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on Transition Economics |
| By: | Guillaume Gaulier; Francoise Lemoine; Deniz Unal-Kesenci |
| Abstract: | China has taken advantage of the globalisation process and has become a assembly country for firms in Asia which have extended to China their production and trade networks. China’s position in the segmentation of the production processes has fostered its trade in high-technology products. However the rapid technological upgrading of China’s trade is associated with an increasing dependence on foreign capital and technology. The emergence of China has led to the reorganisation of production in Asia and to a triangular trade pattern: firms in advanced Asian economies use China as an export base and instead of exporting finished goods to the US and Europe, now export intermediate goods to their affiliates in China. |
| Keywords: | technology transfers; international trade; specialization; FDI; globalization; IDPP; specialization; China; east Asia; international production sharing |
| JEL: | F13 F14 F15 O53 |
| Date: | 2005–06 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2005-09&r=tra |
| By: | Li-Gang Liu |
| Abstract: | This paper shows that financial services trade liberalization in China has set impetus for accelerated domestic financial liberalization. Foreign banks, though still relatively small in size, have already exerted considerable influence on China's capital flows. Empirical findings from a gravity model analysis indicate that financial services trade liberalization under the WTO promotes bank loans to developing economies strongly though not evenly conditional on country characteristics. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:05024&r=tra |
| By: | Maryanchyk Ivan |
| Abstract: | This paper applies gravity theory to model Ukrainian trade patterns. I estimate two specifications — Global and Ukrainian. The former is used to forecast optimal trade volumes and compare with actual. The latter helps analyzing factors affecting Ukrainian trade. According to the results, Ukraine explored its trade potential with the EU. On the other hand, having, according to the model, low potential in 1995 the country achieved even better results in this direction in 2002. On the contrary, trade with CIS states deteriorated despite vast possibilities predicted by the model. Another unexplored opportunity is large economies of G7, trade partners in Asia and Americas. To reach its potential, Ukraine should liberalize trade relations with Russia (to gain in trade and reach the potential) and with EU (to safeguard achieved results). Accession to the WTO would help to explore potential with G7 and other big economies. |
| JEL: | F12 F13 F14 |
| Date: | 2005–09–13 |
| URL: | http://d.repec.org/n?u=RePEc:eer:wpalle:03-121e&r=tra |
| By: | Zhang Guoying (school of management of Tianjin university); Zheng Pi-e (school of management of Tianjin university) |
| JEL: | A |
| Date: | 2005–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpgt:0509009&r=tra |
| By: | Schadler, Susan; Drummond, Paulo Flavio Nacif; Kuijs, Louis; Murgasova, Zuzana; van Elkan, Rachel |
| Abstract: | Upon entry into the European Union (EU), countries become members of the Economic and Monetary Union (EMU), with a derogation from adopting the euro as their currency (that is, each country joining the EU commits to replace its national currency with the euro, but can choose when to request permission to do so). For most of these countries, adopting the euro will entail major economic change. This paper examines likely economic developments and policy challenges for the five former transition countries in central Europe--the Czech Republic, Hungary, Poland, the Slovak Republic, and Slovenia--that joined the EU in May 2004 and operate independent monetary policies but have not yet achieved policy convergence with the rest of the euro area. |
| Date: | 2005 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfocp:234&r=tra |
| By: | Zhang Guoying (school of manangement of Tianjin university); Zheng Pi-e (school of manangement of Tianjin university) |
| Abstract: | The paper introduces the Relationship between energy and economic development first£¬then through analyzing characters of energy consumption all over the world and the basic facts about China¡¯s energy resources, drawing the conclusion that the energy and resources of China is hardly able to meet demand,and puts forward the policy orientation for china¡¯s energy development accordingly. At last, points out the prospect of China¡¯s energy industry. |
| JEL: | E |
| Date: | 2005–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpma:0509024&r=tra |
| By: | Hongbin Li; Lai Ting Sin; Junsen Zhang; Yaohui Zhao |
| Abstract: | This paper studies the relative contribution of husbands and wives to the family income in the process of economic transition by using the Chinese Urban Household Survey data from 1988 to 1999. We find that, contrary to the experience of western countries, the share of wives¡¦ labor earnings in urban China tends to decline slightly over time and the share of husbands¡¦ labor earnings is stable. This implies that the role of urban Chinese husbands as the main financial supporters of their families becomes relatively more important during economic transition. We argue that this trend may have reflected the restoration of the functions of household production and labor market in the process of economic transition. This restoration allows households to allocate time, effort and human capital investment for each household member and for each household and market activity in a more efficient way. Our further empirical analysis suggests that at least two factors have accounted for the strengthening of the relative importance of husbands in contributing to family income in urban China: 1) the enlargement of the positive effect of children on husbands and the opposite effect for wives; and 2) the shrinkage of the positive income effect on the leisure of husbands. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00014&r=tra |
| By: | Olli Castrén (External Developments Division, DG-Economics, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | This paper uses data on currency options prices for the exchange rates of the three largest new EU member states Poland, Czech Republic and Hungary vis-à-vis the euro and the US dollar to estimate the risk-neutral density (RND) functions and the density interval bands. Analysing the RNDs, we find that only some of the implied moments on the Polish zloty exchange rate systematically move around policy events, while the implied moments on the RNDs on the Czech koruna and Hungarian forint show more systematic changes. Regarding the HUF/EUR currency pair, monetary policy news have a significant impact on all moments, while changes in implied standard deviation signal a higher probability of interest rate changes by the Hungarian central bank. The more marked results for HUF/EUR exchange rate could reflect the fixed exchange rate regime prevailing throughout the sample period. |
| Keywords: | Foreign exchange rate market sentiment; monetary policy news; currency options data. |
| JEL: | E52 F31 G15 |
| Date: | 2005–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050440&r=tra |
| By: | James Alm; Jorge Martinez-Vazquez; Benno Torgler |
| Abstract: | This paper examines citizens’ attitudes toward paying taxes – what is sometimes termed their “tax morale”, or the intrinsic motivation to pay taxes – focusing on the experience of individuals in the Russian Federation. A unique aspect of our analysis is our ability to study tax morale before (1991), during (1995), and shortly after (1999) the transition of the Russian economy from a centrally planned economy to one based on market reliance. Our empirical analysis uses data from the World Values Survey and the European Values Survey. The results show decay in tax morale in the first four years of the transition from 1991 to 1995, and a small recovery in 1999. These results are consistent with the relevance of social norms in tax compliance, where the widespread perception of tax evasion and of a corrupt and inefficient state led initially to a decline of tax morale. However, the results also suggest that the restoration of a higher level of trust in the state, after some progress in the transition to a market economy, positively influenced tax morale. Using disaggregated data for Russian regions, we also find significant regional differences in tax morale, reflecting the degree of trust different regions have toward Moscow’s institutions and policies. |
| Keywords: | tax morale; tax compliance; social norms; transition countries |
| JEL: | H26 K42 P35 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2005-27&r=tra |
| By: | Kazuyuki Motohashi |
| Abstract: | This paper is a first attempt of looking into the impact of IT and enterprise reform on productivity of Chinese manufacturing firms by using large scale firm level datasets from 1995 to 2002. It is found that enterprise reforms captured by entry and exit of firms have a positive impact on aggregated productivity growth. In addition, IT plays relatively more important role in productivity performance of post reform enterprises, as compared to enterprises which are not affected by major restructuring in the course of Chinese state owned enterprise reforms. |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:05025&r=tra |
| By: | Hongbin Li; Pak Wai Liu; Ning Ma; Junsen Zhang |
| Abstract: | This paper empirically estimates the returns to education using twins data that the authors collected from urban China. Our ordinary least-squares estimate shows that one year of schooling increases an individual¡¦s earnings by 8.4 percent. However, once we use the within-twin-pair fixed effects model, the return is reduced to 2.7 percent, which suggests that much of the estimated returns to education in China that have been found in previous studies are due to omitted ability or the family effect. This finding suggests that well-educated people are faring well in China mainly because of their superior ability or family background advantages, rather than because of knowledge that they acquired at school. We further investigate why the true return is low and the omitted ability bias high, and find evidence that it may be a consequence of the distinct education system in China, which is highly selective and exam oriented. More specifically, we find that high school education mainly serves as a mechanism to select college students, and has zero returns in terms of earnings. In contrast, both vocational school education and college education have a large return that is comparable to that found in rich Western countries. |
| JEL: | J31 O15 P20 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00013&r=tra |
| By: | Hongbin Li; Pak Wai Liu; Ning Ma; Junsen Zhang |
| Abstract: | This paper empirically estimates the returns to membership of the Chinese Communist Party using unique twins data that the authors collected from urban China. Our ordinary least squares estimate shows that being a Party member increases earnings by 28.1 percent, but when we use a within-twin-pair fixed-effects model, the effect of Party membership all but disappears, which suggests that much of the estimated value of Party membership that is given in the literature is due to the effects of omitted ability or family background. The findings suggest that Party members fare well not because of their special political status per se, but because of the superior ability that allowed them to pass through the strict Party membership selection process. |
| JEL: | J31 O15 P26 |
| Date: | 2005–08 |
| URL: | http://d.repec.org/n?u=RePEc:chk:cuhkdc:00015&r=tra |
| By: | António Afonso (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany and ISEG/UTL - Technical University of Lisbon; CISEP – Research Centre on the Portuguese Economy, R. Miguel Lupi 20, 1249-078 Lisbon, Portugal); Christiane Nickel (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany); Philipp Rother (European Central Bank, Kaiserstraße 29, D-60311 Frankfurt am Main, Germany) |
| Abstract: | We study fiscal consolidations in the Central and Eastern European countries and what determines the probability of their success. We define consolidation events as substantive improvements in fiscal balances adjusting for the impact of cyclical effects. We use Logit models for the period 1991–2003 to assess the determinants of the success of a fiscal adjustment. The results seem to suggest that for these countries expenditure based consolidations have tended to be more successful. By contrast, revenue based consolidations have a tendency to be less successful. |
| Keywords: | Fiscal policy; fiscal episodes; Central and Eastern Europe; Logit models. |
| JEL: | C25 E62 H62 |
| Date: | 2005–04 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050473&r=tra |
| By: | Sunil Mani (Centre for Development Studies) |
| Abstract: | China and India have one of the largest telecommunications equipment markets in the world. The paper employs a sectoral system of innovation framework towards understanding the differential outcomes in innovation capability building in the industry achieved by China and India. The countries have pursued widely diverging strategies for developing their domestic innovation capability. India followed a very rigid policy of indigenous development of domestic technologies by establishing a stand-alone public laboratory that developed state-of-the art switching technologies. These were then transferred to manufacturing enterprises in both public and private sectors. The enterprises themselves did not have any in-house R&D capability. The public laboratory was also not given any strategic direction, even though it was technologically speaking, very competent. Consequently the country, despite possessing good quality human resource was unable to keep pace with changes in the technology frontier and the equipment industry has now become essentially dominated by affiliates of MNCs. China, on the contrary, first depended on MNCs for her technology needs in this area. But subsequently encouraged the emergence of three national champions, two of which are erstwhile public laboratories. The country has built up considerable hardware capability in both fixed line and mobile communications technology and has also emerged as a major player in world markets. Although the sectoral system of innovation in both the countries were promoted and nurtured by the state through a variety of instruments, the quality of such interventionist strategy is found to be better in China. The final outcome proves this line of argument. |
| Keywords: | Innovation capability, China, India, Telecommunications industry, Digital switching systems, Mobile telephony |
| JEL: | L63 O31 O32 O38 |
| Date: | 2005–07 |
| URL: | http://d.repec.org/n?u=RePEc:ind:cdswpp:373&r=tra |
| By: | Nævdal, Eric (Department of Economics and Resource Management, Norwegian University of Life Science); Wagner, Martin (Department of Economics and Finance, Institute for Advanced Studies, Vienna, Austria) |
| Abstract: | In this paper we derive the correct solution of optimal closure of the state sector studied in Section 6.4 of Aghion and Blanchard (1994). Aghion and Blanchard only present an 'approximate' solution which entails a constant unemployment rate in what they call a turnpike approximation. We show that optimal unemployment paths have two features. First, unemployment is increasing up to a certain point in time, when, second, the remaining inefficient state sector is closed down. At that point in time, which we may define as the end of transition, unemployment is discontinuous. The approximate solution presented by Aghion and Blanchard is thus found to lead to welfare losses compared to the optimal policy. In particular, the unemployment rate corresponding to the solution presented in Aghion and Blanchard is too low. Our solution is formally based on transforming the dynamic optimization problem to a scrap value problem with free terminal time. |
| Keywords: | Transition, Optimal unemployment rate, Dynamic optimization |
| JEL: | C61 E61 P20 |
| Date: | 2005–09 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihsesp:175&r=tra |
| By: | Kadri Männasoo; David G Mayes |
| Abstract: | This paper considers the joint role of macro-economic and bankspecific factors in explaining the occurrence of banking problems in the twenty-one Central and East European emerging markets over the recent decade. Using data at the individual bank level we show, using a logit model, that the macroeconomic factors play a central role in determining banking sector instability in the early stages of difficulty, while the bankspecific factors are more important in the later stages and gain more weight as the banking sector develops and the institutional framework becomes mature. |
| Keywords: | banking sector vulnerability, banking crises, early warning indicators, Central and Eastern Europe |
| JEL: | E44 G21 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2005-08&r=tra |
| By: | Oldrich Kyn (Boston University) |
| Abstract: | This paper was presented at the Belgrade conference for one hundred years anniversary of 'Das Kapital'. Marx himself said very little about the concrete organization of a socialist economy. His general remarks about socialism were 'elaborated' by his followers by inference from Marx's criticism of capitalism and by inclusion of principles that did originate with other socialist or 'Marxist' thinkers. This explains why certain views about the organization of the socialist economy that are today presented as 'Marxian' may be in direct contradiction to some of Marx's own views. Marx could not disengage himself completely from his own historical determination. It is quite obvious that to a large extent he was influenced by the topics and analytical tools of his theoretical forerunners and contemporaries. But the evolution of economic theory continued after Marx. New problems appeared and new methods were developed, especially mathematical methods, which Marx could not have used in his time. Marx believed that market must be replaced by a rational planned control of the economy because he saw the market mechanism as functioning purely on ex post basis and that the lack of ex ante coordination of production decisions leads necessarily to the spontaneous imbalances and cyclical fluctuations in market economies. But market does not function solely in an ex post manner. No producer works completely 'in the dark', he always has some information, albeit incomplete, that allows him to anticipate demand and thus determine what is to be produced. The quality of the coordination done by the market depends on how good is the anticipation of future demand. In the XXth century forecasting methods have undergone fast development. Methods of demand analysis make it possible to predict changes in demand for individual types of commodities. Those and many other new developments greatly anhance the available information and improve the ex ante decision-making of firms and thus limit necessary corrections which the market must make ex post. |
| Keywords: | Marx, Market Economy, Socialism, Central Planning, Alienation, |
| JEL: | B |
| Date: | 2005–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:wpa:wuwpmh:0509005&r=tra |
| By: | Marcin Kolasa (National Bank of Poland, Warsaw, Poland) |
| Abstract: | This paper considers productivity developments in the new EU member states and provides evidence on factors driving productivity growth in these countries, focusing on a panel of Polish manufacturing industries. Companies in Poland seem to benefit significantly from transfer of technologies that have been accumulated in more developed economies. By contrast, no strong evidence is found on immediate technology transfer. Another result is a significant effect of domestic innovation activity. There are signs that market reforms also boosted efficiency, whereas the role of reallocation of production factors towards more productive activities was marginal. Bearing in mind all methodological and data-related caveats, as well as cross-country diversity, caution is required while interpreting the findings and extrapolating them to other new member states. However, the results obtained provide some policy implications and make the case for taking into account domestic innovation activity while constructing endogenous growth models for the EU catching-up economies. |
| Keywords: | Multi-factor productivity; innovation; convergence; new member states; manufacturing. |
| JEL: | C23 O31 O47 |
| Date: | 2005–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20050486&r=tra |
| By: | Alexis Derviz (Czech National Bank, Na P?íkop? 28, CZ-115 03 Praha 1, Czech Republic) |
| Abstract: | The paper proposes a multi-factor international asset pricing model in which the exchange rate is allowed to be co-determined by a risk factor imperfectly correlated to other priced risks in the economy. The significance of this factor can be established as long as one is able to observe a proxy for the foreign cash order flow. Then, the asset pricing model is decomposed into the standard ICCAPM no-arbitrage setup characterized by a pricing kernel, in which, however, the “autarky” exchange rate is unobserved, and an additional equation that links this autarchic currency price with the FX order flow. The model is put in the state space form. The unobserved variables span the macroeconomic risk factors with an impact on the asset markets and determine the dynamics of the pricing kernel, the autarchic exchange rate and the FX order flow. A comparison of models allowing for an independent OF risk factor with a restricted one, where the forex order flow plays no role, should disclose the existence of a “nonfundamental” source of a systematic divergence of the observed and the autarchic (i.e. fundamental) FX returns. The model is calibrated and tested on the Czech koruna/euro exchange rate in a setting with seven Czech and euro area asset returns. |
| Keywords: | Exchange rate; Pricing kernel; Order flow; Latent risk; State space. |
| JEL: | F31 F41 G12 G15 |
| Date: | 2004–03 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20040314&r=tra |
| By: | Attila Rátfai (Central European University, Department of Economics) |
| Abstract: | By placing store-level price data into bivariate Structural VAR models of inflation and relative price asymmetry, this study evaluates the quantitative importance of idiosyncratic pricing shocks in short-run aggregate price change dynamics. Robustly to alternative definitions of the relative price, identification schemes dictated by two-sided (S,s) pricing theory and measures of asymmetry in the relative price distribution, idiosyncratic shocks explain about 25 to 30 percent of the forecast error variance in inflation at the 12-month horizon. While the contemporaneous correlation between inflation and relative price asymmetry is positive, idiosyncratic shocks lead to a substantial build-up in inflation only after two to five months following the initial disturbance. |
| Keywords: | (S,s) Pricing, Relative Price, Inflation, Structural VAR |
| JEL: | E31 |
| Date: | 2004–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20040301&r=tra |
| By: | Hermann Sautter |
| Abstract: | In order to qualify economic growth as “pro-poor”, at least per capita income-growth rates of the poor should be larger than the corresponding growth-rates of the non-poor resulting in a lower degree of distributional inequality. Measured in this sense, economic growth in South- Eastern Europe during the last 10-15 years was not pro-poor but pro-rich. Future growth can be changed towards the “pro-poor”-goal through a strategy with two “legs”: Stimulation of overall growth and specific programs to make economic growth “pro-poor”. Overall growth can be stimulated by good governance, macro-economic stability and the establishment of competitive markets. Specific programs should be focussed on sectors the poor work in (mainly agriculture), on regions the poor live in (mainly rural areas) and on the demand for factors the poor possess or are able to possess (labour). The paper discusses some elements of rural development, the possibilities of stimulating the demand for labour, and the necessary steps to improve the access of the poor to education and health-services. In addition to that, the problems of “pockets of poverty” are being discussed. A consistent strategy like this requires political decisiveness and administrative competence. It is hard to imagine that it can be materialized without giving the poor “voice” to influence the institutions and policies that affect their lives. |
| Date: | 2005–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:got:iaidps:114&r=tra |
| By: | Tomasz Lyziak (National Bank of Poland, Bureau of Macroeconomic Research, ul. ?wi?tokrzyska 11/21, 00-919 Warsaw, Poland.) |
| Abstract: | Inflation expectations constitute a subject of particular contemporary interest to central banks, especially those pursuing a monetary policy based on a strategy of direct inflation targeting. Macroeconomic theory indicates that the transmission of monetary policy impulses and their impact on the real and nominal sectors of the economy bear a close relationship to properties of inflation expectations. Qualitative data on inflation expectations, as obtained from surveys, can be quantified with the use of probability or regression methods. This paper presents the results of two versions of the probability method, implemented in order to estimate numerical measures of Polish consumer inflation expectations, based on the monthly Ipsos-Demoskop survey. In addition, the unbiasedness and macroeconomic efficiency of Polish consumer inflation expectations are tested, as are the way in which these are formed. The pattern of responses to the survey question and quantified measures of Polish consumer inflation expectations are also compared with the respective findings for the euro area. |
| Keywords: | Inflation expectations; Surveys; Rationality; Poland; Euro Area. |
| JEL: | C42 D12 D84 E58 |
| Date: | 2003–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20030287&r=tra |
| By: | Johannes Stephan |
| Abstract: | Diese Arbeit ergänzt die frühere Analyse der Spezialisierungsmuster und den sich daraus ergebenden Zukunftsaussichten (patterns and prospects: Stephan, 2003). Deren Ziel war es, das künftig zu erwartende Wachstumstempo der Produktivität an den Spezialisierungsmustern im verarbeitenden Gewerbe abzulesen. In der vorliegenden Arbeit wird nun zusätzlich der Außenhandel in die Abschätzung der Aussichten einbezogen. Die sich hier ergebenden Ergebnisse stimmen im Allgemeinen mit den Resultaten der früheren Untersuchung überein. Das wichtigste Ergebnis betrifft Slowenien und die Slowakische Republik: In beiden Ländern deuten die jeweiligen Spezialisierungsmuster sowohl im Außenhandel als auch in der Binnenwirtschaft auf ein hohes Potenzial für rasches Produktivitätswachstum. Polen und Estland zeigen dagegen deutlich weniger Potenzial, nur für Poland werden die düsteren Aussichten aus der ursprünglichen Analyse bestätigt. |
| Date: | 2003–11 |
| URL: | http://d.repec.org/n?u=RePEc:iwh:dispap:184&r=tra |