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on Microeconomic European Issues |
| By: | Charles Yuji Horioka; Luigi Ventura |
| Abstract: | We analyze the saving motives of European households using micro-data from the Household Finance and Consumption Survey (HFCS), which is conducted by the European Central Bank. We find that the rank ordering of saving motives differs greatly depending on what criterion is used to rank them. For example, we find that the precautionary motive is the most important saving motive of European households when the proportion of households saving for each motive is used as the criterion to rank them but that the retirement motive is the most important saving motive of European households if the quantitative importance of each motive is taken into account. Moreover, the generosity of social safety nets seems to affect the importance of each saving motive, with saving for the retirement motive being less important in countries with generous public pension benefits and saving for the precautionary motive being less important in countries with generous health systems. These findings suggest that the retirement motive and the precautionary motive are the dominant motives for saving in Europe partly because social safety nets are not fully adequate. Finally, our findings suggest that the selfish life-cycle model is more applicable in Europe than is the altruism model. |
| JEL: | D12 D14 D15 D64 E21 J14 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32838 |
| By: | Natália Barbosa (School of Economics and Management, University of Minho) |
| Abstract: | The adoption of new digital technologies offers new opportunities and has the scope to engender positive effects on firms’ expansion and success in international markets. This paper examines the main factors driving the adoption of Artificial Intelligence (AI) and AI-related digital technologies that enable the Industry 4.0 transformation and whether these new generation of digital technologies affect exporting performance at firm level. Using a rich and representative sample of Portuguese firms over the period 2014-2020, the estimated results suggest that firm’s ex-ante performance, digital infrastructures and in-house ICT skills are the main drivers of digitalisation. However, conditional to ex-ante firm’s performance, there are heterogenous effects on exporting performance across digital technologies and across industries. Moreover, there is evidence of positive selection towards large firms, casting doubts on the inclusiveness of the adoption process and the performance effects of AI and AI-related technologies. |
| Keywords: | Artificial Intelligence, Industry 4.0 enabling digital technologies, firms’ exporting performance |
| JEL: | L20 H81 L25 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:mde:wpaper:183 |
| By: | Geyer, Johannes (DIW Berlin); Haan, Peter (DIW Berlin); Teschner, Mia (IZA) |
| Abstract: | The price for institutional long-term care is a central determinant of the demand for formal and informal long-term care. In this paper, we show how macroeconomic conditions affect these prices. The analysis is based on administrative data that contains rich information on the universe of nursing homes and ambulatory care services and about all recipients of long-term care benefits in Germany. For identification, we exploit variation in macroeconomic conditions measured by the unemployment rate across districts and over time, applying a panel data approach with facility and time fixed effects. Our empirical results show that a higher unemployment rate increases prices for permanent long-term care as well as for prices of accommodation and meals in nursing homes. We provide empirical evidence for the mechanism of these price effects. While we find that employment, working hours, and quality of care in nursing homes are not significantly affected by macroeconomic conditions, our results show that a higher unemployment rate increases the price of nursing homes through a change in the composition of patients: it induces a shift from care recipients with a low degree of impairment to patients with high demands for labor-intensive care. We also document a substitution of low-impairment care from nursing homes toward ambulatory and informal home care. |
| Keywords: | long-term care, nursing home prices, unemployment rate, macroeconomic conditions, informal care |
| JEL: | E32 I11 J20 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17197 |
| By: | Lukas Rosenberger; W. Walker Hanlon; Carl Hallmann |
| Abstract: | How did Britain sustain faster rates of economic growth than comparable European countries, such as France, during the Industrial Revolution? We argue that Britain possessed an important but underappreciated innovation advantage: British inventors worked in technologies that were more central within the innovation network. We offer a new approach for measuring the innovation network using patent data from Britain and France in the late-18th and early-19th century. We show that the network influenced innovation outcomes and demonstrate that British inventors worked in more central technologies within the innovation network than French inventors. Drawing on recently developed theoretical tools, and using a novel estimation strategy, we quantify the implications for technology growth rates in Britain compared to France. Our results indicate that the shape of the innovation network, and the location of British inventors within it, explains an important share of the more rapid technological change and industrial growth in Britain during the Industrial Revolution. |
| JEL: | N13 O30 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32875 |
| By: | Pilar L’Hotellerie-Fallois (BANCO DE ESPAÑA); Marta Manrique (BANCO DE ESPAÑA); Danilo Bianco |
| Abstract: | Climate transition in the European Union has been a central sphere of action of the European Commission during the 2019-2024 legislature. This paper details how EU climate policies have evolved in that period through various instruments, starting with the European Green Deal which led to the inclusion in EU Law of the ambition to be climate-neutral by 2050. This aim is also an integral part of the recovery and resilience plans adopted under NextGenerationEU, the REPowerEU plan and the Green Deal Industrial Plan. |
| Keywords: | climate transition in the EU, energy transition in the EU, European Green Deal (EGD), NextGenerationEU, REPowerEU, Green Deal Industrial Plan (GDIP) |
| JEL: | E61 F53 Q42 Q43 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:bde:opaper:2424e |
| By: | Schito, Marco; Klimavičiūtė, Luka; Pál, Rozália |
| Abstract: | Does increasing inflation affect firms' investment decisions? This article employs the European Investment Bank Investment Survey (EIBIS) dataset to explore the association between the increased inflation that the EU countries have experienced since 2021, and firms' investment decisions. We find evidence that very high rates of inflation (over 20%) are associated with higher probabilities of investment, likely driven by measures to improve energy efficiency (particularly for SMEs) and a desire to avoid the devaluation of cash reserves (for large firms). We further find a positive association between SMEs' ability to pass costs onto consumers (the so-called pass-through rate) and investment decision, suggesting a higher degree of reliance on the generation of continuous revenues for investment purposes compared with large firms. Inflation's by-products (increased interest rates, difficulties in accessing external financing, increasing uncertainty) are found to be important negative factors in investment decisions. (146 words) |
| Keywords: | EIBIS, inflation, investment, cost pass-through rate, financial tightening, SMEs |
| JEL: | D22 D25 E31 E43 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:eibwps:301874 |
| By: | Linda Kadriji (South East European University, North Macedonia, Faculty of Business and Economics) |
| Abstract: | The main objective of this paper is to empirically investigate the impact of income inequality on economic growth and its determinants in transition countries (Albania, Kosovo, Serbia, Hungary, Estonia, Czech Republic, Poland, Russia, and North Macedonia) during the period 2000-2020. This research employs econometric methods, including Ordinary Least Squares (OLS) with robust standard errors, random and fixed effects models, and the Hausman-Taylor model with instrumental variables (IV). The findings from this empirical research highlight two key conclusions: first, that reducing income inequality positively influences economic growth; and second, that subsidies and transfers play a crucial role in decreasing income inequality, which in turn fosters economic growth in transition countries. |
| Keywords: | sGini index, economic growth, subsidies and transfers |
| JEL: | B41 D63 H20 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:sko:wpaper:bep-2024-04 |
| By: | Konstantinos Mavrigiannakis; Stelios Sakkas |
| Abstract: | This paper aims at assessing quantitatively the macroeconomic impact of EU sanctions against Russia for the economy of Cyprus. To this end, we use a medium-scale micro-founded DSGE model of a small open economy participating in a currency union like the euro area calibrated to the economy of Cyprus. The model features two sectors of production, namely the tradable and the non-tradable one. In this model, EU sanctions influence the sanctioning economy (i.e. Cyprus) through a mix of foreign shocks that hit in principle the tradable sector. In particular, to mimic the economic environment (namely, how all this started in 2022), we analyse first the effects of an energy-type shock modelled as a standard cost-push shock on imported goods. In turn, we add to this economic environment the impact of policy reactions like EU sanctions against Russia. In this context and given the strong trade ties of Cyprus with Russia we model sanctions as two simultaneous negative exogenous shocks, that is, a temporary decrease in the exported goods reflecting primarily reductions observed in tourism and financial services, and inward foreign direct investment (FDI). Contrary to the mild impacts reported in the literature for the majority of EU countries we find non negligible adverse effects for the economy of Cyprus which range from -1.28% to -3.36% in terms of average output loss in the short run. Given Cyprus’s vulnerable external position we show that the impact of sanctions depend crucially on the degree of tightening financing conditions which are likely to hit particularly more countries with high initial current account deficits and debt stocks. |
| Keywords: | Cyprus, economic sanctions, trade disintegration |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:hel:greese:200 |
| By: | Guillem Verd Llabrés (Universidad de Barcelona, Barcelona, Spain) |
| Abstract: | After the end of World War II, family allowances became central to Western European Welfare states as they influenced gender relations, demographic growth, child welfare and wage regulation. Yet, their implementation was shaped by several determinants —fertility rates, religion, Conservative dictatorships, or party competition— whose relative importance is still open to study. Spain provides a significant case study to understand such determinants. It was a firstcomer in developing family allowances, giving them a crucial role in the Francoist social policies, but their development was marked by significant religious cleavages, left-right political competition and regime changes during the interwar period. The paper shows that, despite gaining momentum among catholic campaigners and Parties, the apathy —if not opposition— from the left, employers and landowners prevented the scheme from being developed before the Spanish Civil War. After the conflict, despite becoming central to Francoist social programs targeting the family and the labour market, family allowances fell well behind campaigners’ expectations, and proved unable to reach a significant proportion of Spanish families. The Spanish low fiscal capacity and the inability to collect contributions —particularly in the countryside— were central to understanding such a difficult development. |
| Keywords: | Family Allowances, Spain, Religious Cleavage, Political Regime, Fiscal Capacity |
| JEL: | I38 J13 N34 N44 |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:ahe:dtaehe:2405 |
| By: | Baubeau, Patrice; Teixeira, Mateo |
| Abstract: | This article addresses the growing gap in the literature between qualitative data on prices and money in France around World War II, and the available CPI. It gathers archival price data to calculate a new CPI for 1938-1949, incorporating both official and black-market prices. The study demonstrates the adequacy of available sources and the robustness of the new CPI, both in its construction and when compared to contemporary analyses. Three key findings are that France did not experience exponential price acceleration; that dictatorship (1940-1944) was no more effective at price control than democracy (1945-1949); and that the 1944-1945 wage increases had a minor impact on inflation, questioning the price-wage loop explanation of France’s post-war inflation. |
| Keywords: | Inflation; Prices; Black markets; Repression; Politics; Public statistics, History; Political economy; France, World War 2 |
| JEL: | E31 N0 N01 N1 N44 P4 P44 P48 |
| Date: | 2024–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121621 |