nep-tra New Economics Papers
on Transition Economics
Issue of 2006‒03‒05
twenty-two papers chosen by
Tono Sanchez
Universitat de Valencia

  1. Estimating China's "Equilibrium" Real Exchange Rate By Steven Vincent Dunaway; Xiangming Li
  2. Institutions and Transition By Peter Murrell
  3. Seasonalities in China's Stock Markets: Cultural or Structural? By Li L. Ong; Jason D. Mitchell
  4. China?s Fiscal System: A Work in Progress By Christine C.P. Wong; Richard M. Bird
  5. Measuring the Performance of Fiscal Policy in Russia By Antonio Spilimbergo
  6. Does Inflation in China Affect the United States and Japan? By Luke Willard; Tarhan Feyzioglu
  7. Bulgaria ' s integration into the Pan-European economy and industrial restructuring By Ng, Francis; Kaminski, Bartlomiej
  8. Central Bank Reform and Inflation Dynamics in the Transition Economies theory and some evidence By Athanasios Papadopoulos; Giuseppe Diana; Moise Sidiropoulos
  9. Are the markets for factories and offices integrated? Evidence from Hong Kong? By Charles Ka Yui Leung; Peiling Wei; Siu Kei Wong
  10. The Stock-Flow Approach to the Real Exchange Rate of CEE Transition Economies: By Kirsten Lommatzsch; Balazs Egert; Amina Lahreche-Revil
  11. Interpreting Real Exchange Rate Movements in Transition Countries By Mark de Broeck; Torsten Sløk
  12. Revenue Administration Reform in Middle Eastern Countries, 1994-2004 By William Crandall; Jean-Paul Bodin
  13. Bulgaria ' s institutions and policies : integrating into Pan-European markets By Kaminski, Bartlomiej
  14. Wages, Layoffs, and Privatization: Evidence from Ukraine By J. David Brown; John S. Earle; Vladimir Vakhitov
  15. Market failures and government policies in gas markets By Machiel Mulder; Gijsbert Zwart
  16. The Feasibility of a Fixed Exchange Rate Regime for New EU-members Evidence from Real Exchange Rates By Clemens J M Kool; Tom Van Veen; Bertrand Chandelon; Katharina Raabe
  17. BOFIT Discussion Papers - Taxation, growth and welfare: Dynamic effects of Estonia’s income tax act By Michael Funke; Holger Strulik
  18. European parliament electoral turnout in Post-Communist Europe. By Christine Fauvelle-Aymar; Mary Stegmaier
  19. On the structural value of children and its implication on intended fertility in Bulgaria By Christoph Bühler
  20. The Macroeconomics of Remittances: the Case of Tajikistan By Alexei Kireyev
  21. Capital Account Liberalization, Capital Flow Patterns, and Policy Responses in the EU's New Member States By Zsófia Árvai
  22. How Tight is Too Tight? A Look at Welfare Implications of Distortionary Policies in Uzbekistan By David A. Grigorian; Edward R. Gemayel

  1. By: Steven Vincent Dunaway; Xiangming Li
    Date: 2005–11–02
  2. By: Peter Murrell (Department of Economics, University of Maryland)
    Abstract: Prepared for The New Palgrave Dictionary of Economics, 2nd Edition, this essay examines the evolution of both institutions and economists' thinking on institutions during transition. Early in transition, institutions were virtually ignored in the majority of normative prescriptions, but were central in the evolutionary-institutional approach. Later, after events influenced intellectual developments, institutions were at the center of analysis. Growth is strongly related to institutional construction. Transition countries built institutions speedily but with marked variation across countries. Legal systems and independent governmental agencies were sources of institutional growth, while government bureaucracies and informal mechanisms detracted from institutional growth. In China, reforms addressed problems that institutions usually do, but in unusual ways.
    Keywords: Institutions, transition, evolutionary-institutional, shock therapy, gradualism, China, law
    JEL: P2 P3 N4 O17 K0
    Date: 2006–02
  3. By: Li L. Ong; Jason D. Mitchell
    Date: 2006–01–19
  4. By: Christine C.P. Wong; Richard M. Bird (Rotman School of Management, University of Toronto)
    Abstract: We argue in this paper that unless China begins to tackle more systematically the serious problems that have emerged in the finances of its various levels of sub-national government the problems to which the present unsatisfactory system give rise will over time increasingly distort resource allocation, increase distributional tensions, and slow down the impressive recent growth of the Chinese economy. Despite the lack of solid and reliable information on the size and nature of China?s real fiscal system, we show that the evidence available is generally consistent with this pessimistic reading. China?s fiscal and ? in time ? economic future thus rests to some extent on reforms to key aspects of its fiscal system, especially its intergovernmental finances. Moreover, a more consistent and purposive framework to this complex of problems seems needed. Given the scale and scope of China?s underlying public finance problems, the ?reactive gradualism? evidenced in recent ad hoc reforms to this or that piece of the fiscal system has, we suggest, run its course.
    Keywords: China;intergovernmental finance;taxation;budget
    JEL: H11 H70 O53 P21
    Date: 2005–10
  5. By: Antonio Spilimbergo
    Date: 2006–01–09
  6. By: Luke Willard; Tarhan Feyzioglu
    Keywords: Inflation , China , United States , Japan , Deflation , Trade , Economic models ,
    Date: 2006–02–09
  7. By: Ng, Francis; Kaminski, Bartlomiej
    Abstract: This paper looks at Bulgaria ' s industrial restructuring through the lenses of its evolving specialization in international division of labor and integration into international markets with a special emphasis on EU markets. Its major findings can be summarized as follows: (1) Developments in Bulgaria ' s exports, its major drivers and factor content, during the " second transition " following the 1996 crisis have become reminiscent of developments in the early 1990s in European transition economies that have stayed the reform course. (2) The evoluti on of Bulgaria ' s total exports in terms of factor intensities before the " second transformational " recession was a testimony to aborted economic reforms. It not only defied expectations derived from the experience of CEEC-10 economies and its production factor endowments but also dramatically increased the cost of adjustment to market conditions for the economy as a whole. (3) Exports of unskilled labor-intensive products continue towering over other exports even during the current expansionary phase. The composition of top performers in EU markets indicates the shift toward natural resource and capital-intensive products. Bulgaria ' s export offer in EU markets has begun shifting toward more processed goods, mostly products of electro-engineering sectors. Bulgarian producers have made significant strides in information communication technology products and automotive parts. Trade in parts and engineering products has displayed strong growth. The returns usually associated with liberal reforms, that is, gains in competitiveness combined with a shift toward products in line with the country ' s endowments in production factors began to surface only recently. In contrast to the period preceding the second transformational recession in 1996-97, gains in competitiveness derive from corporate and industrial restructuring and not from subsidies.
    Keywords: Economic Theory & Research,Free Trade,Trade Policy,Agribusiness & Markets,Export Competitiveness
    Date: 2006–03–01
  8. By: Athanasios Papadopoulos (University of Crete); Giuseppe Diana (University Robert Schuman); Moise Sidiropoulos (Aristotle University of Thessaloniki)
    Date: 2005–09–03
  9. By: Charles Ka Yui Leung; Peiling Wei; Siu Kei Wong
    Abstract: Due to the relocation of manufacturing facilities from Hong Kong to Mainland China, it is widely believed that some vacant private factories have been used as offices in Hong Kong. Yet there is no direct and systematic evidence to support this speculation. In fact, according to MacGregor and Schwann (2003), industrial and commercial real estate shares some common features. Our research attempts to investigate empirically the price and volume relationship between industrial and commercial real estate, using both aggregate and disaggregate data from the industrial and commercial property markets in Hong Kong. The study was built on the observation that economic restructuring and geographical distance will affect the substitutability (and thus the correlation) of different types of property, and utilizes commonly used time series techniques for analysis. Policy implications are discussed.
    Keywords: aggregation bias, geographical distance, industrial real estate, substitutability
    JEL: G12 L80 R30
    Date: 2006–02
  10. By: Kirsten Lommatzsch (German Institute of Economic Research); Balazs Egert (University of Paris); Amina Lahreche-Revil
    Date: 2005–09–03
  11. By: Mark de Broeck; Torsten Sløk
    Abstract: Prepayment required for individual copies. An annual subscription is $375.00 a year. It includes 12 monthly shipments and priority mail delivery. The Stock No. for the subscription is WPEA.
    Keywords: Real effective exchange rates , Transition economies ,
  12. By: William Crandall; Jean-Paul Bodin
    Date: 2005–11–02
  13. By: Kaminski, Bartlomiej
    Abstract: This paper analyzes the process of institutional transformation in Bulgaria and assesses the extent to which it has established institutions and policies fostering domestic economic activity and integration into global markets. After a brief review of characteristics and achieved progress in first-generation reforms, that is, removal of central control over prices, liberalization of foreign trade and exchange rate regimes, the paper first assesses in the comparative perspective the progress made in the quality of governance and structural reforms. It then takes a look at the extent to which this has impacted foreign direct investment inflows and was translated into improved business environment in its domestic and external dimensions. The external dimension relates to backbone services facilitating trade and Bulgaria ' s trade policies. As far as the latter are concerned, the discussion highlights tensions that emerge from duality-regional versus multilateral-in Bulgaria ' s trade policy. Despite significant progress in implementation of structural reforms and converging to the EU acquis communautaire that has led to a significant enhancement in the quality of governance and market supporting institutions, " macro " institutional improvements are yet to be fully transplanted to a micro-level, as three areas appear to remain a binding constraint: First and foremost is the low quality of the judicial system and, by the same token, weaknesses in the enforcement of property rights and contracts. Second, backbone services facilitating trade remain a barrier. Bulgaria ranks low relative to the levels of efficiency achieved on average by both EU-8 and the EU-15 countries in management of ports, information technology infrastructure, and customs. Third, there are recurrent complaints among businesses of government bureaucracy, poor infrastructure, and frequent changes in the legal framework including taxation. As a result, the regulatory burden remains huge. There are still redundant and excessive sector-specific regulatory regimes. Bulgaria ' s markets for industrial goods are fully contestable for pan-Europe (EU-25, European Free Trade Association, Romania, and Turkey), exposing local producers to duty-free competition from imports. With relatively high most favored-nation tariff rates, the level of reverse discrimination significantly increased over the past couple of years. While this has not resulted in perceptible trade diversion, organizational arrangements preventing that to happen unnecessarily increase administrative intervention in the economy.
    Keywords: Governance Indicators,National Governance,Economic Policy, Institutions and Governance,Economic Theory & Research,Financial Crisis Management & Restructuring
    Date: 2006–03–01
  14. By: J. David Brown (Heriot-Watt University and CEU Labor Project); John S. Earle (W.E. Upjohn Institute for Employment Research and Central European University); Vladimir Vakhitov (University of Kentucky and Kyiv-Mohyla School of Economics)
    Abstract: This paper estimates the effects of privatization on worker separations and wages using retrospective data from a national probability sample of Ukrainian households. Detailed worker characteristics are used to control for compositional differences and to assess types of observable "winners" and "losers" from privatization. Preprivatization worker-firm matches are used to control for unobservables in worker and firm selection. The results imply that privatization reduces wages by 5 percent and cuts the layoff probability in half. Outside investor ownership reduces separations but leaves wages unaffected. Winners from privatization tend to be higher skilled employees of larger firms, but there is no discernable relationship with gender, education, or experience.
    Keywords: privatization, layoffs, wages, Ukraine
    JEL: D21 G34 J23 J31 L33 P23 P31
    Date: 2006–02
  15. By: Machiel Mulder; Gijsbert Zwart
    Abstract: This memorandum analyses the fundamental characteristics of the natural gas market and its consequences for government policies. In the past, the European gas market was dominated by state-owned monopolists but since the start of the liberalisation, privatisation and re-regulation in the early 1990s, the market has fundamentally changed. Nevertheless, governments are still involved in the gas industry, not only in gas exporting countries such as Russia, but also in a country like the Netherlands where the government has imposed a cap on production from the main gas field (Groningen) as well as owns shares in the main wholesale trader (Gasunie Trade & Supply) which has the obligation to accept all gas offered by producers on the small fields. In the main report of this project we present a cost-benefit analysis of the Dutch gas-depletion policy. In this memorandum we explore the natural-gas market more broadly, looking for factors why government intervention may be needed using the welfare-economic approach according to which government intervention should be based on the presence of market failures. After a brief description of the main characteristics of the gas industry, we systematically analyse sources of market failures, such as geopolitical factors, economies of scale and externalities, and finally go into the question which policy options may be chosen to address those market failures.
    Keywords: gas depletion; natural resources; market failures; government policy
    JEL: Q3 Q4 D6 L5
    Date: 2006–02
  16. By: Clemens J M Kool (University of Utrecht); Tom Van Veen (University of Maastricht); Bertrand Chandelon (University of Maastricht); Katharina Raabe (University of Maastricht)
    Date: 2005–09–03
  17. By: Michael Funke (Hamburg University); Holger Strulik (Copenhagen University)
    Date: 2005–09–03
  18. By: Christine Fauvelle-Aymar (LAEP); Mary Stegmaier (Department of Economics, University of Virginia)
    Abstract: The relatively low voter turnout rates in the June 2004 European Parliamentary elections in many of the post-communist states surprised observers. While the average turnout rate for these new-EU member states barely surpassed 30%, turnout exhibited much variance at the national and sub-national levels. In this article, we study the determinants of European Parliamentary election voter turnout rates in the post-communist countries at the regional level. Our central hypothesis is that regional turnout rates may be related to regional economic conditions and that in areas experiencing economic hardship, turnout will be lower. We also assess the extent that EU attitudes matter for turnout. A unique data set, compiled at the NUTS-3 statistical region level, is employed to test these hypotheses.
    Keywords: Economics of voting, participation, European Parliamentary election, post-communist countries.
    JEL: D72
    Date: 2006–01
  19. By: Christoph Bühler (Max Planck Institute for Demographic Research, Rostock, Germany)
    Abstract: Personal networks receive increasing recognition as structural determinants of fertility. However, the network perspective also helps to explain personal motivations for having children. Using theories of interpersonal exchange and of the value of children, it is argued that children can substantively alter and improve their parents’ social networks. Individuals perceive this potential advantageous development as a structural benefit and consider this value in their reproductive decisions. Data from Bulgaria, collected in 2002, support this argument. The intentions of females and males to have a first or second child are positively influenced by at least one structural value. Women’s intentions are promoted by the prospect that a child will bring their parents and relatives closer or will strengthen the bond with the partner. Male’s intentions are closely associated with the expectation that a child will improve their security at old age.
    Keywords: Bulgaria, costs, decision making, fertility determinants, social capital, social network, value of children
    JEL: J1 Z0
    Date: 2006–02
  20. By: Alexei Kireyev
    Date: 2006–01–18
  21. By: Zsófia Árvai
    Keywords: Capital flows , European Union , Capital account liberalization ,
    Date: 2005–11–30
  22. By: David A. Grigorian; Edward R. Gemayel
    Date: 2005–12–30

This nep-tra issue is ©2006 by Tono Sanchez. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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