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on Transition Economics |
| By: | Bonin, John (BOFIT); Hasan, Iftekhar (BOFIT); Wachtel, Paul (BOFIT) |
| Abstract: | Modern banking institutions were virtually non-existent in the planned economies of central Europe and the former Soviet Union. In the early transition period, banking sectors began to develop during several years of macroeconomic decline and turbulence accompanied by repeated bank crises. However, governments in many transition countries learned from these tumultuous experiences and eventually dealt successfully with the accumulated bad loans and lack of strong bank regulation. In addition, rapid progress in bank privatization and consolidation took place in the late 1990s and early 2000s, usually with the participation of foreign banks. By 2005, the banking sectors in many transition countries had developed sufficiently to provide a wide range of services with solid bank performance. Recently, banks have switched their focus from lending to enterprises in a somewhat underdeveloped institutional environment to new collateralized lending to households, which accounts for much of the recent growth of credit in many transition countries. |
| Keywords: | transition banking; bank privatization; foreign banks; bank regulation; credit growth |
| JEL: | G21 P30 P34 P52 |
| Date: | 2008–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_012&r=tra |
| By: | William Latham (Department of Economics,University of Delaware); Hong Yin (Department of Economics,University of Delaware) |
| Abstract: | We examine the return to innovation in terms of economic growth at the provincial level to assess whether or not policies that promote R&D, such as China’s Science and Technology Policy, have been productive for all of China’s regions. The return to innovation at the provincial level is estimated using a value-added Cobb-Douglas production function. The measure of the effect of innovation (patenting activity) is valued-added industrial output. The data are a balanced panel for 30 provinces for the period 1991-2004. We find that the production function including innovation fits the Chinese provincial level data well. These estimates indicate that technology plays a positive role in industrial growth at the provincial level; however, the contribution of technology is far too small, which indicates that China’s economic growth is largely driven by the factor inputs. The results support the views that the linkages between innovation activity and commercialization of new technology are weak within Chinese domestic firms which have difficulties in exploiting and adopting the new technologies. The results also indicate that the inter-regional technology spillovers are positive but relatively small and weak, compared to the European regions and the states in the US. The estimated results further confirm that the impact of industrial reforms during the period of 1994-99 on China’s technological development is negative, as there seems to be neither exogenous technical progress nor technology’s contribution to the value-added industrial output during those years. |
| Keywords: | China, patents, productivity, innovation, regions |
| JEL: | O33 R11 O47 O55 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:08-20.&r=tra |
| By: | Ritola, Maria (BOFIT) |
| Abstract: | This study analyses the level and geographic dimension of China's market integration. The objective is to provide a broad characterization of China's market integration by performing a variety of empirical tests and providing comparisons to other studies on the same topic. The models tested are grounded in the law of one price. Price convergence is analysed with univariate time series methods, where linear and non-linear cointegration models refer to convergence in the short run and in the long run, respectively. The non-linear model is considered a good fit for analysing transitional economies, because the non-linear trend variable in the model indicates whether there is movement towards integration in the long run. Convergence of prices is first analysed by comparing city-level prices with China's national average price level and then by dividing China into three regional clusters. The estimation results suggest that the level of integration across Chinese cities is fairly high by international standards. The great majority of price series trending towards integration are services. The geographic pattern of China's market integration did not turn out as expected. Eastern cities are among the least integrated cities in the nationwide examination. Relatively high levels of integration were detected from several central and south-eastern cities. Furthermore, the cluster convergence approach to analyse China's market integration did not augment the eastern cities' level of convergence. |
| Keywords: | China; market integration; law of one price; price dispersion; regional clusters; convergence |
| JEL: | C12 C32 P22 R10 |
| Date: | 2008–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2008_013&r=tra |
| By: | Marina Tsygankova (Statistics Norway) |
| Abstract: | This descriptive study discusses the effects of increases in domestic gas prices on the Russian gas market. Domestic natural gas prices have remained below their long-run marginal cost for more than a decade since Russia’s movement toward a market economy in 1991. As a result, the ability of the Russian gas sector to meet future growing demand from domestic and foreign consumers has come under question. In an attempt to avoid gas shortages in the future, Russian government wishes to introduce netback pricing of natural gas after 2011. Netback pricing refers to the process of equalizing the gas price in Russia to the gas price in Europe after adjusting for export taxes, transportation costs, and transit tariffs. The paper concludes that netback pricing can help Russia to avoid a gas deficit. However, the gas supply in Russia will remain tight until 2011. The downside of netback pricing is that it increases the ability of Gazprom to strengthen its control over the Russian gas industry. |
| Keywords: | Russia; natural gas; netback price; supply shortage; deficit |
| JEL: | D40 L11 Q31 Q38 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:554&r=tra |
| By: | Qu, Zhaopeng (Frank) (Beijing Normal University); Zhao, Zhong (IZA) |
| Abstract: | One of the most notable social phenomena in China is the large urban-rural disparity. There are many studies of it, but most of them focus on income or earnings inequality. In this paper, we investigate the consumption disparity between urban and rural households in China from 1988 to 2002. Our results suggest that low quantiles are associated with large consumption disparity. The price effect is the dominant factor for the urban-rural consumption disparity. This disparity increased significantly, both at mean and at every quantile, from 1988 to 2002. However, most of the increase happened from 1988 to 1995, and this increase was mainly from the higher growth rate of urban household consumption. Our results also suggest that rural-urban migration and improvement of the rural educational level are very helpful in reducing urban-rural disparity. |
| Keywords: | inequality, consumption, quantile regression decomposition, China |
| JEL: | O18 O53 C15 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3659&r=tra |
| By: | Vadlamannati, Krishna Chaitanya; Tamazian, Artur |
| Abstract: | This purpose of this paper is to examine the direct effects of institutional quality on human rights abuses in transition economies. We make use of an alternative empirical approach for evaluation of institutional system’s development in transition economies developed by Chousa et al. (2005). To assess this relationship, along with institutional quality index, which is an operational indicator of institutional system dynamics to observe institutional reforms-economic growth interdependence, we also construct cost of decline in institutional quality and transition from communist to reforms years variables. We also evaluate the effect of institutional quality on human rights abuses conditioned by the level of transition from communist to reforms years. The empirical work reveals that an improvement in institutional quality increases government respect for human rights. While, any decline in institutional quality leads to human rights abuses. The results also show that government respect for human rights are strongly associated with transition towards reforms years. |
| Keywords: | Institutional Quality; Human Rights; Transition economies |
| JEL: | Z0 P20 P27 |
| Date: | 2008–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10137&r=tra |
| By: | Phan, Diep (U of Wisconsin); Coxhead, Ian |
| Abstract: | Vietnam’s economic boom during the transition to a market economy has centered on very rapid growth in some sectors and some provinces, yet poverty has diminished across the entire country. With capital investments highly concentrated by province and sector, geographic labor mobility may be critical in spreading the gains from growth. Conversely, rising income inequality may be attributable in part to impediments to migration. We first use census data to investigate migration patterns and determinants. We then examine the role of migration as an influence on cross-province income differentials. The former analysis robustly confirms economic motives for migration but also suggests the existence of poverty-related labor immobility at the provincial level. Examination of income differentials between pairs of provinces reveals that the impact of migration on inequality can be either negative or positive. A robust inequality-reducing impact of migration is found for migration flows into provinces where most of Vietnam’s trade-oriented industrial investments are located. |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:wisagr:507&r=tra |
| By: | Arslan Razmi (University of Massachusetts Amherst) |
| Abstract: | China’s rapid growth and success in poverty reduction over the last three decades has inspired world-wide admiration. This paper uses a simple framework with a Kaleckian flavor to analyze structural developments in the Chinese economy, and to understand some of the distributional consequences. Some of the possible sources of these distributional developments are then further analyzed using a trade-theoretic approach. Other aspects of China’s investment- and export-led growth strategy are discussed along with the problems that the focused pursuit of such a strategy has raised. We conclude that China’s growth model may now have outlived its utility, both on economic and socio-political grounds. JEL Categories: |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ums:papers:2008-09&r=tra |
| By: | Albu, Lucian; Georgescu, George; Ghizdeanu, Ion |
| Abstract: | The main objective of Romania’s post-accession strategy stands for the convergence with the EU Member States. If the nominal convergence (low inflation rate, stability of the exchange and interest rates, contained public debt) seems more easily to be achieved, the real convergence is supposed to catch up structural gap, connected more or less to issues belonging to the development process approach. The study aims at comparative assessment of Romania’s development level within UE 27, proposing a composite index, called Relative Gap Scoring (RGS). This method is based on a scoring calculation depending on the quotient of each indicator level for a certain country and of the country’s ranked first for the respectively indicator, having the advantage to evidence the relative gaps and providing a synthetic image of their resultant. The RGS index has been constructed by the geometric aggregation of scoring resulted for 10 economic and social indicators, considered relevant for the prospective of real convergence. Examining Romania's position within the ranking of EU countries according to the RGS index, the study found that large gap of the current state of economic and social development of our country still remain. Nevertheless, it is worth mentioning that Romania stood at 42.5 percent of the EU average in 2007, while in relation to GDP per capita (PPS) at 40.4 percent, which reveals that, in terms of real convergence, the time horizon of catching up with EU countries could be shorter. |
| Keywords: | Economic and Social Development; International Comparisons; Composite Indexes; Statistical Methods |
| JEL: | C10 B40 O10 O57 |
| Date: | 2008–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10170&r=tra |
| By: | Ofer Malamud; Cristian Pop-Eleches |
| Abstract: | This paper examines the relative benefits of general education and vocational training in Romania, a country which experienced major technological and institutional change during its transition from Communism to a market economy. To avoid the bias caused by non-random selection, we exploit a 1973 educational reform which shifted a large proportion of students from vocational training to general education while keeping average years of schooling unchanged. Using data from the 1992 and 2002 Romanian Censuses and household surveys from 1995-2000, we analyze the effect of this policy with a regression discontinuity design. We found that men in cohorts affected by the policy were significantly less likely to work in manual or craft-related occupations than their counterparts who were unaffected by the policy. However, in contrast to cross-sectional findings, we found no difference in labor market participation or earnings between cohorts affected and unaffected by the policy. We therefore conclude that differences in labor market returns between graduates of vocational and general schools are largely driven by selection. |
| Keywords: | Romania, vocational training, general education |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:har:wpaper:0807&r=tra |
| By: | Zhihong Yu; Yundan Gong; Sourafel Girma; Holger Görg |
| Abstract: | It is widely accepted that China has been experiencing an export-led growth approach. However, the question whether government can reshape industry structure through production subsidies to enhance export performance has not been answered. This paper analyses the impact of production subsidies on firms’ export performance using a very comprehensive and recent firm level database and controlling for the endogeneity of subsidies. It documents robust evidence that production subsidies stimulate export activity, although this effect is conditional on firm characteristics. In particular, the beneficial impact of subsidies is found to be more pronounced amongst profit-making firms, firms in capital intensive industries and those located in non-coastal regions. Compared to firm characteristics, the extent of heterogeneity across ownership structure (SOEs, collectives and privately-owned firms) proves to be relatively less important |
| Keywords: | Exporting, subsidies, China, endogenous Tobit |
| JEL: | F1 O2 P3 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1442&r=tra |
| By: | Belke, Ansgar (University of Duisburg-Essen); Spies, Julia (Institut für Angewandte Wirtschaftsforschung (IAW)) |
| Abstract: | The purpose of this paper is to assess the implications of the Economic and Monetary Union (EMU) accession of eight Central and Eastern European Countries (CEECs) on their share in EMU-12 imports. Overcoming biases related to endogeneity, omitted variables and sample selection, our results indicate that the common currency has boosted intra-EMU imports by 7%. Under the assumption that the same relationship between the explanatory variables and imports will hold for EMU-CEEC trade, we are able to predict the future impact of the Euro. Our findings suggest that except for the least integrated countries, Poland, Latvia and Lithuania, all CEECs can expect increases in the EMU-12 import share. |
| Keywords: | Central and Eastern European countries, Euro area enlargement, gravity model, panel estimation |
| JEL: | F15 F41 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp3647&r=tra |
| By: | Goran Svilanovic |
| Abstract: | A discussion of the role that the United Nations Economic Commission for Europe can play in helping to integrate the countries of South-Eastern Europe into the wider European economy as well as the global economy. Central to this discussion is how the UNECE can increase its institutional cooperation with the Regional Cooperation Council and the European Union's Neighbourhood Policy. A number of specific recommendations are made. |
| Keywords: | South-East Europe, Foreign Policy, International Affairs, Economic integration, European Union enlargement, Regional Cooperation Council, Western Balkins, United Nations |
| JEL: | F15 F50 F51 F53 F59 O24 O52 P20 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:ece:dispap:2008_4&r=tra |
| By: | François Rycx (DULBEA, Université libre de Bruxelles, Brussels, and IZA, Bonn); Ilan Tojerow (DULBEA, Université libre de Bruxelles, Brussels.); Daphné Valsamis (DULBEA, Université libre de Bruxelles, Brussels) |
| Abstract: | This study compares the structure and determinants of inter-industry wage differentials in Eastern and Western European countries on the basis of the 2002 European Structure of Earnings Survey. Findings show substantial differences in earnings across sectors in all countries, even when controlling for a wide range of employee, job and employer characteristics. The hierarchy of sectors in terms of wages appears to be quite similar in Eastern and Western European countries. In contrast, the dispersion of inter-industry wage differentials is found to fluctuate considerably across countries and to be strongly correlated with collective bargaining characteristics. |
| Keywords: | Inter-industry wage differentials, Collective bargaining, Europe, Matched employer-employee data. |
| JEL: | J31 J51 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:dul:wpaper:08-17rs&r=tra |
| By: | D Mayston; J Yang |
| Abstract: | Against the background of the recent rate of expansion of China's higher education system that has outstripped even China's own high rate of economic growth, the paper examines evidence of the emerging problem of graduate overeducation within China. Based upon a pecking-order model of employment offers and associated ordered probit model, it analyses the empirical factors which determine the incidence of graduate overeducation across China. The extent to which individual students have an incentive to become overeducated compared to a socially optimal level of their education is also examined in the context of a supporting economic model that compares individual and socially optimal levels of investment in education, in the face of labour market demands. The extent of the divergence between individual and socially optimal levels of investment in education, and of the associated levels of graduate overeducation, is found to depend upon how recent major increases in the supply of graduates within China will interact with the future growth rates in job specifications, in demand variables and in resultant graduate wages within China. |
| Keywords: | Graduate overeducation. higher education policy. Optimal education investment. Economic growth in China |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:yor:yorken:08/25&r=tra |
| By: | Lepushynskyy, Volodymyr |
| Abstract: | An essential condition of the effectiveness of price-stability-based monetary regime is availability of an efficient mechanism for transmission of monetary policy impulses to the real sector of economy. Characteristic of the economy of Ukraine, the same as many other transition economies is the existence of institutional and structural factors that reduce the effectiveness of monetary transmission mechanism. This paper discusses the above mentioned factors and measures aimed to strengthen the efficiency of transmission mechanism of monetary policy. |
| Keywords: | monetary policy; monetary transmission mechanism; transition economy |
| JEL: | E5 |
| Date: | 2008–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10102&r=tra |
| By: | Stefan Gravemeyer (University of Paderborn); Thomas Gries (University of Paderborn); Jinjun Xue (Nagoya University, Japan) |
| Abstract: | This paper estimates the income effect of non productivity related discriminatory factors, compared to productivity related returns on human capital in Shenzhen. The design of the Shenzhen Household Survey 2005 that was employed enables us to include a large set of discriminating factors in a Mincer Becker type of income model. Further, we are able to take a unique look at the migrant population in this outstanding urban centre. Our results show that the human capital approach holds. We also find strong evidence of a significant influence of social norms and policies, particularly relevant in a developing and transition economy, even in such an exceptional city. |
| Keywords: | Shenzhen, Income distribution, Education, Transition process |
| JEL: | O15 O18 I21 |
| Date: | 2008–07 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:wpaper:16&r=tra |
| By: | Vadlamannati, Krishna Chaitanya |
| Abstract: | Conventional wisdom posits absence of systematic relationship between economic reforms and human rights. Taking the case of transition economies, Vadlamannati & Soysa (2008) shows significant positive relationship between economic reforms and various forms of human rights. This brings us to the next question on the impact of choice and speed of reforms on human rights performance. In other words, does speed and choice of reforms increase or decrease government respect for human rights in transition economies? This is the question our paper tries to address. The Anglo-Saxon perspective is that speed of reforms lead to growth and development which inturn generates respect for human rights. While skeptics contend that rushing towards a free market economy would always be destructive as development process tends to be exclusive creating exogenous shocks leading to social and economic unrest. This leads to domestic violence and conflicts, allowing governments to resort to repressive measures. We use a new method to construct ‘speed of reforms’ variable for transition economies for the period 1993 – 2006 to estimate its impact on all forms of human rights. Further, using the methodology of Wolf (1999) on discrete groupings of choice of reforms of transition economies, we classify the countries under radical, gradual and laggard reformer groups. We measure the impact of speed of reforms on human rights performance conditioned by choice of reforms. Our findings show that speed of reforms significantly improves government respect for all forms of human rights, while volatility in reforms is associated with human rights abuses. But the interesting finding is that, controlling for the speed of reforms attained, the choice with which the country has reformed plays pivotal role in determining human rights performance. While radical reforming countries are associated with better human rights performance, gradualists and laggards share poor human rights performance. |
| Keywords: | Speed & choice of economic Reforms; Human rights; Transition economies |
| JEL: | P2 P48 P26 |
| Date: | 2008–08–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:10141&r=tra |
| By: | Huang, Jikun; Wu, Yunhua; Yang, Zhijian; Rozelle, Scott; Fabiosa, Jacinto F.; Dong, Fengxia |
| Abstract: | With rapid income growth, dairy production and consumption in China have increased significantly. This emergence of the dairy sector will provide opportunities for farmers to participate in a high-value, potentially more lucrative enterprise. The overall goal of this paper is to analyze the major determinants of farmers’ participation in dairy production. Our main question is whether or not the pace of the emergence of the dairy processing industry has affected the ability of farmers to participate in dairy production and whether or not it has limited the expansion of their herd size. Based on household, village and processor surveys conducted in the Greater Beijing region, our analysis shows that the location of dairy processing firms is one of the key factors that determines the participation of farmers in dairy production. Although other factors affect participation and herd size—for example, access to roads and the ability to get a job off the farm (which affects the opportunity cost of household members)—access to dairy processors is shown to be the major factor that has encouraged the growth of dairy production over the past decade. The results also show that poor, less educated farmers with relatively less access to land are not excluded from the rapid expansion of the Greater Beijing dairy market. |
| Keywords: | China, dairy processing, dairy production. |
| Date: | 2008–08–27 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12981&r=tra |
| By: | André Farber (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.); Nguyen Huu Tu (The Bureau of the Central Committee of the Communist Party of Vietnam); Tran Tri Dung (InvestVietnam Corp., Vietnam); Quan-Hoang Vuong (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels.) |
| Abstract: | This study focuses on those substantial changes that characterize the shift of Vietnam’s macroeconomic structures and evolution of micro-structural interaction over an important period of 1991-2008. The results show that these events are completely distinct in terms of (i) Economic nature; (ii) Scale and depth of changes; (iii) Start and end results; and, (iv) Requirement for macroeconomic decisions. The study rejected a suspicion of similarity between the contagion of the Asian financial crisis in 1997-98 and economic chaos in the first half of 2008 (starting from late 2007). The depth, economic settings of, and interconnection between macro choices and micro decisions have all grown up significantly, partly due to a much deeper level of integration of Vietnam into the world’s economy. On the one hand, this phenomenon gives rise to efficiency of macro level policies because the consideration of micro-structural factors within the framework has definitely become increasingly critical. On the other and, this is a unique opportunity for the macroeconomic mechanism of Vietnam to improve vastly, given the context in which the national economy entered an everchanging period under pressures of globalization and re-integration. The authors hope to also open up paths for further empirical verifications and to stress on the fact that macro policies will have, from now on, to be decided in line with changing micro-settings, which specify a market economy and decide the degree of success of any macroeconomic choices. |
| Keywords: | Financial system; inflation; economic growth; interest rate; exchange rate; FDI; FPI; banking sector; stock markets; monetary and fiscal policy; Vietnam. |
| JEL: | G10 G18 E22 E31 E44 |
| Date: | 2008–08 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:08-023&r=tra |
| By: | Hilary Ingham; Mike Ingham; Jan Herbst |
| Abstract: | Unemployment continues to bedevil Poland, albeit with striking sub-national differences, which this paper seeks to explain using random effects error component two-stage estimation for the country's NUTS 4 level powiats. Given the economy's peculiar configuration under communism, with its large private agricultural sector, emphasis is placed on rural-urban differences. While less densely populated areas do suffer higher unemployment rates, the effect is moderated by hidden unemployment in farming. On the other hand, powiats that housed the ex-state farms suffer a negative long-term legacy. Other notable results include an evident positive impact of foreign capital on local labour market fortunes. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:005613&r=tra |
| By: | Raghbendra Jha; Tu Dang; Yusuf Tashrifov |
| Abstract: | We examine the profile of poverty and vulnerability in Tajikistan using household level panel data for 2004 and 2005. The drop in poverty was largely due to increase in remittances from workers working overseas. People are more likely to be poor if they live in a) rural areas, b) large households, c) households with a large proportion of children; or are pensioners or live in a household whose head is a pensioner. One half of the households observed to be non-poor are vulnerable to poverty. With expected utility approach, our analysis suggests that vulnerability associated with inequality is very large, whereas that from idiosyncratic risk is moderate. Aggregate shocks have been favorable and reduced vulnerability. We advance several policy recommendations. |
| Keywords: | Poverty, Vulnerability, Panel data, Covariate and idiosyncratic risks. |
| JEL: | C21 C23 I32 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:pas:papers:2008-09&r=tra |
| By: | Felix Hüfner; Isabell Koske |
| Abstract: | In January 2009, the Slovak Republic will adopt the euro and become the 16th member of the euro area. This paper investigates the implications of euro adoption in the Slovak Republic for inflation and interest rates with an attempt to quantify their likely size as well as their consequences for the general public. The empirical analysis – which makes use of the experience of the first-wave euro area countries – suggests that the cash changeover will most likely be associated with a moderate increase in consumer prices, estimated at around 0.3%. Policy measures to reduce this effect include public information campaigns, the conversion of publicly administered prices with the exact conversion rate and the reduction of administrative obstacles to increase supply. The minor purchasing power losses associated with this price increase will not be evenly distributed across the population with higher income households and families with children expected to be harder hit than others. Even though the exchange rate vis-à-vis the euro area will be irrevocably fixed, past appreciations of the koruna are still likely to pass-through to some downward pressure on consumer prices, with the cumulative effect estimated to amount to around 1.5% up to mid-2009. In the longer run, the Balassa-Samuelson effect and other factors affecting catch-up economies may raise the Slovak inflation rate above the euro area level. As capital markets have already fully priced in euro membership, no immediate effect on short- and long-term interest rates in the wholesale markets is to be expected for January 2009. In the longer run, euro adoption can be expected to foster financial integration, thereby leading to a convergence of Slovak retail interest rates towards euro area levels. This reduction in retail interest rates will benefit the general public with mortgage borrowers likely to reap the largest benefits. A potential risk of low real interest rates is the emergence of a boom-bust cycle; prudent fiscal policy and further structural reforms, including enhanced competition, would help to counter any such developments. <P>L’adoption de l’euro par la République slovaque : les implications pour l’inflation et les taux d’intérêt <BR>En janvier 2009, la République slovaque adoptera l'euro et deviendra le 16ème membre de la zone euro. Ce document examine les implications de l'adoption de l'euro dans la République slovaque pour l'inflation et les taux d'intérêt avec une tentative d'évaluer quantitativement leur taille probable aussi bien que leurs conséquences pour la population. L'analyse empirique – qui se sert de l'expérience des pays de la zone euro de la première vague – suggère que le changement des liquidités soit très probablement associé à une augmentation modérée des prix à la consommation, estimée à peu près à 0.3 %. Les mesures politiques pour réduire cet effet incluent des campagnes publiques d'information, la conversion des prix publiquement administrés avec le taux de conversion exact et la réduction d'obstacles administratifs pour augmenter l’offre. Les pertes de pouvoir d'achat mineures associées à cette augmentation des prix ne seront pas également distribuées à travers la population; les ménages aux revenus plus élevés et les familles avec des enfants pourraient être frappés plus durement que les autres. Bien que le taux de change vis-à-vis de la zone euro soit irrévocablement fixé, les appréciations passées de la couronne slovaque pourraient encore se répercuter sur les prix à la consommation; l'effet cumulatif des effets retardés est évalué à environ 1½ pour cent jusqu'au milieu de 2009. À plus long terme, l'effet Balassa-Samuelson et d'autres facteurs affectant des économies en rattrapage peuvent accroître l'inflation slovaque au-dessus du niveau de la zone euro. Comme les marchés financiers ont déjà entièrement tenu compte de l'adhésion de l'euro, aucun effet immédiat sur les taux d'intérêt de grande clientèle à court terme ou à long terme n’est attendu pour janvier 2009. À plus long terme, on peut s'attendre à ce que l'adoption de l'euro favorise l'intégration financière, menant ainsi à une convergence des taux d'intérêt aux particuliers vers les niveaux de la zone euro. Cette réduction de taux d'intérêt aux particuliers profitera au grand public avec des emprunteurs hypothécaires récoltant probablement les plus grands avantages. Un risque potentiel lié aux taux d'intérêt réels bas est l'apparition d’une phase d’essor suivie d’une récession ; une politique fiscale prudente et des nouvelles réformes structurelles, y compris l’amélioration de la compétitivité, aideraient à résister à de tels développements. |
| Keywords: | Slovak Republic, République slovaque, inflation, inflation, interest rate, taux d'intérêt, euro changeover, adoption de l’euro |
| JEL: | E31 E43 F36 |
| Date: | 2008–08–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:632-en&r=tra |