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on Transition Economics |
| By: | Schwartz, Gerd (International Monetary Fund); Corbacho, Ana (International Monetary Fund); Cui, Qiang (International Monetary Fund); Ganelli, Giovanni (International Monetary Fund); Manasse, Paolo (University of Bologna.) |
| Abstract: | Most new EU member states (NMS) need further fiscal adjustment to support economic growth and macroeconomic stability. In this context, achieving income convergence with other EU members rests more with maintaining productivity growth, attracting foreign savings, and improving investment efficiency than with increasing government spending (including for infrastructure). Additional institutional fiscal reforms, aimed at improving expenditure efficiency and facilitating private sector investment, will be needed to support these objectives. However, further fiscal adjustment and reforms do not necessarily need to depress public investment. New financing options for public investment - including from various EU funds and through public-private partnerships - can ease existing fiscal and macroeconomic constraints, but present both new opportunities and challenges that need to be handled carefully. |
| Keywords: | new member states; sustainable growth; convergence; infrastructure investemnt; public-private partnership; EU fund |
| JEL: | F21 H54 H62 |
| Date: | 2008–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2008_005&r=tra |
| By: | Brown, David (Heriot-Watt University); Fay, Marianne (World Bank); V. Lall, Somik (World Bank); Gun Wang, Hyoung (World Bank); Felkner, John (University of Chicago) |
| Abstract: | We examine the economic implications of infrastructure investment policies that try to improve economic conditions in Russia's peripheral regions. Our analysis of firm-level industrial data for 1989 and 2004 highlights a 'death of distance' in industrial location, with increasing concentration of new firms in regions with good market access. We assess the geographic determinants of growth econometrically and identify market size and proximity to Moscow and regional infrastructure as important drivers of productivity for new and for privately-owned firms. Simulations show that the benefits of infrastructure improvements are highest in the country's capital region where economic activity is already concentrated. Policies that divert public investment towards peripheral regions run the risk of slowing down national economic growth. |
| Keywords: | Transport infrastructure; gravity; distance; travel time; market access; multi-factor productivity; Russia |
| JEL: | D24 H54 R12 R53 |
| Date: | 2008–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ris:eibpap:2008_010&r=tra |
| By: | Zuzana Brixiova |
| Abstract: | In mid-2008, high employment and low unemployment rates characterised the Estonian labour market in comparison with the average of the EU15 countries. While aggregate outcomes improved during 2000-07, large inequalities persisted across regions, ethnic groups, and workers with different skill levels. As Estonia entered recession in 2008, the unemployment rate almost doubled between the 2nd and the 4th quarter, and is expected to rise further in 2009 and 2010. More flexible labour markets will be a key adjustment mechanism during the recession as well as in the medium term if Estonia is to become a knowledge-based economy. Given the currency board arrangement and low synchronisation with the euro area, flexibility is also needed to cushion asymmetric shocks. In December 2008, parliament adopted the new Employment Contract Act, deregulating employment protection while increasing income security of the unemployed. This paper discusses options for removing the remaining barriers that impede worker reallocation across jobs, sectors, and regions into more productive activities.<P>La flexibilité du marché du travail en Estonie : comment l’améliorer ?<BR>Au milieu de 2008, le marché du travail estonien se caractérisait par un taux élevé d’emploi et un faible taux de chômage par comparaison avec la moyenne de l’UE15. De fortes inégalités persistaient entre régions, groupes ethniques et travailleurs de niveaux différents de qualification. Lorsque l’Estonie est entrée en récession en 2008, le taux de chômage a presque doublé entre le 2e et le 4e trimestre, et il devrait encore augmenter en 2009 et 2010. Une plus grande flexibilité du marché du travail constituera un mécanisme essentiel d’ajustement durant la récession et à moyen terme dans la perspective d’une économie fondée sur le savoir. En décembre 2008, le parlement a adopté la loi sur l’emploi, qui a déréglementé la protection de l’emploi tout en renforçant la sécurité du revenu pour les chômeurs. Ce document a pour thème l’élimination des obstacles résiduels au redéploiement des travailleurs entre emplois, secteurs et régions, au profit des activités plus productives. |
| JEL: | E24 J08 J64 |
| Date: | 2009–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:697-en&r=tra |
| By: | Belton M. Fleisher (Department of Economics, Ohio State University); Seonghoon Kim (Department of Economics, Ohio State University) |
| Abstract: | Mothers born around the China Great Leap Forward Famine (famine-born mothers) are likely to have worse adult outcomes due to a negative relationship between fetal malnutrition and their health and cognitive ability. Using data from the China Health and Nutrition Survey, I investigate whether famine-born mothers transmit less human capital to their offspring through various channels, including less cognitive ability and other innate traits and by the choice of less investment in children’s human capital. My study also focuses on possible gender differences in these effects. I find that in-utero famine experience of famine-born mothers is negatively related to the education and labor outcomes of their offspring. However, female children are less affected by mothers’ famine experience than are men. This outcome suggests that Trivers-Willard (1973) effects dominate parental-choice effects despite the well-known son-preference of China. |
| Keywords: | Gender difference, Malnutrition, Health, Labor Market Outcomes, Schooling, Barker hypothesis, Trivers-Willard hypothesis, China Famine |
| JEL: | I12 J16 P36 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:osu:osuewp:09-04&r=tra |
| By: | Christa N. Brunnschweiler (CER-ETH - Center of Economic Research at ETH Zurich, Switzerland) |
| Abstract: | This paper examines the impact of oil on economic growth in transition economies of the former Soviet Union (FSU) and Central and Eastern Europe (CEE). We use oil production and reserves data in a series of panel estimations to show that oil has had strong and robust positive growth effects between 1990-2006. This is confirmed when we consider the different oil ownership structures. Additionally, we find that privatization levels have had positive growth effects, while privatization speed has had negative effects on growth. |
| Keywords: | oil, resource curse, economic growth, transition countries, oil ownership |
| JEL: | Q32 O40 O13 P28 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:09-108&r=tra |
| By: | Filip De Beule |
| Abstract: | Multinational companies exercise their impact on the economic development of the host countries and regions through Foreign Direct Investments (FDI). The host countries tap the benefits from these FDIs through the production linkages between the foreign affiliates and domestic firms. This paper attempts to examine with regards to backward linkages of foreign invested enterprise in the province of Guangdong, China. The study shows that the Triad investors have a tendency to source less than the Chinese investors, Hong Kong being the largest. The study draws that local sourcing doesn’t automatically increase overtime. Sourcing from abroad seems rather stable, with approximately half of the inputs being imported. |
| Keywords: | backward linkages; foreign subsidiaries; Guangdong; China; local sourcing; multinational companies; foreign direct investments; foreign invested enterprises; Hong Kong Direct Investment |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:1951&r=tra |
| By: | Daniela Pirvu (Faculty of Economics, University of Pitesti); Martina Eckardt (Andrássy University, Budapest) |
| Abstract: | In the last few years, many countries Central and Eastern European countries have reduced their corporate income tax rates with the purpose of attracting multinational companies. |
| Keywords: | competitiveness, corporate income taxes, foreign direct investments |
| JEL: | F5 H3 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:pts:wpaper:f1&r=tra |
| By: | Andrea Beltratti (Bocconi University); Bernardo Bortolotti (Fondazione Eni Enrico Mattei and Università di Torino); Marianna Caccavaio (Bocconi University) |
| Abstract: | In 2005-2006 China reformed its stock market by eliminating non-tradable shares. The regulator set general guidelines and then assigned responsibility for implementation to each company. We derive relations that should have been followed by the prices of stocks and exploit a company-level data set to compare the actual and the theoretical price reactions. We find evidence for abnormal returns both before the beginning of the reform and during the reform. Cross-sectionally, abnormal returns are associated mainly with turnover and compensation. This shows that in a speculative market, investors do not properly react to unambiguous corporate actions. |
| Keywords: | Speculation, Chinese Stock Market, Market segmentation, Event study, Market Efficiency |
| JEL: | G14 N25 |
| Date: | 2009–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2009.15&r=tra |
| By: | Guilhem Fabre (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | “Chimerica” illustrates the interactions between a Chinese model of high savings, overinvestment and export-led growth and the American model of leverage investment, credit consumption and finance-led growth. The collapse of the U.S model, linked with the unregulated derivatives market, drives China to redirect its growth toward domestic consumption, despite the strengthening of regionalisation in East Asia. The new stimulus plan, based on investment, is limited by both income disparities and the under-development of social protection. Land reform, or the collective redistribution of the remaining state assets, could stimulate domestic consumption. But the first solution deprives the local state of financial resources, and the second solution collides with the interests of the state-party system. However, stronger social movements could lead to a better income distribution. Like two faces of the same coin, credit consumption or high savings rate reflect the crisis of a global accumulation regime, tailored for a financial oligarchy in the U.S, or for a party-state oligarchy in China. |
| Keywords: | World Financial crisis, World Economic crisis, China, Usa |
| JEL: | F02 F43 F59 R58 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2009_06&r=tra |
| By: | François Gardes (Centre d'Economie de la Sorbonne - Paris School of Economics); Christophe Starzec (Centre d'Economie de la Sorbonne) |
| Abstract: | This paper analyzes characteristics of the informal economy in Poland in the context of transition, using a specific survey carried out in the framework of the classic Labour Force Survey, conducted by the Polish National Statistical office (GUS), in 1995. The participation probabilities of three types of informal activities (working, buying and hiring) are discussed. Their interdependencies are analyzed in the light of the hypothesis of network or neighborhood effects. The impact of a household's participation in informal markets on its regular consumption is estimated by imputing the probability of its informal activity in the consumption surveys and panels. Such participation does significantly influence more than half of household's expenditure on goods and services. Moreover, the participants of the informal economy distinguish themselves by higher individual full prices (integrating both monetary and non-monetary constraints and resources). |
| Keywords: | Informal economy, consumer behavior, cross-section-panel estimation. |
| JEL: | D12 H26 J49 C31 C32 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:09017&r=tra |
| By: | Nancy Qian |
| Abstract: | Many believe that increasing the quantity of children will lead to a decrease in their quality. This paper exploits plausibly exogenous changes in family size caused by relaxations in China's One Child Policy to estimate the causal effect of family size on school enrollment of the first child. The results show that for one-child families, an additional child significantly increased school enrollment of first-born children by approximately 16 percentage-points. The effect is larger for households where the children are of the same sex. |
| JEL: | I20 J13 O1 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:14973&r=tra |
| By: | Maurer-Fazio, Margaret (Bates College); Hughes, James W. (Bates College); Zhang, Dandan (Australian National University) |
| Abstract: | This paper examines differences in China's ethnic majority and minority patterns of labor force participation and decomposes these differences into treatment and endowment effects using the technique developed by Borooah and Iyer (2005). Population census data are used to estimate gender-separated urban labor force participation rates (lfpr) using logit regressions which control for educational attainment, marital status, pre-school and school-age children, household size, age, and measures of local economic conditions. We focus on six minority groups (Hui, Koreans, Manchu, Mongolians, Uygurs, and Zhuang) and the majority Han. We find sizable differences between the lfpr of urban women of particular ethnic groups and the majority Han. Men's lfpr are very high and exhibit little difference between Han and ethnic minorities. For almost all pair-wise comparisons between Han and minority women, we find that differences in coefficients account for more than 100% of the Han-ethnic difference in labor force participation. Differences in endowments often have substantial effects in reducing this positive Han margin in labor force participation. Roughly speaking, treatment of women's characteristics, whether in the market or socially, tend to increase the Han advantage in labor force participation. The levels of these characteristics on average tend to reduce this Han advantage. |
| Keywords: | China, ethnic minorities, labor force participation, economic reform, population censuses |
| JEL: | J1 J2 J7 O1 O5 P2 |
| Date: | 2009–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp4148&r=tra |
| By: | Karin Mayr; Giovanni Peri |
| Abstract: | Recent empirical evidence seems to show that temporary migration is a widespread phenomenon, especially among highly skilled workers who return to their countries of origin when these begin to grow. This paper develops a simple, tractable overlapping generations model that provides a rationale for return migration and predicts who will migrate and who returns among agents with heterogeneous abilities. The model also incorporates the interaction between the migration decision and schooling: the possibility of migrating, albeit temporarily, to a country with high returns to skills produces positive schooling incentive eects. We use parameter values from the literature and data on return migration to simulate the model for the Eastern-Western European case. We then quantify the eects that increased openness (to migrants) would have on human capital and wages in Eastern Europe. We nd that, for plausible values of the parameters, the possibility of return migration combined with the education incentive channel reverses the brain drain into a signicant brain gain for Eastern Europe. |
| JEL: | F22 J61 O15 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:vie:viennp:0907&r=tra |
| By: | Wioletta Wereda (University of Poldasie); Alina Hagiu (Faculty of Economics of the University of Pitesti) |
| Abstract: | Generally, competitiveness of the economy defines importance of the national economy in the world market. It is a very complex notion assessed by various institutions using different indicators which actually reflect only selected aspects, such as prospects for economic development, technological progress, quality of public institutions, quality of the national business environment, quality of business legislation, level of prices as well as technical infrastructure. |
| Keywords: | competitiveness, performance, development, ranking. |
| JEL: | E00 G18 O5 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:pts:wpaper:e6&r=tra |
| By: | OGAWA Eiji; YOSHIMI Taiyo |
| Abstract: | This paper focuses on recent events which include the RMB reform in China and the global financial crisis to investigate statistically recent diverging trends among East Asian currencies. For the purpose, their weighted average value (Asian Monetary Unit: AMU) and their deviations (AMU Deviation Indicators) from benchmark levels are used to analyze both β and σ convergences of East Asian currencies. Our analytical results show that the monetary authority of China has still kept stabilizing the exchange rate of the Chinese yuan against only the US dollar even though it announced its adoption of a managed floating exchange rate system with reference to a currency. Analytical results on β and σ convergences show that deviations among the East Asian currencies have been diverging in recent years, especially after 2005. The widening deviations reflect not the RMB reform but recent international capital flows and the global financial crisis. In addition, it is important as its background that the monetary authorities of the countries are adopting a variety of exchange rate systems. In other words, a coordination failure in adopting exchange rate systems among these monetary authorities increases volatility and misalignment of intra-regional exchange rates in East Asia. |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:09018&r=tra |
| By: | Gheorghe Savoiu (Faculty of Economics, University of Pitesti) |
| Abstract: | This paper details the two original constructions of price indices made by the author in the last ten years. These constructions are a proposal of centennial price index and an over eighty years old Romanian cost-of-living index. |
| Keywords: | statistical index, interpret index, cost-of-living index (CLI), consumer price index (PCI), harmonized consumer price index (HPCI), Schumpeterian index, centennial index. |
| JEL: | N11 C1 O5 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:pts:wpaper:c1&r=tra |
| By: | Borek Vasicek (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | This paper has three objectives. First, it aims at revealing the logic of interest rate setting pursued by monetary authorities of 12 new EU members. Using estimation of an augmented Taylor rule, we find that this setting was not always consistent with the official monetary policy. Second, we seek to shed light on the inflation process of these countries. To this end, we carry out an estimation of an open economy Philips curve (PC). Our main finding is that inflation rates were not only driven by backward persistency but also held a forward-looking component. Finally, we assess the viability of existing monetary arrangements for price stability. The analysis of the conditional inflation variance obtained from GARCH estimation of PC is used for this purpose. We conclude that inflation targeting is preferable to an exchange rate peg because it allowed decreasing the inflation rate and anchored its volatility. |
| Keywords: | open emerging economies, monetary policy rules, open economy Phillips curve, conditional inflation variance |
| JEL: | E31 E52 E58 P24 |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea0903&r=tra |
| By: | Fuad Aleskerov |
| Abstract: | This paper presents several new approaches to evaluate power distribution in an electoral body. We define the index of consistency of two groups’ positions (briefly, the consistency index) which is used to separate possible coalitions in the Parliament. This allows to analyze power distribution within restricted coalition formations. Then we provide several new power indices for the case in which the intensity of factions to coalesce is taken into account. Our analysis of the power distribution model extends the one proposed by Shapley-Owen. A new consistency index is given allowing to construct such an extension. We illustrate these approaches via the analysis of power distribution among factions in the Russian Parliament (Duma) from 1993 to 2005. |
| Date: | 2008–06 |
| URL: | http://d.repec.org/n?u=RePEc:icr:wpmath:11-2008&r=tra |
| By: | Maria LOREK (labrii, ULCO) |
| Abstract: | Dans cet article, nous nous intéressons à l’étude des conditions de l’émergence d’un milieu innovateur au sein d’un territoire marqué par une crise de l’industrie lourde. Dans le cadre théorique, nous présentons premièrement, le territoire en tant que milieu innovateur et système de production local. Ce dernier présente deux aspects : un aspect matériel du SPL et un aspect immatériel et cognitif du milieu. Le passage d’une logique hiérarchique à une logique horizontale contribue à la restructuration des activités économiques. Partant du principe de la réciprocité, l’innovation est devenue primordiale. Le milieu innovateur apparaît en tant qu’incubateur de l’innovation au sein du système de production local. Deuxièmement, nous mettons l’accent sur le concept des pôles de croissance défendu par François Perroux, et ce, afin de mettre en avant la nouvelle combinaison des relations entre les PME et les grandes entreprises au sein du système de production local. Nous nous focalisons plus particulièrement sur la création de pôles de hautes technologies ainsi que sur leur fonctionnement au sein du SPL. Nous allons utiliser la combinaison de ces concepts théoriques pour analyser la transformation du système de production local de Gdansk (Pologne). Dans le cadre de l’analyse empirique, nous démontrons que l’innovation joue un rôle favorable au développement économique de Gdansk. The aim of this research is to analyze essential conditions for the emergence of the innovative milieu in a territory marked by crisis affecting local heavy industries. Territory is introduced as an innovative milieu and as a local production system (LPS). Then, two aspects are considered: a material one and an immaterial and cognitive one. Moving from hierarchical logic to horizontal logic contributes to understanding and to restructuring economic activities. Within this logic, and based upon the principle of reciprocity, innovation has become essential. The innovative milieu appears as the incubator of innovation in the system of local production. Within this milieu, the concept of growth poles, defended by Francois Perroux, emphasizes the new relationship between SME and big enterprises the system of local production. Emphasis, particularly, is placed upon the creation of high-tech poles and on their functioning in the LPS. This combination of theoretical concepts becomes the basis for analyzing the transformation of the LPS in Gdansk. Innovation plays a major role in the enhancement of Gdansk’s economic development; it is shown, within the framework of the empirical study. |
| Keywords: | Territorial economy, Innovative milieu, Gdansk, System of local production |
| JEL: | R38 O25 P21 |
| Date: | 2008–11 |
| URL: | http://d.repec.org/n?u=RePEc:rii:riidoc:201&r=tra |