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on European Economics |
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Issue of 2024–01–01
forty-five papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Stempel, Daniel; Zahner, Johannes |
| JEL: | E58 C45 C53 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277627 |
| By: | Briodeau, Clémence; Checherita-Westphal, Cristina |
| Abstract: | This paper estimates a fiscal reaction function (FRF) framework for euro area countries to test for the impact of changes in inflation on fiscal policy. We find evidence of non-linear short-term effects of HICP inflation on the primary balance after controlling for other relevant factors. Over the period 1999-2022, we unveil an inverse U-turn relationship and an inflation turning point - beyond which its short-term (contemporaneous) impact on the primary balance starts being negative - at somewhat above 4% for the sample of mature euro area economies (EA-12, first twelve EA members) and around 6% for the whole sample of euro area countries in 2022 (EA-19). Using an alternative measure of “inflation surprise” (available for the period 2003-2022) yields robust results in the larger EA-19 sample and lowers the threshold to just below 5%. In terms of channels, the non-linear effects are found to propagate through both the primary expenditure and the revenue ratio (more robustly through the former) in the EA-12 sample, while only the combined effect on the primary balance seems to prevail for EA-19. These results reflect primarily the most recent high inflation episode and indicate that in such conditions inflation can be costly for public finance flows even in the shorter run. JEL Classification: H60, E62, E31, C33 |
| Keywords: | euro area, fiscal reaction function, inflation, panel models |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20232880 |
| By: | Ceglar, Andrej; Boldrini, Simone; Lelli, Chiara; Parisi, Laura; Heemskerk, Irene |
| Abstract: | Biodiversity – the variety of life on Earth – is essential for sustaining the healthy ecosystems that our economy and banks depend on. Despite the clear benefits of a healthy natural world for people and the economy, humanity is putting immense pressure on nature and biodiversity. Economic activities that rely on healthy nature are often responsible for generating environmental pressures. It is important to assess the impact that firms and financial institutions have on nature degradation, in order to reveal their exposure to transition risk and highlight the need to move towards an economic system that values nature, rather than putting it at risk. This study analyses the contribution of euro area economic activities – and the bank loans provided to enable them – to biodiversity loss by estimating biodiversity footprints. The datasets we use account for approximately €4.3 trillion in corporate loans to around 4.2 million companies located in the euro area, issued by more than 2, 500 unique consolidated euro area banks. Considering two primary drivers of biodiversity loss (land-use change and climate change), the results show that the economy has had a significant impact on biodiversity, equivalent to the loss of 582 million hectares of “pristine” natural areas worldwide. Even though the impact on biodiversity is highest in Europe, the supply chains of companies are important determinants of their indirect biodiversity footprint worldwide. Asia and Africa have the largest areas impacted by activities that take place in company supply chains. Additionally, financing of economic activities with a high global impact on nature is concentrated: the ten banks with the highest financing share are responsible for financing around 40% of the total global impact of euro area firms. [...] JEL Classification: C55, G21, G38, Q5 |
| Keywords: | biodiversity loss, climate-nature nexus, economy, impact, input-output table, materiality score, nature degradation |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2023335 |
| By: | Filippo Pallotti; Gonzalo Paz-Pardo; Jiri Slacalek; Oreste Tristani; Giovanni L. Violante |
| Abstract: | We measure the heterogeneous welfare effects of the recent inflation surge across households in the Euro Area. A simple framework illustrating the numerous channels of the transmission mechanism of surprise inflation to household welfare guides our empirical exercise. By combining micro data and aggregate time series, we conclude that: (i) country-level average welfare costs—expressed as a share of 2021–22 income—were larger than a typical recession, and heterogeneous, e.g., 3% in France and 8% in Italy; (ii) this inflation episode resembles an age-dependent tax, with the elderly losing up to 20%, and roughly half of the 25–44 year-old winning; (iii) losses were quite uniform across consumption quantiles because rigid rents served as a hedge for the poor; (iv) nominal net positions are the key driver of heterogeneity across-households; (v) the rise in energy prices generated vast variation in individual-level inflation rates, but unconventional fiscal policies were critical in shielding the most vulnerable households |
| JEL: | E31 E58 G51 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:31896 |
| By: | De Grauwe, Paul; Ji, Yuemei |
| Abstract: | We revisit the fragility of the Eurozone which arises because the sovereigns in the Eurozone issue debt in a currency (the euro) over which they have no control. This prevents them from giving a guarantee to bond holders that they will always be repaid at maturity. This fragility can trigger self-fulfilling liquidity crises, such as those that erupted during 2010–12. We document how this fragility has evolved over time and how it has been affected by the reforms in the governance of the Eurozone since the sovereign debt crisis of 2010–12. This will allow us to analyze the most recent episode that started with the emergence of the pandemic in 2020. The latter has, up to now, not led to a new debt crisis in the Eurozone, despite the fact that the shock produced by the pandemic was at least as large as the financial crisis of 2007–08. We document how during the pandemic the new governance of the Eurozone prevented this shock from leading to a new sovereign debt crisis. We end with a discussion of the prospects for the future and ask the question of whether the fragility of the Eurozone is a thing of the past. |
| JEL: | F3 G3 |
| Date: | 2022–02–01 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:112543 |
| By: | Koetter, Michael; Nguyen, Huyen |
| Abstract: | This paper assesses the progress made towards the creation of the European Banking Union (EBU) and the evolution of the banking industry in the European Union since the financial crisis of 2007. We review major regulatory changes pertaining to the three pillars of the EBU and the effects of new legislation on both banks and the real economy. Whereas farreaching reforms pertaining to the EBU pillars of supervision and resolution regimes have been implemented, the absence of a European Deposit Scheme remains a crucial deficiency. We discuss how European banks coped with recent challenges, such as the Covid-19 pandemic, a high inflation environment, and digitalization needs, followed by an outlook on selected major challenges lying ahead of this incomplete EBU, notably the transition towards a green economy. |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwhstu:280432 |
| By: | Pala, Melissa |
| JEL: | G01 G15 G18 G21 D85 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277572 |
| By: | Muellbauer, John; De Bonis, Riccardo; Liberati, Danilo; Rondinelli, Concetta |
| Abstract: | Most econometric policy models at central banks and elsewhere use an aggregate consumption function based on textbook theory. This assumes that the 'representative household' owns only an aggregate form of wealth, proxied by net worth, and never faces borrowing or liquidity constraints or transactions costs. This is inconsistent with the modern view of heterogeneous agent behaviour under uncertainty in incomplete markets. Based on data from 1980 to 2019, the conventional formulation for an aggregate consumption function for Italy is strongly rejected. The results show that the marginal propensities to consume out of household deposits and semi-liquid financial assets such as T-bills and mutual funds are greater than for less liquid assets. A significant positive effect from housing wealth is substantially offset by the negative effect of affordability measured by the house price-to-income ratio. |
| Keywords: | financial wealth, liquid and illiquid assets, permanent income, housing wealth |
| JEL: | E21 E32 E44 E51 |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:amz:wpaper:2023-27 |
| By: | Miguel García Duch (Instituto Complutense de Estudios Internacionales (ICEI), Universidad Complutense de Madrid.) |
| Abstract: | This article examines Thirlwall's Law for a sample of 9 eurozone countries from 1992 to 2019. Thirlwall's Law states that a country's long-run growth rate is determined by the ratio of its income elasticities of demand for exports and imports. Using product level data from COMTRADE, this article constructs 5 main sectors based on technological intensity and estimates exports and imports equations for each sector and country in error correction model form. Estimation techniques are seemingly unrelated regressions for exports and three stages least squares for imports. The results reveal significant variations in the income elasticities across sectors and countries, with a strong correlation between higher elasticities for more technological sectors, especially among the so-called central economies. The article concludes that Thirlwall's Law is both a strong predictor of actual growth rates and a useful tool for understanding the role of external imbalances on Eurozone’s economic performance during the last decades. |
| Keywords: | : Balance-of-Payments-Constrained Growth; Thirlwall’s Law; Multi-Sector Analysis; Current Account Imbalances; Error Correction Models. |
| JEL: | C30 E12 F45 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ucm:wpaper:2302 |
| By: | Karina Doorley; Jan Gromadzki; Piotr Lewandowski; Dora Tuda; Philippe Van Kerm |
| Abstract: | We study the effects of robot penetration on household income inequality in 14 European countries between 2006–2018, a period marked by the rapid adoption of industrial robots. We establish that, similarly to the United States, automation reduced relative hourly wages and employment of directly affected demographic groups in Europe. We then use the estimated wage and employment shocks as input to the EUROMOD microsimulation model to assess how robot-driven shocks affected household income inequality. Automation had very small effects on income inequality. Household risk-sharing and tax and welfare policies largely absorbed wage and employment shocks caused by automation. |
| Keywords: | robots, automation, tasks, income inequality, wage inequality, microsimulation |
| JEL: | J24 O33 J23 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:wpaper:wp062023 |
| By: | Stefan Jestl (The Vienna Institute for International Economic Studies, wiiw); Roman Römisch (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The paper analyses drivers of migration in carbon-intensive and non-carbon-intensive regions in the EU. Using a mix of econometric methods, such as spatial panel and spatial cross-sectional methods, as well as geographically weighted regressions on data for EU NUTS-2 and NUTS-3 regions, the results indicate that particularly carbon-intensive regions in Central and Eastern Europe are not only challenged by a potential decline in carbon-intensive employment but also by outward migration flows that could diminish their prospects for longer-term economic prosperity. From a policy point of view, the results indicate that policies focusing on the replacement of the lost jobs in carbon-intensive industries might not be enough for the carbon-intensive regions in Central and Eastern Europe. Instead, these regions need a simultaneous package of additional policies to improve their attractiveness. |
| Keywords: | carbon-intensive regions, green transition, regional migration |
| JEL: | Q50 R11 R23 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:wii:wpaper:236 |
| By: | Ringel, Marc |
| Abstract: | Climate change entails many situations of tele-coupling. We analyze an example in the field of European climate and energy policy. The EU aims at an almost full decarbonisation of its economy by 2050. Achieving this objective asks for transforming the energy sectors of EU Member States. These are responsible for 80% of carbon emissions. Further to this policy coupling, the EU transformation objectives have to be implemented by the Member States, regions and local actors. This proves especially complex in the field of energy efficiency. Here, a variety of policy instruments and actors are in place. In our contribution, we investigate in the question how multi-level governance arrangements in the energy efficiency field are designed. We focus on Germany as example for a federal state setting. Our review method comprises literature content analysis, primary sources, expert interviews and an in-depth screening of the German Sustainable Energy Action Plans. We find that formal vertical coordination has been successfully backed up by horizontal and especially informal governance mechanisms, leading to a model of polycentric governance. This model might serve as blueprint for other multi-level governance arrangements. Yet, we find that the “last mile” of this coordination still needs strengthening: Local actors need more active engaging and empowering to reap the full potential of the governance arrangements. |
| Date: | 2023–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:dar:wpaper:141593 |
| By: | Nöller, Marvin; Balleer, Almut |
| JEL: | E31 E52 C22 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277638 |
| By: | Silvia Peracchi (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: | The massive inflows of migrants across the Mediterranean has generated widespread political attention and backlash. This paper explores the impact of migrants’ displacements at the EU’s internal borders, due to militarized border push-backs and arising from the European migrant crisis in the 2010s. It investigates how these displacements affect both the local news market and the local political economy. To do so, it relies on a policy implemented in June 2015, whereby French authorities introduced militarized controls at the Italian frontier to redirect migrants and asylum seekers, originally intending to cross the border irregularly, back to the Italian territory. These dynamics created a quasi-experimental setting, where natives in the Italian region were unevenly exposed to pushed back migrants: those residing close to the French border experienced more directly the evolution of events. Using novel text and count data from local news in the interested areas of Liguria, Italy, between 2012 and 2019, this study finds that, following the border push-backs, media coverage of migration decayed with commuting distance to the border. Conversely, anti-immigrant discourse in the news exhibited a relative increase in areas least directly impacted by the border events. Exploring further this framing dimension, the results turn out to be shaped by readers’ demand and to be closely associated with local news penetration. Finally, this study documents that voting preferences share a similar direction to news slant, while a related broad pattern also appears in hate-crime records. |
| Keywords: | Media slant, EU borders, immigration, diff-in-diff |
| JEL: | F22 L82 F50 |
| Date: | 2023–12–11 |
| URL: | https://d.repec.org/n?u=RePEc:ctl:louvir:2023021 |
| By: | COULIBALY, Niénéyéri Mamadou |
| Abstract: | The aim of this study is to analyse trade between the member countries of the West African Economic and Monetary Union (WAEMU) and those of the European Union (EU) pre-Brexit over the period 2014-2019. It estimates a gravity model based on panel data. Three econometric estimation techniques are used : the WITHIN method, the Generalised Least Squares (GLS) method and the Hausman and Taylor (HT) method. These different estimation techniques are then compared to determine which is the most appropriate. The data used are secondary data from several sources : the International Monetary Fund (World Economic Outlook), the World Bank (World Development Indicators), the United Nations (UN Comtrade) and the ephemeride website. The results show that trade between these two groups of countries is positively and significantly influenced by income in WAEMU countries, infrastructure in WAEMU countries and population in EU countries. They also show that when an EU country is landlocked, its trade flows with WAEMU countries are reduced, while at the same time, the landlocked status of a WAEMU country does not affect its trade with EU countries. Variables such as the bilateral real exchange rate, distance, language and colonial links were found to be insignificant. |
| Keywords: | Trade, trade flows, gravity model, EU, WAEMU and Brexit |
| JEL: | C13 C33 F10 F15 |
| Date: | 2023–09 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:119277 |
| By: | Latifi, Albina; Naboka-Krell, Viktoriia; Tillmann, Peter; Winker, Peter |
| JEL: | C89 E60 E62 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277624 |
| By: | Sanvi Avouyi-Dovi; Lorraine Chouteau; Lucas Devigne; Emmanuelle Politronacci |
| Abstract: | We build a model based on a structural dynamic approach to assess the Non-Observed Economy (NOE) over the period 1990-2019 in France. Our strategy is focused on a systematic scan of the potential causes of shadow economy. We show that the discrepancy between electricity consumption and real GDP growth rates is the main driver of the NOE. However, factors, such as drug offences and net shipments of banknotes also have significant effects on hidden activities even though their effects do not seem to be as strong. The NOE remains non-negligible in France, but its ratio, relative to the GDP, has decreased considerably in the 2000s. Finally, we observe strong links between the NOE index and the cash demand indicators. Thus, concordance tests show a noticeable synchronization between the NOE indexes (global and legal components) and the net issuance of banknotes, especially the total net issuance and the net issuance of the €50 and €200 denominations. Furthermore, the NOE indexes and GDP as well as self-employment are synchronized. We also observe positive correlations between the cyclical components of the total net issuance of banknotes and the estimated shadow economy indexes. Finally, there are some bi-directional causal relationships between the NOE indexes and the aggregate banknote demand. However, there is only a unidirectional causality between these indexes and the demand for Small denominations (€5, €10, €20). |
| Keywords: | Shadow Economy, Non-Observed Economy, Structural Equations, MIMIC Model |
| JEL: | C32 C51 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:bfr:banfra:930 |
| By: | CAPPELLANO Francesco; MARQUES SANTOS Anabela (European Commission - JRC); DOTTI Nicola Francesco |
| Abstract: | This paper provides quantitative evidence on the geography of regional readiness to tackle climate change using data from France, Germany, Italy, Poland, and Spain. Following Cappellano et al. (2022), we estimate a composite indicator that reports the situation of regions in these countries between 2009 and 2020 regarding the directionality of their Science and Technological Innovation and policy priorities to fight climate change. Using regression analysis, we assess the relationship between such directionality and the degree of risk of disasters (coastal floods, river floods, and landslides) they face in the short, medium, and long-term as a result of climate change effects. Results shows a positive relationship between estimated risk projection and climate change preparedness. However, a more in-depth analysis demonstrates the complexity of such geographical “problem-solution convergence”. Indeed, more developed regions are the ones that appear more ready to tackle climate change effects compared with transition and less developed regions. |
| Keywords: | Climate Change; Innovation; Public Policy; Regional Economics; Europe |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:termod:202310 |
| By: | Antonio Cutanda (Universidad de Valencia, Valencia, Spain. ORCID number: 0000-0003-2066-4632); Juan A. Juan A. Sanchis-Llopis (Universidad de Valencia and ERICES, Valencia, Spain. ORCID number: 0000-0001-9664-4668) |
| Abstract: | In this paper we estimate the housing wealth effect on non-durable consumption using data from the Spanish Survey on Household Finances (Encuesta Financiera de las Familias, SHF), for the period 2002-2017. We aim at identifying the effect of anticipated and unanticipated housing wealth changes on consumption with the sample of homeowners, following Jappelli and Pistaferri (2017). Our results lead us to conclude that there exists a strong housing wealth effect on consumption for the Spanish households. This provides evidence against the permanent income model. Further, we detect a high excess sensitivity of consumption to income reinforcing the above conclusion. Finally, by adding the mortgage growth rate to the estimated equation, we do not detect evidence that the Spanish data support the collateral channel hypothesis. |
| Keywords: | Wealth effect on consumption, Subjective expectations, Collateral channel hypothesis, Instrumental variables, Panel data. |
| JEL: | C23 C26 D12 D15 E21 |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:eec:wpaper:2309 |
| By: | Peltonen, Juho |
| Abstract: | This paper estimates the extent to which unemployment in Germany would have been increased during the Covid-19 recession without a short-time work (STW) labor-market policy which enables employers to reduce temporarily the working hours of full-time workers. A Bayesian estimation of a general equilibrium model with a STW policy, and a simulation of a counterfactual model without STW, show that the German unemployment rate would have been 4.2 percentage points higher without the policy. These results indicate that the STW participates in preventing excess job destruction during economic downturns, and in stabilizing unemployment fluctuations over business cycles. |
| Keywords: | Search and matching, short-time work, Bayesian estimation |
| JEL: | E24 E32 J63 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:119238 |
| By: | Dahlström, Petter (Royal Institute of Technology); Lööf, Hans (Royal Institute of Technology); Sjöholm, Fredrik (Research Institute of Industrial Economics); Stephan, Andreas (Linnaeus University) |
| Abstract: | The net-zero agreement on carbon emission from Paris 2015 gives a key role to fossil-free energy technologies with an expected multifold growth rate over the coming decades, when successively replacing oil, coal, and gas. In this paper, we delve into the EU’s competitive advantage in the evolving trade war in clean energy, investigate European strengths and weaknesses in innovation and production, and discuss the impact of the upcoming trade war on the global warming challenge. Our results show that the EU has a strong position in innovation capabilities in the strategic net-zero technologies. However, this is not matched by production capabilities: EU has only a few firms among the leading manufacturers in net-zero technologies. |
| Keywords: | energy geopolitics; net-zero technologies; patents; innovation |
| JEL: | F02 O18 Q50 R10 |
| Date: | 2023–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cesisp:0495 |
| By: | Vulović, Marina |
| Abstract: | The economic and financial crisis of 2008 disrupted the European Union's (EU) enlargement policy for the Western Balkans. At least since that time, the region has seen greater involvement by economic actors from non-EU countries such as China, Russia, Turkey and the United Arab Emirates (UAE). Their engagement has been most evident in the areas of direct investment, trade and energy security. Investments from these countries can increase the risk of 'corrosive capital', which could have a negative impact on the development of the rule of law and democracy in the Western Balkans. In view of a visibly intensifying rivalry between the EU on the one hand and Russia and China on the other, the question therefore arises as to how the EU can react to and strategically counteract the intensified economic interconnectedness of the Western Balkans with these actors. |
| Keywords: | Western Balkans, Western Balkan countries, European Union, EU, China, Russia, Turkey, United Arab Emirates, UAE, direct investment, trade relations, energy security, investment in renewable energy, gradual EU accession, EU enlargement process, Instrument for Pre-Accession Assistance, IPA, Economic and Investment Plan, EIP |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:279922 |
| By: | Liliana Cuccu (AQR-IREA, University of Barcelona); Vicente Royuela (AQR-IREA, University of Barcelona); Sergio Scicchitano (John Cabot University) |
| Abstract: | This paper investigates the surge in Involuntary Part-Time (IPT) employment in Italy from 2004 to 2019, exploring its impact on various socio-economic groups and adopting a spatial perspective. Our study tests the hypothesis that technological shifts, specifically routine biased technological change (RBTC), and the expansion of household substitution services contribute to IPT growth. We uncover a widening negative gap in IPT prevalence among marginalized groups- women, young, and less skilled workers. After controlling for sector and occupation, the higher IPT propensity diminishes but remains significant, hinting at persistent discrimination. Additionally, segregation into more exposed occupations and sectors intensifies over time. Leveraging province-level indicators, and using a Partial Adjustment model, we find support for RBTC’s correlation with IPT, especially among women. The impact of household substitution services is notably pronounced for women, highlighting sector segregation and gender norms’ influence |
| Keywords: | Involuntary part-time, Precarisation of labour, Automation JEL classification: J21, J24, O33. |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:aqr:wpaper:202307 |
| By: | MOLICA Francesco (European Commission - JRC) |
| Abstract: | The paper presents a critical assessment of EU Cohesion Policy’s rationale and specific features through the lenses of theories loosely referred to as ‘new industrial policy’. Theoretical work in this areas is important in order to clarify the role of Cohesion Policy in the context of the current revival of industrial policies and their growing importance for Europe’s economic, geopolitical, technological and climate ambitions. The paper explores the main challenges Cohesion Policy should address in order to fully embrace the experimentalism and directionality entailed in new industrial policy, going beyond the limitations of Smart Specialisation Strategies in reflecting this perspective. At the same time, a set of arguments is presented in support to the idea that the new industrial policy paradigm can be instrumental in bringing more theoretical salience and political prominence to Cohesion Policy |
| Keywords: | Cohesion Policy; European Union; Smart Specialisation Strategy; Industrial Policy |
| Date: | 2023–10 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:termod:202309 |
| By: | Endres, Lukas; Behringer, Jan; van Treeck, Till |
| JEL: | D1 D31 E21 R21 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277689 |
| By: | Strunz, Franziska; Gödl, Maximilian |
| JEL: | C22 C53 E37 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277707 |
| By: | Odersky, Moritz; Löffler, Max |
| JEL: | Q52 Q54 D30 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277684 |
| By: | Dirk Krueger; Egor Malkov; Fabrizio Perri |
| Abstract: | We use panel data from the Italian Survey of Household Income and Wealth from 1991 to 2016 to document empirically what components of the household budget constraint change in response to shocks to household labor income, both over shorter and over longer horizons. We show that shocks to labor income are associated with negligible changes in transfers and non-labor income components, modest changes in consumption expenditures, and large changes in wealth. We then split the sample in households which do not own business or real estate wealth, and households who do. For the first group, we find that consumption responses are more substantial (and increasing with the horizon of the income shock) and wealth responses are much smaller. We show that, for this group, a version of the standard PIH framework that allows for partial insurance against even permanent income shocks can explain well the consumption and wealth responses, both at short and long horizons. For the second group the standard framework cannot explain the large changes in wealth associated with income shocks. We conclude that models which include shocks to the value of household wealth are necessary to fully evaluate the sources and the consequences of household resource risk. |
| JEL: | D99 E21 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:31894 |
| By: | DIJKSTRA Lewis (European Commission - JRC); JACOBS-CRISIONI Chris |
| Abstract: | This paper develops a methodology to define functional rural areas in the EU and seeks feedback on the method and the results. Functional rural areas are designed to cover all the territories outside functional urban areas. They are constructed in three steps. First, we define rural centres: they are the largest town or village within a 10-minute drive. Second, we create catchment areas by assigning every grid cell to the nearby rural centre that has the greatest gravitational pull. Third, we combine small and nearby catchment areas. We combine catchment area until each has at least 25, 000 inhabitants or is more than an hour’s drive away from the surrounding catchment areas. We also combine catchment areas that have centres that are less than a 30-minute drive apart, even if they have a population of at least 25, 000 inhabitants. Next, we show that functional rural areas are more harmonised in terms of population and area size than LAUs and NUTS-3 regions. The analysis of population change and of the distance to the nearest school shows that the results by functional area are less volatile than the results per LAU and show more detail than the results per NUTS-3 regions. Functional rural areas can inform policies that promote access to services and that respond to demographic change. They can also be used to inform transport infrastructure investments and public transport provision. |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:ipt:termod:202311 |
| By: | Schmid, Ramona |
| JEL: | J16 J31 J38 J71 J78 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277646 |
| By: | Clément Anne; Cyril Chalendard; Ana Fernandes; Bob Rijkers; Vincent Vicard |
| Abstract: | To identify transactions at risk of tariff evasion, this paper matches export transaction data from France with import transaction data from Madagascar using container identifiers. Reporting discrepancies between exporters and importers are prevalent but small, with over two-fifths of importers reporting in a way that increases their tariff liability. Yet, aggregate tariff revenues are 24 percent lower due to discrepancies. These revenue losses are highly concentrated: the top five evaders account for three-quarters of all tariff revenue losses and larger shipments are more at risk of evasion. Tariff enforcement in Madagascar is ineffective and only marginally mitigates revenue losses. |
| Keywords: | Tax Evasion;Mirror Statistics;Trade;Corruption;Exporters;Importers;Tariffs |
| JEL: | F14 H26 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:cii:cepidt:2023-22 |
| By: | Heider, Florian; Schlegel, Jonas; Tröger, Tobias; Wahrenburg, Mark |
| Abstract: | This study looks at potential windfall profits for the four banking acquisitions in 2023. Based on accounting figures, an FT article states that a total of USD 44bn was left on the table. We see accounting figures as a misleading analysis. By estimating marked-based cumulative abnormal returns (CAR), we find positive abnormal returns in all four cases which when made quantifiable, are around half of the FT's accounting figures. Furthermore, we argue that transparent auctions with enough bidders should be preferred to negotiated bank sales. This document was provided/prepared by the Economic Governance and EMU Scrutiny Unit at the request of the ECON Committee. |
| Keywords: | Bank Resolution, Bank Acquisition, Auctions, "Event Study" |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:safewh:280399 |
| By: | Gödl, Maximilian; Gödl-Hanisch, Isabel |
| JEL: | E24 E31 E50 E60 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277641 |
| By: | Jana Valachyova (Council for Budget Responsibility); Matus Senaj (Council for Budget Responsibility) |
| Abstract: | We analyse the impact of an unexpected and steep increase in price level on the purchasing power of Slovak families in 2022 and 2023. This is the first and the only paper that looks at distributional impacts of an inflationary shock in Slovakia. We combine a microsimulation model SIMTASK with the data on expenditure from the Household Budget Survey to quantify the net effect of an inflationary shock together with the cushioning effects of government measures and economic adjustments in the form of inflation-induced wage growth and an additional valorisation of social benefits. We show that in 2022, the government measures were well targeted and succeeded in offsetting a significant part of a purchasing power drop for low-income families. For high-income families, economic adjustments were the crucial component offsetting a significant part of their purchasing power drop. However, the overall net effect on purchasing power was negative (6 % for an average family) and it holds true for each income decile and family type. The story is different in 2023. It turns out that despite the high inflation, the macroeconomic adjustment hand in hand with adopted government measures, including a generous price cap on energy prices, more than compensate for the effects of unexpected inflation (3 % increase for an average family). This holds true for all analysed income categories, except for the lowest income decile. When looking at family types, the best off are families without children, often consisting of pensioners. |
| Keywords: | microsimulation, inflationary shock, distributional effect, tax and transfer policy |
| JEL: | C81 D31 E31 H24 I38 |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:cbe:wpaper:202302 |
| By: | Andreas Baur; Florian Dorn; Lisandra Flach; Clemens Fuest |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:ces:econpr:_44 |
| By: | Afunts, Geghetsik; Cato, Misina; Schmidt, Tobias |
| JEL: | D84 D12 E3 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277577 |
| By: | Laatsit, Mart (CIRCLE, Lund University); Lindholm-Dahlstrand, Åsa (CIRCLE, Lund University); Nilsson, Magnus (CIRCLE, Lund University) |
| Abstract: | A new generation of innovation policies has placed renewed attention on understanding the innovation processes taking place on and affecting the system level. On one hand, there is a growing demand for policy instruments addressing the need for system change. On the other hand, there is still a lack of understanding of how innovation policy instruments contribute to a system-level impact. We address this gap by taking a programme perspective and proposing an analytical framework for assessing three types of effects: first-order, second-order, and system-level. Our approach is inspired by the functions of technological innovation system literature (TIS). We apply the analytical framework to the analysis of an innovative entrepreneurship instrument, the Swedish Innovation Agency VINNOVA’s Innovative SME programme. We find that the public support programmes contributed significantly to SMEs’ ability to influence system functions. Based on the findings, we argue that the analysis of innovation policy programmes should move beyond a narrow assessment of direct effects and consider more the second-order and system-level effects. |
| Keywords: | innovation policy; Sweden; public funding |
| JEL: | O33 O38 |
| Date: | 2023–11–28 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lucirc:2023_012 |
| By: | Ali-Yrkkö, Jyrki; Kuosmanen, Natalia |
| Abstract: | Abstract This report examines the development and composition of Finland’s international trade in services compared to other countries. The findings reveal a substantial growth in Finland’s service exports, though at a slower pace than the EU average. Different countries have specialized in various types of services. Finland stands out for its prominent presence in IT services and software, while Sweden specializes in music services, and Denmark in maritime transport services. Both Finland and Denmark have focused their service exports in specific areas. In the future, diversifying the range of service exports is crucial. |
| Keywords: | Comparison, Exports, Internationalization, Imports, Service |
| JEL: | F14 L8 |
| Date: | 2023–11–30 |
| URL: | https://d.repec.org/n?u=RePEc:rif:report:142 |
| By: | Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Growing signs of bleak prospects by Olga Pindyuk and Doris Hanzl-Weiss FDI performance in CESEE significantly weakened in the first nine months of 2023, with FDI inflows decreasing year on year in most of the countries. EU-CEE experienced the sharpest contraction of FDI inflows among the subregions. Investors appear to have become more pessimistic about the region’s prospects, as indicated by the falling number of greenfield investment projects in all the subregions apart from CIS and Ukraine. In line with global trends, the renewable energy sector is gaining in importance in the FDI structure. Employment in new greenfield FDI in the Western Balkans by Branimir Jovanović Between 2010 and 2021, around 180, 000 jobs were created by new greenfield FDI projects in the Western Balkans, with manufacturing accounting for the bulk of them. About two thirds of the newly created jobs were medium skilled, with the skills intensity of the FDI-related jobs generally lower than overall for new employment in the region. This points to the importance of the careful calibration of incentives and benefits in policies to attract FDI. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025 |
| Keywords: | FDI inflows, greenfield investment, FDI stocks, M&As, employment |
| Date: | 2023–11 |
| URL: | https://d.repec.org/n?u=RePEc:wii:mpaper:mr:2023-11 |
| By: | Alexandra Bykova (The Vienna Institute for International Economic Studies, wiiw); Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Olga Pindyuk (The Vienna Institute for International Economic Studies, wiiw); Nina Vujanović |
| Abstract: | This issue of the wiiw Monthly Report replaces our earlier series of the wiiw FDI Report. FDI in Central, East and Southeast Europe Data availability and preliminary results for 2022 by Alexandra Bykova FDI inflows into CESEE countries, excluding Russia, grew by 10.8% last year. Performance was highly uneven across the countries of the region. Russia’s isolation due to its war in Ukraine led to large-scale disinvestment of EUR 40bn, according to preliminary estimates. Preliminary FDI data for 2022 are available from the wiiw FDI Database as a first FDI data release this year. Data revisions and FDI data by partner and by economic activity will be released later, in autumn. FDI has been holding up, but the outlook is getting cloudier by Olga Pindyuk In contrast to the global trends, FDI inflows in CESEE increased in 2022, apart from in Russia and Ukraine. However, recent trends in greenfield investment and mergers and acquisitions signal a worsening of investment prospects. Southeast Europe is emerging as the most dynamic sub-region in terms of FDI attraction. Spurred by digitalisation and green transition developments, investors in the region have become increasingly interested in the renewable energy and electronic components sectors. What lies behind the strong FDI inflows in the Western Balkans? by Branimir Jovanović The six Western Balkan economies stood out as top performers in terms of FDI inflows within the Central, East and Southeast Europe region in 2022. However, a closer examination reveals a more nuanced picture regarding the composition and characteristics of investments, prompting questions about the overall advantages and long-term sustainability of the inflows. Although the region is projected to continue to attract substantial FDI in the near future, it is likely that the pace will decelerate from the remarkable performance witnessed in 2022. Deriving the underlying FDI trend in CESEE by Nina Vujanović FDI has been pivotal for the growth of CESEE economies. However, the patterns of FDI flows have been highly volatile. To allow policy makers to draw sound conclusions, we derive the underlying FDI trend for the CESEE region. The results show that, although the trend has consistently been upward since 1997, shocks caused by the global financial crisis, COVID-19 and the war in Ukraine have had a strong impact. Forecasts of main economic indicators for Central, East and Southeast Europe for 2023-2025 |
| Keywords: | FDI inflows; FDI outflows; FDI stocks; FDI by instrument of financing; greenfield investment; M&As; FDI by components; FDI by partner; FDI by sector; underlying FDI trend; intra-company loans |
| Date: | 2023–05 |
| URL: | https://d.repec.org/n?u=RePEc:wii:mpaper:mr:2023-05 |
| By: | Maihold, Günther; Zilla, Claudia |
| Abstract: | The summit in Brussels on 17-18 July will mark the end of a long eight-year hiatus in bi‑regional meetings between the European Union (EU) and the Community of Latin American and Caribbean States (CELAC). Between 1999 and 2015, conferences were held every two or three years. Since the last conference, the international environment and regional contexts on both sides of the Atlantic have changed significantly. Brazil's return to CELAC and the new Lula government's efforts to reactivate the Union of South American Nations (UNASUR) have given the region a new impetus, which was reflected at the respective summits of the two organisations in Buenos Aires in January and Brasília in May. In June, the European Commission presented a new agenda for the EU's relations with Latin America and the Caribbean (LAC) that clearly shows Europe wants to intensify bi-regional cooperation. This has a chance of succeeding if summit diplomacy is approached in a spirit of renewal - not revival - and combined with substantive thematic cooperation and vibrant bilateral relations. |
| Keywords: | European Union (EU), Community of Latin American and Caribbean States (CELAC), Union of South American Nations (UNASUR), Latin America and the Caribbean (LAC) |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:swpcom:279923 |
| By: | Dertwinkel-Kalt, Markus; Wey, Christian |
| JEL: | D04 L12 Q48 K33 |
| Date: | 2023 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:vfsc23:277575 |
| By: | Lucien Rigaux |
| Date: | 2023–05–16 |
| URL: | https://d.repec.org/n?u=RePEc:ulb:ulbeco:2013/364919 |
| By: | OECD |
| Abstract: | Nature-based solutions (NbS) aim to maintain, enhance and restore ecosystems to address a variety of social, economic and environmental challenges, including climate change and biodiversity loss. This paper applies the OECD’s framework to provide recommendations for how to encourage the use of NbS by Hungarian municipalities. It illustrates some of the key challenges in the local implementation of NbS in Hungary and provides international examples of how they are tackled in diverse contexts. It also discusses the role of reforms about the enabling environment to mobilise further public and private investment in climate adaptation. |
| Date: | 2023–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:oec:envaac:39-en |
| By: | Frédéric Ahado; Vladimir Azzopardi; Mylène Carreira; Laure Chantrelle; Michele D’Ambrosio; David Ly; Stéphane Jarrijon |
| Abstract: | Cet Analyses et Synthèses présente la situation des assureurs soumis à solvabilité II en France au premier semestre 2023, marqué par un repli de la collecte nette en assurance-vie (3, 4 milliards d’euros) en raison d’une augmentation des rachats. L’activité d’assurance non vie continue sa progression au premier semestre 2023 avec une hausse des primes et des sinistres de même ampleur (+6, 4%). Le ratio combiné de l’activité non vie s’est globalement amélioré au premier semestre 2023 en France, alors qu’il s’est dégradé dans les autres principaux pays européens.Les placements des organismes d'assurance français s’élèvent à 2 534 milliards d'euros en valeur de marché fin juin 2023, en hausse de 2, 6 % par rapport au semestre précédent. L’allocation observée sur les actifs des assureurs à fin juin 2023 diffère peu de celle de fin décembre 2022. Le taux de couverture du Capital de Solvabilité Requis (CSR) augmente au premier semestre 2023 pour atteindre 255% fin juin 2023 (contre 247% fin 2022). |
| URL: | https://d.repec.org/n?u=RePEc:bfr:analys:153 |