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on Microeconomic European Issues |
| By: | Guirola, Luis (Banco de España); Hospido, Laura (Bank of Spain); Weber, Andrea (Central European University) |
| Abstract: | Using data on 17 countries in Europe and North America, we compare the career trajectories of mothers and fathers and of women and men without children across cohorts, and at different points of their life cycle. There is wide variation across countries in employment and earnings gaps at age 30. At age 50, however, employment between mothers and non-mothers have closed in most countries. We also observe convergence in employment gaps between mothers and fathers by age 50, but these gaps do not fully close. Motherhood gaps in earnings also close by age 50 between mothers and non-mothers, particularly among the highly educated. But there is strong persistence in earnings gaps between mothers and fathers even among highly educated parents. The main reasons for the remaining gaps at later stages in the life-cycle are part-time work among women and fatherhood premia as fathers' earnings outperform non-fathers' over their life-cycle. |
| Keywords: | gender gaps, employment, earnings, children |
| JEL: | J12 J13 J16 J21 J22 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17018&r= |
| By: | Meryem Gökten (The Vienna Institute for International Economic Studies, wiiw); Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Jan Muś; Stella Sophie Zilian (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Chart of the Month Austria in pole position to benefit from artificial intelligence by Stella Zilian Opinion Corner ‘Multi-speed Europe’ The Franco-German road to disaster by Jan Muś The ‘multi-speed Europe’ expert proposal commissioned by France and Germany has outlined the institutional and procedural reforms that the EU would need to implement, in order to prepare for future enlargement. While individual elements of the proposal make perfect sense, collectively they could potentially be disastrous, given the current international climate. By excessively strengthening the leverage of ‘core’ member states – such as France and Germany – over the rest of the EU, their implementation could result in a deepening of the EU’s internal divide between the poor and the rich. How far from full employment? The European unemployment problem revisited by Meryem Gökten Using the Beveridge curve concept, we find that European countries last experienced full employment in the 1970s, with the subsequent decades marked by elevated unemployment. After the COVID-19 crisis, only a few EU member states (such as the Netherlands and Czechia) and the US have achieved full employment; most EU member states still have considerable labour-market slack. Among other things, our analysis highlights the contribution made by hysteresis effects, trade union density and right-wing government policies to greater labour-market slack, and suggests there is no trade-off between inflation and unemployment – whatever the classical Phillips curve suggests. The EU minimum wage directive A chance for decent earnings in EU-CEE by Sebastian Leitner Collective bargaining in EU-CEE has been under pressure over the past two decades, with coverage rates much lower nowadays than in Western and Northern European countries. Moreover, in-work poverty and wage dispersion have been on the rise. The EU Minimum Wage Directive, adopted in late 2022, is an important step forward in addressing these problems, by promoting collective bargaining and increasing statutory minimum wages. However, its success will ultimately depend on the willingness of national governments to accept unions and employer organisations as equal partners and to respect their autonomy in wage setting. Monthly and quarterly statistics for Central, East and Southeast Europe |
| Keywords: | artificial intelligence, digital devices, complex cognitive tasks, EU institutions, majority voting, EU enlargement, full employment gap, Beveridge curve, Phillips curve, minimum wage, collective bargaining, in-work poverty |
| Date: | 2023–12 |
| URL: | https://d.repec.org/n?u=RePEc:wii:mpaper:mr:2023-12&r= |
| By: | L. Dary Beltran; Manuel Alejandro Cardenete; Ferran Sancho |
| Abstract: | In response to increased awareness of climate change, environmental sustainability has become a policy objective in Europe. Despite a decrease in greenhouse gas emissions, the European Commission deems current progress insufficient. Discussions on implementing environmental policies persist, with environmental taxation emerging as one of the most controversial yet potentially effective economic instruments for reducing emissions. However, the extent of its impact on the economy remains under debate, as improvements in welfare and environmental quality hinge on various economic, political, and public preference factors. Therefore, we analyse the economic impact of introducing an environmental tax to achieve emission reduction targets in Spain, while also testing two systems for recycling tax revenues. This allows us to assess the potential for a second dividend. We select Spain as the unit of analysis due to its minimal utilisation of environmental taxes, as it ranks among the European countries that are least active in combating climate change using taxation. |
| Keywords: | Environmental taxation; Emissions mitigation; Tax recycling. |
| JEL: | D57 E16 H21 H23 |
| Date: | 2024–06–19 |
| URL: | https://d.repec.org/n?u=RePEc:aub:autbar:975.24&r= |
| By: | Koch, Michael (Aarhus University); Lodefalk, Magnus (Örebro University School of Business) |
| Abstract: | We use individual survey data providing detailed information on stress, technology adoption, and work, worker, and employer characteristics, in combination with recent measures of AI and robot exposure, to investigate how new technologies affect worker stress. We find a persistent negative relationship, suggesting that AI and robots could reduce the stress level of workers. We furthermore provide evidence on potential mechanisms to explain our findings. Overall, the results provide suggestive evidence of modern technologies changing the way we perform our work in a way that reduces stress and work pressure. |
| Keywords: | Artificial intelligence technologies; Automation; Task content; Skills; Stress |
| JEL: | I31 J24 J28 J44 N34 O33 |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2024_005&r= |
| By: | Biro, Aniko (Centre for Economic and Regional Studies); Boza, István (Central European University, Budapest); Gyetvai, Attila (Banco de Portugal); Prinz, Daniel (World Bank) |
| Abstract: | We study the role that firms play in social insurance benefit uptake after their workers experience health shocks. Social insurance in our setting, Hungary, is universal and comprehensive, thus allowing us to quantify the heterogeneous impact of firms on benefit uptake and labor market outcomes on top of the social safety net. Using matched employer-employee administrative data linked to individual-level health records, we find that firm responses to worker health shocks are heterogeneous. Workers hit by a health shock at high-quality firms are less likely to take up disability insurance or exit the labor force than those at low-quality firms. These empirical patterns are consistent with worker-firm match quality increasing in firm quality in a setting where recovery from health shocks is uncertain. Our results imply that beyond higher wages, high-quality firms also offer more protection against the consequences of health shocks. This suggests that heterogeneous firm behavior should be taken into account when designing social insurance policies. |
| Keywords: | health shock, disability insurance, firm heterogeneity |
| JEL: | H55 I10 J22 J23 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17069&r= |
| By: | Nonnis, Alberto; Roth, Felix; Bounfour, Ahmed |
| Abstract: | This paper presents a puzzling finding: although France invests twice as much in intangible capital vis-à-vis Germany, both countries have similar LPG rates over the studied period from 1995 until 2020. We find that this difference in investments is driven by France's four- and two-and-a-half-fold investments in software and organizational capital. Our paper offers three perspectives to clarify the puzzle. First, higher investments in intangible capital in France might suggest a better readiness of the country towards the next generation of investment. However, France's investments in intangibles appear to be less efficient compared to those of Germany. Third, measurement problems in the software and organizational capital investment series are also to be considered to understand this major puzzle. |
| Keywords: | Intangible capital, Labour Productivity, Germany, France, EU |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:uhhhdp:16&r= |
| By: | Rampazzo, Pietro |
| Abstract: | There is a gap in the study of mobility. The work done so far is not taking into account the changes the shared-mobility is bringing into our society. This research project aims to leverage shared-mobility data for a better understanding of new patterns in the human-mobility. These new services allow people to use a shared vehicle based on their needs, without the necessity to own one. Shared mobility is going towards users' needs and letting them reach their destination as close as possible. Sharing mobility is improving the data collected and at the same time reshaping the commuting patterns. Understanding travel behaviour is key to creating more resilient, sustainable urban transport networks and reducing carbon emissions. In this research, I start analysing data from Movi which focus on Padova. Movi (ex Mobike) is a free-floating bike sharing system active in Italy and Spain. The data collected by the this service is very detailed and rich. The data sets contain high-level detailed information that is related to service usage. For every trip made it is known: (1) anonymized user id and rental plan, (2) vehicle id, (3) origin (latitude, longitude), (4) destination (latitude, longitude), (5) start date and time (timestamp), (6) end date and time (timestamp), and (7) rounded meters/kilometres travelled. All the information is anonymized. The two research questions this paper is going to address are: (a) What is the profile of the active users? This information can be studied based on the usage data and socio-demographic information the service is collecting. (b) What are the effects of the weather and temperature on the usage of this service? Weather data were retrieved from the local authorities regarding temperature and precipitations. |
| Date: | 2024–06–14 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:bd8p4&r= |
| By: | Miquel Oliu-Barton; Juan Mejino Lopez |
| Abstract: | Despite major progress, the cost of air pollution is still huge for the European Union |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_10096&r= |
| By: | Busemeyer, Marius R.; Giger, Nathalie; Wehl, Nadja |
| Abstract: | In this paper, we focus on individuals' perceptions of their own position within the income distribution and argue that ideological biases influence these perceptions. In particular, we take into account the two-dimensional ideological space of European party systems and develop arguments about social class mis-identification (economic dimension) and cultural threat and privilege (cultural dimension) leading to either over- or underestimation. We use novel survey data from the Konstanz Inequality Barometer (2020 and 2022) and find that socially conservative individuals are more likely to underestimate their relative income position, i.e. they perceive themselves to be worse off than they are. By contrast, individuals with a rightist position on the economic ideology are more likely to overestimate their relative position. These biases have downstream consequences for electoral behavior as well. Our findings have important consequences for our understanding of individuals' perceptions of inequality but also, more broadly, for the politics of redistribution. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cexwps:297972&r= |
| By: | Fossen, Frank M. (University of Nevada, Reno); McLemore, Trevor (University of Nevada, Reno); Sorgner, Alina (John Cabot University) |
| Abstract: | This survey reviews emerging but fast-growing literature on impacts of artificial intelligence (AI) on entrepreneurship, providing a resource for researchers in entrepreneurship and neighboring disciplines. We begin with a review of definitions of AI and show that ambiguity and broadness of definitions adopted in empirical studies may result in obscured evidence on impacts of AI on en-trepreneurship. Against this background, we present and discuss existing theory and evidence on how AI technologies affect entrepreneurial opportunities and decision-making under uncertainty, the adoption of AI technologies by startups, entry barriers, and the performance of entrepreneurial businesses. We add an original empirical analysis of survey data from the German Socio-economic Panel revealing that entrepreneurs, particularly those with employees, are aware of and use AI technologies significantly more frequently than paid employees. Next, we discuss how AI may affect entrepreneurship indirectly through impacting local and sectoral labor markets. The reviewed evidence suggests that AI technologies that are designed to automate jobs are likely to result in a higher level of necessity entrepreneurship in a region, whereas AI technologies that transform jobs without necessarily displacing human workers increase the level of opportunity entrepreneurship. More generally, AI impacts regional entrepreneurship ecosystems (EE) in multiple ways by altering the importance of existing EE elements and processes, creating new ones, and potentially reducing the role of geography for entrepreneurship. Lastly, we address the question of how regulation of AI may affect the entrepreneurship landscape by focusing on the case of the European Union that has pioneered data protection and AI legislation. We conclude our survey by discussing implications for entrepreneurship research and policy. |
| Keywords: | artificial intelligence, machine learning, entrepreneurship, AI startups, digital entrepreneurship, opportunity, innovation, entrepreneurship ecosystem, digital entrepreneurship ecosystem, AI regulation |
| JEL: | J24 L26 O30 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17055&r= |
| By: | Eder, Andreas; Koller, Wolfgang; Mahlberg, Bernhard |
| Abstract: | This paper investigates the contribution of industrial robots to employment change in manufacturing in a sample of 17 European countries and the USA over the period 2004 to 2019. We combine index decomposition analysis (IDA) and production-theoretical decomposition analysis (PDA). First, we use IDA to decompose employment change in the manufacturing industry into changes in (aggregate) manufacturing output, changes in the sectoral structure of the manufacturing industry, and changes in labour intensity which is a composite index of labour intensity change within each of the nine sub-sectors of total manufacturing. Second, we use PDA to further decompose labour intensity change to isolate the contribution of technical efficiency change, technological change, human capital change, change in non-robot capital intensity and change in robot capital intensity to employment change. In almost all of the countries considered, the labour intensity is falling in entire manufacturing, which has a dampening effect on employment. Robotisation contributes to this development by reducing labour intensities and employment in all countries and sub-sectors, though to varying degrees. Manufacturing output, in turn, grows in all countries (except Greece, Spain and Italy), which increases employment and counteracts or in some countries even more than offsets the dampening effect of declining labour intensities. The structural change within manufacturing has an almost neutral effect in many countries. |
| Keywords: | automation; robotisation; decomposition; structural change; data envelopment analysis |
| JEL: | C43 J21 J24 O33 |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121128&r= |
| By: | Sébastien Bock (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Aya Elewa (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Sarah Guillou (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Mauro Napoletano (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Lionel Nesta (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Over the past 20 years, the gap in per capita income between the United States and the eurozone, which stood at around €10, 000 in 2000, has not narrowed. It has widened since 2012. GDP per capita in the eurozone fell from 77% to 72% of US GDP per capita the 2000 and 2019, thus diverging from the level of wealth on the other side of the Atlantic.This gradual decoupling of GDP per capita started before the pandemic. This Policy Brief therefore looks at this European lagging – the widening gap – over the twenty years before the pandemic and the energy crisis, from 2000 to 2019, and explores possible explanations for this decoupling. Our results show that divergence between the eurozone and the United States is mainly due to lower hour productivity growth in the former. It also appears that capital, much more than differences in working hours, is a major factor in the divergence between the two zones. Productive efficiency diverges because of lower capital intensity in information and communication technology (ICT) equipment on the one hand, and in intangible assets on the other. The amount of ICT capital per job was five times higher in the United States in 2019; the amount of intangible capital per job was three times higher. These yawning gaps in 2019 were not as much as wide in 2000. Of course, there are also big differences between the Member States of the eurozone, so we must be careful not to draw premature conclusions about the European aggregate and the inadequacy of Europe's policies. Indeed, Germany comes close to the US level (82% in 2019); France stands out for its sustained intangible investment, but without distinguishing itself in terms of GDP growth; and Italy lags behind, with very low level of productivity gains and intangible investment, while Spain is in a process of catching up. Despite these intra-European differences, the capital factor seems to be the driving force behind the gap and divergence for all the countries observed. And by its very nature, the deficit in capital accumulation will also be the cause of divergence after 2019. If policy recommendations are to be defined, they must aim at increasing the investment in ICT and intangible assets to catch up with the level of capital available per job in the United States. |
| Date: | 2024–05–30 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04593877&r= |
| By: | Ádám Kerényi (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies); Csaba Lakócai (Institute of World Economics, HUN-REN Centre for Economic and Regional Studies) |
| Abstract: | Following the collapse of the Soviet-style planned economies, the post-socialist region of Central and Eastern Europe has undergone a process of economic convergence after the initial shock of transition to a market economy. One stage in this process was accession to the European Union. Most of the countries in the region became members, making them eligible for further benefits and financial allocations. The extent to which these funds have been used effectively over the past decades varies from country to country, but overall, the convergence of these countries within the EU has continued. In this study, we examine the distribution of the net EU transfers to the post-socialist member states and their impact on macroeconomic and social indicators between 2004 and 2022. While these effects are clearly visible in terms of the formal economic and consumption indicators, they are less directly visible in terms of the informal wellbeing trends. |
| Keywords: | European Union, post-socialist countries, Central and Eastern Europe, financial transfers, convergence |
| JEL: | I31 O47 O52 P20 P27 Y10 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iwe:workpr:274&r= |
| By: | Sebastian Dullien (Macroeconomic Policy Institute (IMK)); Silke Tober (Macroeconomic Policy Institute (IMK)) |
| Abstract: | Die deutsche Inflationsrate lag im Mai 2024 mit 2, 4 % etwas hoeher als in den beiden Monaten zuvor (2, 2 %). Entscheidend war die staerkere Erhoehung der Dienstleistungspreise infolge einer Kombination aus Basiseffekten – insbesondere durch die Einfuehrung des 49-Euro-Tickets im Mai 2023 – und einem kraeftigen Anstieg gegenueber dem Vormonat (0, 5 %). Nahrungsmittel- und Energiepreise daempften den Preisauftrieb, wenn auch etwas weniger als im April 2024. Die Kernrate stieg nur geringfuegig auf 2, 9 %, weil sich der Preisanstieg bei Waren ohne Energie und Nahrungsmittel im weitesten Sinne abschwaechte und dadurch den beschleunigten Anstieg der Dienstleistungspreise weitgehend kompensierte. In dem fuer die EZB wichtigen harmonisierten Verbraucherpreisindex (HVPI) kam es aufgrund anderer Gewichte nicht zu einer derart starken Kompensation. Stattdessen schnellte die HVPI-Kernrate von 2, 9 % im April 2024 auf 3, 5 % im Mai 2024 empor. In der Folge stieg auch die HVPI-Rate staerker auf 2, 8 %, nach 2, 4 % im April. Bei einem Gewicht Deutschlands von 27, 1 % geht der Anstieg der Kernrate im Euroraum um 0, 2 Prozentpunkte auf 2, 9 % im Mai 2024 massgeblich auf den Anstieg in Deutschland zurueck. Die Inflationsraten fuer unterschiedliche Haushaltstypen in verschiedenen Ein¬kom-mensklassen bewegten sich im Mai 2024 innerhalb einer Spanne von 1, 6 % und 2, 5 %. Dabei lag die Inflationsrate fuer Alleinlebende mit hohem Einkommen am oberen Ende, da bei diesen Haushalten die noch ueberdurchschnittlich anziehenden Preise fuer Versicherungs-dienstleistungen, Dienstleistungen sozialer Einrichtungen, Restaurantbesuche und Uebernachtungen sowie Dienstleistungen im Bereich Gesundheit und Wohnungs¬instand-haltung stark ins Gewicht fallen. Die EZB hat auf ihrer Sitzung im Juni 2024 die Zinswende eingeleitet. Dass sie die Leitzinsen gesenkt hat, obwohl die Inflationsrate hoeher ausfiel als zuvor, spricht dafuer, dass die Zinssenkung ueberfaellig war. Auch wenn die EZB ihre Inflationsprognose fuer 2025 auf 2, 2 % angehoben hat, duerfte sie den entscheidenden Leitzins bis Ende 2024 um weitere 75 Basispunkte auf 3 % senken. Dennoch waeren die Zinsen weiterhin im restriktiven Bereich und wuerden die Wirtschaft Deutschlands und des Euroraums weiterhin bremsen. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:imk:pbrief:170-2024&r= |
| By: | Goldbach, Stefan; Harms, Philipp; Jochem, Axel; Nitsch, Volker; Weichenrieder, Alfons J. |
| Abstract: | In some countries, a sizable fraction of savings is derived from corporate savings. Although larger, traded corporations are often co-owned by foreign portfolio investors, current international accounting standards allocate all corporate savings to the host country. This paper suggests a framework to correct for this misleading attribution and applies this concept to Germany. For the years 2012 to 2020, our corrections retrospectively reduce German savings and consequently the German current account surplus by, on average, €11.5bn annually. This amounts to lowering Germany's average official current account surplus (€226.6bn) across these years by approximately five percent. |
| Keywords: | current account, balance of payments, corporate savings, retained earnings, foreign portfolio investment, Germany |
| JEL: | F32 E21 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:darddp:298856&r= |
| By: | Mateo Cordier (CEARC - Cultures, Environnements, Arctique, Représentations, Climat - UVSQ - Université de Versailles Saint-Quentin-en-Yvelines - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | Pour parvenir à zéro polluants plastiques dans l'écosystème mondial d'ici 2040, cela nécessiterait un investissement mondial estimé entre 12 000 et 18 000 milliards de dollars pour des mesures mises en œuvre entre 2020 et 2040. Les dommages causés par l'inaction pourraient coûter jusqu'à 13 fois plus cher que l'action. En outre, le traité sur le plastique doit fixer des objectifs absolus de réduction plutôt que relatifs, comme le démontre l'étude de Winterstetter et al. (2023) sur les déchets d'emballages plastiques en Europe. Bien que le pourcentage de ces déchets mal gérés ait diminué entre 2012 et 2018, leur quantité absolue a augmenté en raison de la croissance globale de la production de déchets. Enfin, l'économie circulaire, basée sur les 4Rs (Réduire, Réutiliser, Réparer, Recycler), doit être repensée car elle se concentre principalement sur le recyclage. Cela ne suffira pas à résoudre le problème étant donné la croissance continue de l'économie depuis 1750, ce qui entraîne une augmentation des déchets plastiques mal gérés en raison de la croissance du PIB ainsi que de la consommation de ressources et de l'effet rebond. Pour être efficace sur le plan écologique, le traité sur le plastique doit donner la priorité aux trois premiers R dans l'ordre susmentionné, afin d'éviter une dégradation supplémentaire des écosystèmes. |
| Keywords: | Plastiques, Economie, Effet rebond, Economie circulaire, Coût |
| Date: | 2023–05–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04567085&r= |
| By: | Sara Ain Tommar (NEOMA - Neoma Business School); Serge Darolles (DRM - Dauphine Recherches en Management - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique); Emmanuel Jurczenko (EDHEC BS - EDHEC Business School [Nice]) |
| Abstract: | We construct a novel and comprehensive dataset to formally explore the returns of private equity funds in non-North American focused markets. We investigate a range of stylized facts on private equity performance and persistence, and compare the findings to the extensive evidence on North American funds. We find that European private equity funds have performed at least similarly to their North American peers throughout the sample period. European funds' performance declines over time even though funds continued to deliver above par with a range of public market indices. Funds focused on Asia Pacific, or Latin America, Middle East and North Africa, and other parts of the world have outperformed in only a few of the sample vintages, both relative to the broad US public market and other regional equity markets. Inconsistent with the "money chasing deals" hypothesis, fund performance does not seem to be driven by the capital infusions into the industry, but by a rather maturing market for profitable deals. Non-North American funds show evidence of return persistence in Europe only, as does a sample of US-backed funds that are diversified globally. Persistence is random outside the European and Global groups, and declines over time, with some variation across regions and investment styles. |
| Keywords: | private equity funds, international markets, performance, return persistence |
| Date: | 2023–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04581106&r= |
| By: | Krebs, Tom (University of Mannheim); Weber, Isabella (University of Massachusetts Amherst) |
| Abstract: | In the wake of the global energy crisis, many European countries used energy price controls to fight inflation and to stabilize the economy. Despite its wide adoption, many economists remained skeptical. In this paper, we argue that price controls should be part of the policy toolbox to respond to shocks to systemically important sectors because not using them can have large economic and political costs. We put forward our arguments in two steps. In a first step, we analyze the impact on the German economy and society of the global energy crisis that followed Russia's attack on Ukraine in February 2022. Our analysis shows that energy shocks matter. Specifically, the one-year GDP loss of the energy crisis 2022 amounts to 4 percent and is comparable to the short-run output losses during the COVID-19 crisis 2020 and the global financial crisis 2008. In addition, during the energy crisis 2022 inflation rates rose dramatically and real wages dropped more than in any other year in post-war Germany. There are also clear signs that the crisis is causing severe long-term economic damage (hysteresis effects). At the beginning of 2024, GDP is 7 percent and real wages are 10 percent below the pre-COVID-19 trend. We argue that the German government handled the immediate response to the energy shock well, but subsequently waited too long to introduce an energy price brake in 2022. This failure to act decisively in response to heightened economic insecurity coincided with a strong rise of the approval rates of the far-right AfD in the summer of 2022. We also show that the German energy price brake was an effective price stabilization policy for households, but did not protect the industrial base appropriately making it more likely that the German economy will continue to stagnate. In a final step, we turn to the use of price controls as an optimal policy response to an energy shock within a general equilibrium framework. We develop a simple production model with an energy sector and shows that price controls are socially optimal whenever self-fulfilling expectations generate endogenous price uncertainty in the wake of an energy shock. We also link our analysis to the so-called sunspot literature that was developed in the 1980s as a response to the rational-expectations revolution in macroeconomics. Finally, we use our theoretical analysis to shed some light on the economic policy debate and the resistance of German mainstream economists to the introduction of energy price controls in 2022. |
| Keywords: | global energy crisis, German economy, endogenous uncertainty, price controls, inflation, stabilization policy |
| JEL: | D52 D84 E12 E32 E64 Q43 Q48 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17043&r= |
| By: | Gilles Le Garrec (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Vincent Touzé (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | Cet article dresse un bilan de la capacité que les principaux pays européens ont eue à faire face au vieillissement accéléré de leur population active depuis 2008. L'analyse se concentre précisément sur dix pays : l'Allemagne, l'Autriche, la Belgique, le Danemark, l'Espagne, la Finlande, la France, l'Italie, les Pays-Bas et la Suède. Les réformes des systèmes de retraite depuis les années 1990 ont entraîné un recul progressif de l'âge moyen de la retraite, ce qui a augmenté le taux d'activité des seniors. S'est alors posée la question de leur maintien dans l'emploi, en considérant les spécificités liées à leur âge, telles que l'expérience acquise, l'obsolescence du capital humain ou encore un état de santé potentiellement dégradé et comment elles peuvent influencer leur intégration professionnelle (productivité, salaire et contrat de travail). Les stratégies européennes et nationales ont visé à adapter les marchés du travail afin de répondre aux caractéristiques des seniors. Elles se sont notamment appuyées sur les axes suivants : formation professionnelle tout au long de la vie, lutte contre la discrimination basée sur l'âge, adaptation des postes, management des âges, flexibilité du temps de travail. Malgré des performances différenciées, une convergence des taux d'emploi des seniors s'est observée, les pays ayant eu un retard important en 2008 connaissant les plus fortes hausses par la suite. Deux groupes se distinguent néanmoins : ceux historiquement en avance et qui ont maintenu une certaine dynamique (Allemagne, Pays-Bas, Suède, Danemark et Finlande) et ceux en retard qui s'inscrivent aussi dans un schéma de convergence mais qui sont à la traîne sur l'emploi des 60-64 ans (France, Espagne, Italie, Belgique et Autriche). |
| Keywords: | Europe, marché du travail, vieillissement, senior, taux d'emploi |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04594571&r= |
| By: | Güntner, Jochen; Reif, Magnus; Wolters, Maik H. |
| Abstract: | We use a structural VAR model to study the German natural gas market and investigate the impact of the 2022 Russian supply stop on the German economy. Combining conventional and narrative sign restrictions, we find that gas supply and demand shocks have large and persistent price effects, while output effects tend to be moderate. The 2022 natural gas price spike was driven by adverse supply shocks and positive storage demand shocks, as Germany filled its inventories before the winter. Counterfactual simulations of an embargo on natural gas imports from Russia indicate similar positive price and negative output effects compared to what we observe in the data. |
| Keywords: | Energy crisis, German natural gas market, narrative sign restrictions, natural gas price, structural scenario analysis, vector-autoregression |
| JEL: | E32 F51 Q41 Q43 Q48 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:imfswp:299246&r= |
| By: | Elliot Aurissergues (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Christophe Blot (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Edgar Carpentier-Charléty; Magali Dauvin (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); François Geerolf (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Eric Heyer (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po); Mathieu Plane (OFCE - Observatoire français des conjonctures économiques (Sciences Po) - Sciences Po - Sciences Po) |
| Abstract: | La zone euro a traversé plusieurs crises qui ont parfois menacé sa pérennité mais qui ont aussi entraîné des réformes de sa gouvernance budgétaire et des changements dans la conduite de la politique monétaire. À la veille des élections européennes et 25 ans après sa création, la question se pose de la performance économique de la zone euro par rapport à celle de l'économie américaine. Alors que les trajectoires de PIB par habitant ont été relativement similaires entre 1999 et 2008, elles divergent notablement depuis. Nous étudions les causes possibles de ce décrochage en distinguant les facteurs d'offre et de demande. Côté offre, la zone euro s'est caractérisée sur l'ensemble de la période par une croissance de la productivité nettement plus faible qu'aux États-Unis. À l'inverse, alors qu'il a stagné aux États-Unis, le taux d'emploi de la population en âge de travailler s'est nettement amélioré dans les pays européens même si des disparités au sein du continent demeurent. Plus récemment, la divergence est également liée à l'impact de la crise énergétique et à la hausse plus forte des prix de l'énergie en Europe en lien avec la baisse de l'offre de gaz naturel russe après le déclenchement de la guerre en Ukraine. Du côté de la demande, force est de constater qu'il y a un déficit de demande agrégée bien réel en zone euro, avec une épargne qui dépasse nettement l'investissement depuis 2010, alimentant les déséquilibres commerciaux dans le monde. Cette épargne excédentaire s'explique entre autres par une politique budgétaire plus restrictive en Europe qu'aux États-Unis. Cette sous performance agrégée de la zone euro s'accompagne de trajectoires très hétérogènes au sein de la même zone. Sur l'ensemble de la période, les pays du « Nord » ont crû plus vite que la France et que les pays du « Sud ». La période récente a cependant permis à certains pays, notamment l'Italie, de combler une partie de l'écart. L'enjeu des prochaines années sera celui de la consolidation budgétaire et de ses effets sur l'activité. Il est impératif de ne pas reproduire l'erreur de 2011-2014. Une politique de consolidation budgétaire peut-être adaptée en période de reprise de l'activité mais elle est pernicieuse voire inefficace lorsque l'économie est en sous-régime ; si celle-ci doit être menée en période de basse conjoncture, elle sera moins néfaste sur l'activité en étant graduelle, lissée et non synchronisée au sein de la zone euro. Par ailleurs, la priorité de ce côté de l'Atlantique ne peut pas être uniquement le rétablissement des finances publiques, au risque de voir le fossé économique avec les États-Unis continuer à se creuser : avec les nouveaux défis mondiaux et géostratégiques, l'Europe doit financer sa sécurité, la transition écologique et les nouvelles industries vertes. Utilisant son excédent structurel d'épargne, un plan de relance européen ambitieux, ciblé à la fois sur l'offre et sur la demande, permettrait de relever ces défis tout en mettant les économies sous tension, stimulant ainsi la croissance et la productivité. Une croissance potentielle accrue plus élevée est cruciale pour la soutenabilité des dettes publiques à long terme. |
| Keywords: | union monétaire, crises, zone euro, croissance |
| Date: | 2024–06–04 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04602256&r= |
| By: | Vincent Pradier (GREGOR - Groupe de Recherche en Gestion des Organisations - UP1 - Université Paris 1 Panthéon-Sorbonne - IAE Paris - Sorbonne Business School, OCCAH - Observatoire canadien sur les crises et l'action humanitaire) |
| Keywords: | ONG, Aide au développement, Financement des associations, Localisation de l'aide, Solidarité internationale |
| Date: | 2024–06–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04605459&r= |
| By: | Alessandra Cepparulo; Paolo Pasimeni |
| Abstract: | After more than 60 years of peace, Europe faced a watershed moment in its security, in February 2022. Following a brief overview of how years of underinvestment and fragmentation have left many weaknesses in EU defence, this study analyses the evolution of the EU defence strategy, the contribution by the EU budget and by national budgets. Finally, the paper investigates to what extent the recent increase of defence spending can have a positive effect on growth, by examining the link between defence spending and economic growth, on the basis of the existing literature. |
| JEL: | H56 H77 O40 |
| Date: | 2024–04 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:199&r= |
| By: | Massimo Motta; Volker Nocke; Martin Peitz |
| Abstract: | With the increased risks of international trade frictions and geopolitical disruptions merger control that does not account for such risks may be too lenient. This article provides a proposal on how competition authorities should systematically assess mergers based on a risk assessment and how they should adjust their market share and UPP analysis. The authors also argue that the approach fits well into recent developments of merger analyses in the European Union. |
| Keywords: | merger control, market shares, UPP, resilience, geopolitical risks |
| JEL: | K21 L40 L13 |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:bon:boncrc:crctr224_2024_568&r= |
| By: | Milan Výškrabka; Erza Aruqaj |
| Abstract: | After a decade-long period of surpluses, soaring energy prices sent the euro area current account into a deficit in 2022. This occurred against the backdrop of a lingering COVID-19 impact, and in parallel with gradual recovery of the tourism sector. After its strong fall, the euro area current account balance has been on an improving path this year, as energy prices have fallen from their 2022 highs, and assisted somewhat by a small but visible reduction in the volume of net energy imports. However, energy prices are expected to remain above their pre-pandemic levels exerting a continuous downward pressure on energy balances in the medium term. The asymmetric nature of these shocks caused current account balances to widen across the globe over the past three years, undoing the narrowing that had previously been underway. The fading of these shocks will affect the normalisation of current accounts worldwide and in the euro area and may result in a changed landscape going forward. This paper reviews recent developments in the euro area external position, discusses the main drivers and provides some insights into the likely determinants of the external position in the near term. |
| JEL: | F45 F62 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:euf:dispap:202&r= |
| By: | Baumann, Ursel; Ferrando, Annalisa; Georgarakos, Dimitris; Gorodnichenko, Yuriy; Reinelt, Timo |
| Abstract: | This paper provides new survey evidence on firms’ inflation expectations in the euro area. Building on the ECB’s Survey on the Access to Finance of Enterprises (SAFE), we introduce consistent measurement of inflation expectations across countries and shed new light on the properties and causal effects of these expectations. We find considerable heterogeneity in firms’ inflation expectations and show that firms disagree about future inflation more than professional forecasters but less than households. We document that differences in firms’ demographics, firms’ choices and constraints, and cross-country macroeconomic environments account for most of the variation in inflation expectations by roughly equal shares. Using an RCT approach, we show that firms update their inflation expectations in a Bayesian manner. Moreover, they revise their plans regarding prices, wages, costs and employment in response to information treatments about current or future inflation. JEL Classification: E20, E31, E52 |
| Keywords: | firm decisions, inflation expectations, price setting, randomised controlled trial, surveys |
| Date: | 2024–06 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242949&r= |
| By: | Baumann, Ursel (European Central Bank); Ferrando, Annalisa (European Central Bank); Georgarakos, Dimitris (European Central Bank); Gorodnichenko, Yuriy (University of California, Berkeley); Reinelt, Timo (European Central Bank) |
| Abstract: | This paper provides new survey evidence on firms' inflation expectations in the euro area. Building on the ECB's Survey on the Access to Finance of Enterprises (SAFE), we introduce consistent measurement of inflation expectations across countries and shed new light on the properties and causal effects of these expectations. We find considerable heterogeneity in firms' inflation expectations and show that firms disagree about future inflation more than professional forecasters but less than households. We document that differences in firms' demographics, firms' choices and constraints, and cross-country macroeconomic environments account for most of the variation in inflation expectations by roughly equal shares. Using an RCT approach, we show that firms update their inflation expectations in a Bayesian manner. Moreover, they revise their plans regarding prices, wages, costs and employment in response to information treatments about current or future inflation. |
| Keywords: | inflation expectations, firm decisions, price setting, surveys, randomised controlled trial |
| JEL: | E20 E31 E52 |
| Date: | 2024–05 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17015&r= |
| By: | OECD; Eurochambres; ICC |
| Abstract: | In today's rapidly evolving economy, businesses are facing growing challenges in recruiting workers with the right skills. Chambers of commerce can play an important role in helping communities tackle these pressing issues and building skills systems that are fit for the future. This paper draws on a 2024 survey undertaken by the OECD in collaboration with Eurochambres and International Chamber of Commerce, covering chambers from 65 countries. It explores the role chambers play in shaping and implementing skills policies at local, regional and national levels. Common approaches include supporting strategy development at both national and regional/local levels; serving as an intermediary between businesses and skills programmes; and, at least to some degree, being a direct provider of training themselves. As demands for agile and inclusive skills systems grow, this paper serves as a first step to explore how chambers can further support skills agendas. |
| Keywords: | Chambers of Commerce |
| JEL: | J24 |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:oec:cfeaaa:2024/07-en&r= |