nep-tra New Economics Papers
on Transition Economics
Issue of 2007‒04‒14
seven papers chosen by
J. David Brown
Heriot-Watt University

  1. Bank supervision Russian style: Evidence of conflicts between micro- and macroprudential concerns By Claeys, Sophie; Schoors, Koen
  2. Long-term growth prospects for the Russian economy By Roland Beck; Annette Kamps; Elitza Mileva
  3. Changes in the foreign trade structure of the Russian Far East under the process of transition toward a market economy By Hiraizumi, Hideki
  4. Free Trade between the EU and Russia - Sectoral Effects and Impacts on Northwest Russia By Ville Kaitila
  5. Rationality as a Barrier to Peace: Micro-Evidence from Kosovo By Sumon Kumar Bhaumik; Ira N. Gang; Myeong-Su Yun
  6. Long-run effects of training programs for the unemployment in East Germany By Fitzenberger, Bernd; Völter, Robert
  7. Does Foreign Direct Investment Have Impacts on the Growth in Labor Productivity of Vietnamese Domestic Firms? By Le Thanh THUY

  1. By: Claeys, Sophie (Research Department, Central Bank of Sweden); Schoors, Koen (CERISE)
    Abstract: Supervisors sometimes have to manage both the micro- and macro- prudential dimensions of bank stability. These may either conflict or complement each other. We analyze prudential supervision by the Central Bank of Russia (CBR). We find evidence of micro-prudential concerns, measured as the rule-based enforcement of bank standards. Macro-prudential concerns are also documented: Banks in concentrated bank markets, large banks, money center banks and large deposit banks are less likely to face license withdrawal. Further, the CBR is reluctant to withdraw licenses when there are “too many banks to fail”. Finally, macro-prudential concerns induce regulatory forbearance, revealing conflicts with micro-prudential objectives.
    Keywords: Prudential Supervision; Bank Stability; Systemic Stability
    JEL: E50 G20 N20
    Date: 2007–03–01
  2. By: Roland Beck (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Annette Kamps (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Elitza Mileva
    Abstract: This paper provides an assessment of Russia’s long-term growth prospects. In particular, it addresses the question of the medium- and long-term sustainability of the country’s currently high growth rates. Starting from the notion that Russia’s fast economic expansion in recent years has benefited from a number of singular factors such as the unprecedented rise in oil prices, the paper presents new evidence on Russia’s oil price dependency using a Vector Error Correction Model (VECM) framework. The findings indicate that the positive impact of rising oil prices on Russia’s GDP growth has increased in recent years, but tends to be buffered by an appreciation of the real effective exchange rate which is stimulating imports. Additionally, there is empirical confirmation that growth in the service sector – a symptom usually associated with the Dutch disease phenomenon – is mainly a result of the transition process. Finally, the paper provides an overview of the relevant factors that are likely to affect Russia’s growth performance in the future. JEL Classification: O43, O 47, O51, O11, O14.
    Keywords: Russia, economic growth.
    Date: 2007–03
  3. By: Hiraizumi, Hideki
    Keywords: Centrally planned economy (CPE), Process of transition towards the market economy, The role of foreign trade, International trade, Transition to market economy, Local economy, Russia
    JEL: F1
    Date: 2007–03
  4. By: Ville Kaitila
    Abstract: We analyse the implications of free trade between the EU25 and Russia using GTAP, a computable general equilibrium model. We review the sectoral effects by countries and make a tentative assessment of the impact on the regions in Northwest Russia. Free trade on its own would have a negative terms-of-trade effect in Russia and cause a small decline in welfare. If coupled with an increase in productivity, welfare would increase. This emphasises the importance of reforms in the Russian economy. The quantity of production in Russia in ferrous and non-ferrous metallurgy, machine building and metal working, and wood and paper are the principal declining sectors with free trade. Production in capital goods, fuel industry, and services increases. Thus there are some symptoms of Dutch disease. Due to its production structure the northwest would seem to benefit slightly less than Russia on average in terms of the volume of gross regional product. In this respect there are differences between the regions of northwest Russia.
    Keywords: EU, Russia, free trade, integration
    JEL: F15 F17
    Date: 2007–04–10
  5. By: Sumon Kumar Bhaumik (Brunel University and IZA); Ira N. Gang (Rutgers University and IZA); Myeong-Su Yun (Tulane University and IZA)
    Abstract: Despite a significant expansion of the literature on conflicts and fragility of states, only a few systematic attempts have been made to link the theoretical literature on social conflicts to the available micro-level information about the people who are involved in these conflicts. We address this lacuna in the literature using a household-level data set from Kosovo. Our analysis suggests that it is individually rational for competing ethnic communities, Kosovo Albanians and Kosovo Serbs, to resist a quick agreement on a social contract to share the region’s resources.
    Keywords: conflict, individual rationality, economic deprivation, micro-evidence, Balkans, Kosovo
    JEL: I32 O12 J15
    Date: 2007–03
  6. By: Fitzenberger, Bernd; Völter, Robert
    Abstract: Public sector sponsored training was implemented at a large scale during the transition process in East Germany. Based on new administrative data, we estimate the differential effects of three different programs for East Germany during the transition process. We apply a dynamic multiple treatment approach using matching based on inflows into unemployment. We find positive medium-and long-run employment effects for the largest program, Provision of Specific Professional Skills and Techniques. In contrast, the programs practice firms and retraining show no consistent positive employment effects. Furthermore, no program results in a reduction of benefit recipiency and the effects are quite similar for females and males.
    Keywords: multiple treatments, training programs, East Germany
    JEL: C14 H43 J68
    Date: 2007
  7. By: Le Thanh THUY
    Abstract: Foreign Direct Investment has been considered a very important factor in the growth of recent Vietnam's economy and so far it has drawn a lot of concerns of economic researches in Vietnam. However, studies on the impacts of Foreign Direct Investment on Vietnam's economy, especially the technological spillovers are still very scarce compared with other developing countries. This study makes an attempt to figure out the main channels and estimate the degree of Spillover effects in Vietnam using industry level data for 1995-1999 and 2000-2002 periods. The linkage between foreign investors and domestic private sectors is found to play an important role for technological spillovers from Foreign Direct Investment in Vietnam.
    Date: 2007–04

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