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on European Economics |
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Issue of 2022‒01‒31
nine papers chosen by Giuseppe Marotta Università degli Studi di Modena e Reggio Emilia |
| By: | Ketevani Kapanadze |
| Abstract: | This paper studies two major stages of European integration, the expansion of the European Union (EU) in 2004 and the Schengen Area in 2008, and their impacts on economic performance in subregions of Central and Eastern European (CEE) countries. Using European regional data at the NUTS3 level and disaggregated synthetic control method, I construct counterfactuals for sub-regions of CEE countries. This approach allows me to assess regional treatment effects (RTEs) and to study the heterogeneous effects of European integration. I find that the benefits of EU and Schengen memberships to annual GDP per capita are approximately 10% less in border regions, relative to interior areas. The results expose regional economic disparities, as border regions lose relative to interior regions since European integration. Furthermore, integration facilitators in border regions such as fewer geographical barriers, more service employment, and positive attitudes toward the EU did not reduce economic disparities. The results show that the gap persists, regardless of some complementarities. Thus, the main implication of this paper is that sub-regions of CEE countries are far from being fully converged, and that European integration instead seems to have spurred sub-regional divergence. |
| Keywords: | CEE countries; European integration; RTEs; borders; dissagregated synthetic controls; |
| JEL: | F15 F16 F20 R12 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp716&r= |
| By: | Roberta Cardani; Olga Croitorov; Massimo Giovannini; Philipp Pfeiffer; Marco Ratto; Lukas Vogel |
| Abstract: | The COVID-19 pandemic led to a sharp contraction of economic activity in the euro area (and worldwide). Its anatomy differs strongly from other crises in recent history. We analyse the short-term economic effects of the COVID-19 shock through the lens of an estimated DSGE model. We augment the canonical DSGE set-up with “forced savings" (lockdowns, social distancing), labour hoarding (short-time work) and liquidity-constrained firms to capture salient demand and supply effects of the COVID shock and the containment and stabilisation policies. Shock decompositions with the estimated model show the dominant role of “lockdown shocks" (“forced savings", labour hoarding) in explaining the quarterly pattern of real GDP growth in 2020, complemented by a negative contribution from foreign and investment demand particularly in 2020q2 and a negative impact of persistently higher (precautionary) savings. The initial inflation response has been modest compared to the severity of the recession. |
| JEL: | C11 E1 E20 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:153&r= |
| By: | Philipp Mohl; Gilles Mourre; Sven Langedijk; Martijn Hoogeland |
| Abstract: | This paper provides a quantitative assessment on the impact of media reporting about fiscal rules and fiscal councils on the effectiveness of EU fiscal rules. Media visibility can contribute to more effective fiscal rules, since it can improve transparency, contribute to a more informed debate and act as an informal enforcement device for non-compliance, through reputational damage. Some international organisations take media visibility into account when assessing the strength of fiscal frameworks. However, the strength of media visibility has been based on expert judgement, which can provide a subjective and incomplete picture. The paper explores a novel media database of almost 300 million of articles maintained by the Commission, covering 27 EU Member States and the UK in 2004-2020. We analyse the media sources using a text mining approach, which has been applied frequently in the economic literature to assess the effects of media visibility on financial markets. The key findings can be summarised as follows: First, media reporting on fiscal rules appears to be more frequent in countries with well-developed fiscal institutions, but also during bad economic times or when the Commission releases its key fiscal policy news. Second, nationwide and influential media appear to report relatively more frequently on fiscal rules than regional media. References to fiscal rules in the media refer either to the need to keep public debt under control or to support growth and avoid austerity-related inequality, which reflects the existence of different views regarding the main objective of fiscal rules: fiscal sustainability vs. macroeconomic stabilisation. Third, panel regressions show that media visibility appear to have contributed to the effectiveness of EU fiscal rules, as measured by the stronger numerical compliance with these rules. Media from nationwide sources tend to be more effective than regional media. Finally, the creation of fiscal councils appears to have further increased the media reporting on fiscal rules.. |
| JEL: | C23 D40 E31 L51 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:155&r= |
| By: | Piotr Lewandowski; Karol Madoń; Ronald Bachmann; Myrielle Gonschor |
| Abstract: | We study the effects of robot exposure on worker flows in 16 European countries. Overall, we find small negative effects on job separations and small positive effects on job findings. Labour costs are shown to be a major driver of cross-country differences: in countries with lower labour costs, robot exposure had more positive effects on hirings and more negative effects on separations. These effects were particularly pronounced for workers in occupations intensive in routine manual or routine cognitive tasks, but were insignificant in occupations intensive in non-routine cognitive tasks. For young and old workers in countries with lower labour costs, robot exposure had a beneficial effect on transitions. Our results imply that robot adoption increased employment and reduced unemployment in most European countries, mainly through lower job separation rates. |
| Keywords: | robots, technological change, tasks, labour market effects, Europe |
| JEL: | J23 J24 O33 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp012022&r= |
| By: | Chlechowitz, Mara |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s102021&r= |
| By: | Menyhert, Balint (European Commission - JRC); Cseres-Gergely, Zsombor (European Commission - JRC); Kvedaras, Virmantas (European Commission - JRC); Mina, Benedetta (University of Rome, Tor Vergata); Pericoli, Filippo (European Commission - JRC); Zec, Slavica (European Commission - JRC) |
| Abstract: | This report is the third and final deliverable of the project “Measuring and monitoring absolute poverty (ABSPO)”, a joint initiative of DG Employment, Social Affairs and Inclusion and the Joint Research Centre of the European Commission launched in December 2018. The main objective of this pilot project is to take stock of the existing EU framework for poverty measurement, and explore the development of a new cross-country comparable absolute poverty measure for potential EU-wide use. This Report contains a comprehensive analysis of all relevant measurement aspects, and presents three innovative methodologies based on reference budgets and survey-based statistical methods to calculate new absolute monetary poverty thresholds in a harmonised manner across the EU. The resulting ABSPO poverty estimates are broadly robust to different modelling choices, aligned with most European citizens’ subjective views on poverty, and consistent with the observed patterns of material and social deprivation. They yield a series of new and policy-relevant insights about the extent, distribution and dynamics of poverty between and within Member States. The Report also considers how ABSPO methodologies may be scaled up for regular EU-wide regular measurement, and makes important contributions to a number of different thematic domains of poverty measurement and broader social policy analysis. |
| Keywords: | Poverty, Absolute poverty, Poverty thresholds, Reference budgets |
| JEL: | D31 D63 H53 I32 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc127444&r= |
| By: | Giammetti, Raffaele; Papi, Luca; Teobaldelli, Desiree; Ticchi, Davide |
| Abstract: | This paper investigates the effects of a retreat from global economic integration on the European regional production network for the period 2000-2010. We find that production has become increasingly fragmented, although the degree of heterogeneity across regions is substantial. This heterogeneity is also present in the direct and indirect effects of three different deglobalisation scenarios that we simulate. Our results show that deglobalisation generates winners and losers. Specifically, two groups of regions emerge; regions that would benefit from a return to a less integrated world, and regions that would instead gain from a strengthening of the European production network. |
| Keywords: | Reshoring, Global Value Chains, production networks, input-output, regional fragmentation, supply chains interruption. |
| JEL: | D57 F16 F62 F66 |
| Date: | 2021–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:111135&r= |
| By: | Thum-Thysen, Anna; Voigt, Peter; Weiss, Christoph |
| Abstract: | This paper investigates capital formation with a view at various tangible and intangible assets across Europe. Using novel datasets both at macro and firm level, we estimate translog production functions to assess complementarities at different aggregation levels. At macro-level, our evidence suggests complementarities between tangibles and intangibles and between National Accounts and non-National Accounts intangibles. Using firm-level data, we explore more disaggregated asset classes and find that investing simultaneously in software, training of employees, and business process improvements is associated with better firm performance. Our analysis demonstrates that policy support that aims at stimulating investment only in certain assets may fall short in unlocking its own full potential. The emphasis should rather be on addressing investment bottlenecks arising from market imperfections, while remaining non-discriminatory with a view at what sort of capital deepening is envisaged and leaving it to the firm to find the most appropriate mix of assets. |
| Keywords: | intangible capital,asset complementarities,labour productivity,investment,innovation |
| JEL: | E01 E22 O34 O4 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:eibwps:202112&r= |
| By: | Anna Thum-Thysen; Peter Voigt; Christoph Weiss |
| Abstract: | This paper investigates capital formation with a view at various tangible and intangible assets across Europe. We assess to what extent there are complementarities among different asset types, i.e. investment in one asset type affecting the productivity of an investment in another. Using novel datasets at both macro and firm level, we estimate translog production functions at different aggregation levels to assess complementarities both at the within-country and the within-sector level. At macro-level, evidence suggests complementarities between tangibles and intangibles and between National Accounts and non-National Accounts intangibles. At firm-level data, we explore more disaggregated asset classes and find that investing simultaneously in software, training of employees, and business process improvements is associated with better firm performance. Within a sector, firms tend to choose to invest either in own R&D or in embedded R&D and training. Our analysis demonstrates that policy support that aims at stimulating investment only in certain assets (while excluding others) may fall short in unlocking its own full potential. The emphasis should rather be on addressing investment bottlenecks arising from market imperfections, while remaining non-discriminatory with a view at what sort of capital deepening is envisaged, i.e. leaving it to the firm to find the most appropriate mix of assets. Accordingly, investment support programmes should generally be open to include intangible assets, notably also those not captured as such in the National Accounts, such as training and organisational capital, and help addressing challenges arising from collateralising such investments. |
| JEL: | E01 E22 O34 O4 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:euf:dispap:152&r= |