity to interest rate surprises as rates drop to low and negative levels is much more pronounced for banks with a high reliance on deposit funding, compared to other banks. We argue that this pattern can be explained by a reluctance of banks to pay negative interest rates on retail deposits. JEL Classification: E52, E58, G21
    Keywords: bank profitability, ECB, monetary policy, negative rates
    Date: 2018–11
  10. By: Esti Kemp; Rene van Stralen; Alexandros Vardoulakis; Peter J. Wierts
    Abstract: We investigate the cyclical properties of non-bank credit and its relevance for financial stability. We construct a measure of non-bank credit for a large sample of countries and find that its cyclical properties differ from those of bank credit. Non-bank credit cycles are highly correlated with bank credit cycles in some countries but not in others. Moreover, non-bank credit cycles are less synchronised than bank credit cycles across countries. Finally, non-bank credit cycles could act as a leading indicator for currency, but not for systemic banking, crises. The opposite is true for bank credit cycles. These findings highlight the value added of monitoring non-bank credit.
    Keywords: Credit cycle ; Financial crisis ; Leading indicator ; Non-bank credit
    JEL: G01 G23 F34
    Date: 2018–11–14
  11. By: Judit Kreko (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Science); Gabor Oblath (Institute of Economics - Centre for Economic and Regional Studies, Hungarian Academy of Science)
    Abstract: We investigate (i) the characteristics of real economic and price convergence, (ii) the relationship between economic growth (convergence) and real exchange rate (RER) misalignments within the European Union (EU) during the period 1995–2016. In addition to the relative external price level of GDP, we quantified an alternative indicator for the RER: the internal relative price of services to goods, as measured from the expenditure side of GDP. We interpreted RER-misalignments as deviations from levels consistent with levels of economic development among EU countries. Regarding real convergence, the “catching up” of the less developed member states to the more affluent ones within the EU was expressly rapid in terms of relative per capita growth measured at current PPPs; it was less impressive if measured at constant PPPs, and rather modest in terms of relative real GDP-growth. As for price levels and the relative price of services to goods, a rapid convergence could be observed until the international financial crisis, but this process halted in 2008. Using pooled OLS and dynamic panel techniques, we found that within the EU there is a negative relationship between the contemporaneous sign of RER-misalignment (based on both the external price level and internal relative prices) and economic growth: over- (under-) valuations are associated with lower (higher) growth. This is mainly due to developments in countries operating under fixed exchange rate regimes. Our results indicate that the level of development does not influence the strength of the growth-misalignment relationship within the EU. These results are robust to the applied panel estimation method. Regarding the external price level, we find that the positive relationship between undervaluation and growth diminishes with increasing size of undervaluation. The aggregate effect of misalignments is significantly negative on both export market shares and the ratio of gross fixed capital formation to GDP: both the competitiveness and the investment channel play an important role in the relationship between growth and RER misalignments. As an extension, we analyse the relationship between growth and the misalignment of wages from productivity levels; “wage-misalignments” are also negatively associated with economic growth. Although our study carries policy messages – in particular, mild real exchange rate undervaluations are positively, while overvaluations are negatively associated with growth and real economic convergence – the RER is an endogenous variable, which is not under direct policy control. Our results point to the importance of a growth strategy avoiding overvaluation on the one hand, and to the futility of aiming at excessive undervaluation, on the other.
    Keywords: real economic and price level convergence; external and internal relative prices; exchange rate misalignment
    JEL: E01 O40 O47 O52 P22 P27
    Date: 2018–10
  12. By: Giulia De Masi; Giorgio Ricchiuti
    Abstract: Fragmentation of production certainly is a possible channel of economic contagion and is playing a key role in the study of Systemic Risk. The investments abroad of firms implicitly create long range economic dependencies between investors and the economies of destination, possibly triggering contagion phenomena. Complex Network theory is a primary tool to highlight economic mutual relationships and paths of economic contagion, shedding light on intrinsic systemic risks. In this paper we reconstruct the networks of EU28 foreign direct investments and we study the networks' evolution from 2003 to 2015 for 38 economic sectors. Our analysis aims at detecting the change of topological properties of foreign direct investment network during the crisis, in order to assess its effect on the architecture of economic relationships. Trough a detailed study of correlations at different time lags between network measurements and macroeconomic variables, we assess systemic risks based on network topology. The main results are: (i) a sharp change of network topology from a sparse to a strongly clusterized network is clearly visible before the crisis and a quantitative evaluation of the network communities is given; (ii) after the crisis, investments from EU28 investors are mainly concentrated in EU28 countries there the Union becomes on of core cluster; (iii) time-lagged correlations between macro-economic variables and topological measurements show that network's topology measures anticipate the change of macro-economic variables.
    Keywords: Foreign Direct Investment, Economic networks, Projected network, Systemic Risks
    JEL: F23 D85
    Date: 2018
  13. By: Altavilla, Carlo; Boucinha, Miguel; Holton, Sarah; Ongena, Steven
    Abstract: Do borrowers demand less credit from banks with weak balance sheet positions? To answer this question we use novel bank-specific survey data matched with confidential balance sheet information on a large set of euro area banks. We find that, following a conventional monetary policy shock, bank balance sheet strength influences not only credit supply but also credit demand. The resilience of lenders plays an important role for firms when selecting whom to borrow from. We also assess the impact on credit origination of unconventional monetary policies using survey responses on the exposure of individual banks to quantitative easing and negative interest rate policies. We find that both policies do stimulate loan supply even after fully controlling for bank-specific demand, borrower quality, and balance sheet strength. JEL Classification: E51, G21
    Keywords: balance sheet strength, bank lending survey, credit demand and supply, non-standard monetary policy
    Date: 2018–11
  14. By: Daniele Girardi (Department of Economics, University of Massachusetts, Amherst); Riccardo Pariboni (Department of Economics, Roma Tre University)
    Abstract: This paper looks at the effect of demand shocks on the investment share of the economy. Using panel data on 20 OECD countries, we show that the rate of growth of autonomous demand (exports, public spending and housing investment) is positively correlated with subsequent values of the share of business investment in GDP. By means of an instrumental-variables strategy, we confirm a positive effect of demand dynamics on the business investment share. We instrument autonomous demand with US demand for imports interacted with exposure to trade with the US, openness to trade of a country’s main export destinations, and military spending. A permanent 1% increase in autonomous demand growth raises the investment share by 1.5 to 1.9 percentage points of GDP in our preferred panel IV specification. Our results provide empirical support for the view that the influence of aggregate demand on capital accumulation can be a major source of hysteresis. Our results are inconsistent with the canonical New Keynesian 3-equations model, the Neo-Kaleckian model with flexible equilibrium utilization and Classical-Marxian growth models. A positive influence of autonomous demand on the investment share is instead compatible with demand-led models in which capacity adjusts to demand in the long-run.
    Keywords: Hysteresis, Investment, Demand-led Growth, Capacity Adjustment, Supermultiplier
    JEL: C26 E11 E12 E22 O41
    Date: 2018
  15. By: Görg, Holger; Hornok, Cecília; Montagna, Catia; Onwordi, George E.
    Abstract: How do labour market policies influence employment's responsiveness to output fluctuations (employment-output elasticity)? We revisit this question on a panel of OECD countries, which also incorporates the period of the Great Recession. We distinguish between passive and active labour market policies and allow for their interactions, i.e. the policy mix, to play a role. We find that the effects of any single policy change are shaped by the broader existing policy-mix within which it takes place. Finally, we evaluate the effect of a move to 'flexicurity' on the employment-output elasticity in each country.
    Keywords: employment-output elasticity,labour market policy,welfare state,flexicurity
    JEL: E24 E32 J21 J65
    Date: 2018
  16. By: Degryse, Hans; Karapetyan, Artashes; Karmakar, Sudipto
    Abstract: We study the impact of higher capital requirements on banks' decisions to grant collateralized rather than uncollateralized loans. We exploit the 2011 EBA capital exercise, a quasi-natural experiment that required a number of banks to increase their regulatory capital but not others. This experiment makes secured lending more attractive vis-à-vis unsecured lending for the affected banks as secured loans require less regulatory capital. Using a loan-level dataset covering all corporate loans in Portugal, we identify a novel channel of higher capital requirements: relative to the control group, treated banks require loans to be collateralized more often after the shock, but less so for relationship borrowers. This applies in particular for collateral that saves more on regulatory capital.
    Keywords: Capital requirements; Collateral; Lending Technology; relationship lending
    JEL: G21 G28 G32
    Date: 2018–11
  17. By: Andrea Mc Namara (National University of Ireland); Pierluigi Murro (LUISS University Author-Name: Sheila O'Donohoe; Waterford Institute of Technology)
    Abstract: We examine the influence of countries lending infrastructure on credit rationing for European SMEs. This lending infrastructure is comprised of countries information, legal, judicial, bankruptcy, social and regulatory environments. Using a sample of 13,957 SMEs from eleven European countries, we find that SMEs in countries in which there is greater information sharing, fewer legal rights, a more efficient judicial system and less efficient bankruptcy system are less likely to be credit rationed. Moreover, an efficient bankruptcy regime is more important for larger and more risky firms in reducing the likehood of they being credit rationed. Equally the impact of banks regulatory regime varies across firm riskiness; a stricter regime results in a greater likehood of credit rationing for more risky or finally weaker firms in contrast to stronger firms where less regulation sees more rationing.
    Keywords: SMEs, Lending Infrastracture, Credit Constraints.
    JEL: G20 G28
    Date: 2018
  18. By: Diana Filipa Cruz Costa (Faculdade de Economia do Porto); Samuel Cruz Alves Pereira (Faculdade de Economia do Porto); Elísio Fernando Moreira Brandão (Faculdade de Economia do Porto)
    Abstract: Costs are an important component for businesses as they affect the results and hence the firm position. Therefore, to understand how they vary with changes in output and what factors influence them is fundamental, not only for managers, but for all agents related to organizations. The traditional theory predicts the existence of two types of costs, the variables and the fixed ones. However, an alternative hypothesis has emerged that accounts for an empirical phenomenon, the "cost stickiness", and later the "anti-stickiness", in which the behaviour of costs is based on discretionary management decisions, under different circumstances. In this paper, we show that the operating costs of Euro Area companies are sticky, since in the face of a positive change in sales costs increase more than decrease when sales fall by the same amount. In addition, we have documented that this phenomenon is reinforced in countries where labour law is more rigid and those whose intervention by the Troika has been necessary, because these two aspects increase the adjustment costs.
    Keywords: cost behaviour, stickiness, anti-stickiness, deliberate resource commitment, adjustment costs
    JEL: J30
    Date: 2018–11
  19. By: Hartung, Benjamin; Jung, Philip; Kuhn, Moritz
    Abstract: A key question in labor market research is how the unemployment insurance system affects unemployment rates and labor market dynamics. We revisit this old question studying the German Hartz reforms. On average, lower separation rates explain 76% of declining unemployment after the reform, a fact unexplained by existing research focusing on job finding rates. The reduction in separation rates is heterogeneous, with long-term employed, high-wage workers being most affected. We causally link our empirical findings to the reduction in long-term unemployment benefits using a heterogeneous-agent labor market search model. Absent the reform, unemployment rates would be 50% higher today.
    Keywords: endogenous separations; labor market flows; Unemployment insurance
    JEL: E24 J63 J64
    Date: 2018–11
  20. By: Ashley Ward (OECD); María Belén Zinni (OECD); Pascal Marianna (OECD)
    Abstract: Cross-country differences in the measurement of labour input contribute to observed productivity gaps across countries. In most countries, labour force surveys (LFS) form a primary source of information for employment related statistics, such as persons employed, employees and hours worked. However, because the coverage of LFS does not fully align with the coverage of activities used to estimate GDP, additional adjustments relying on complementary sources, such as administrative or business statistics, are often applied to bridge conceptual differences, and in many countries, the use of these sources is often preferred to LFS data. Evidence from the 2018 OECD/Eurostat national accounts labour input survey shows that the adjustments made to align measures of labour input with the corresponding measures of production according to the domestic concept, vary considerably across countries, with many countries making no adjustments, in particular, for the measurement of hours worked. This paper demonstrates that countries making no adjustments to average hours worked measures extracted from the original source, such as self-reported hours actually worked in the LFS, appear to systematically over-estimate labour input and, so, under-estimate labour productivity levels. To illustrate the size of this bias, for this group of countries, the paper adopts a simplified component method that introduces a series of explicit adjustments on working time using information available in LFS and complementary sources. The results point to a reduction in relative productivity gaps of around 10 percentage points in many countries compared to current estimates. Although future releases of OECD productivity (levels) statistics will incorporate these changes, it is important to stress that these estimates will only be used as a stop-gap while countries making no, or minimal adjustments, work to leverage all available data sources to produce average hours worked estimates that align with the national accounts domestic concept and that address self-reporting bias; which is the paper’s principal recommendation for those countries that currently make no or only partial adjustments. Indeed, many EU member states, coordinated by Eurostat, are already moving in this direction, with ESA 2010 derogations set to expire by 2020.
    Keywords: employment, hours worked, labour input, labour productivity, mismeasurement
    JEL: E1 E24 E26
    Date: 2018–12–10
  21. By: Ortiz, Isabel,; Durán-Valverde, Fabio.; Urban, Stefan.; Wodsak, Veronika.; Yu, Zhiming.
    Abstract: From 1981 to 2014, thirty countries privatized fully or partially their public mandatory pensions; as of 2018, eighteen countries have reversed the privatization. This report: (i) analyses the failure of mandatory private pensions to improve old-age income security and their underperformance in terms of coverage, benefits, administrative costs, transition costs, social and fiscal impacts, and others; (ii) documents the reversals of pension privatization, the laws, governance, new entitlements, financing and contribution rates of the new public pension systems; (iii) provides guidance on the key policy steps to reverse pension privatization, for those countries considering returning back to a public system.
    Keywords: pension scheme, social protection, Eastern Europe, Latin America
    Date: 2018

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