nep-tra New Economics Papers
on Transition Economics
Issue of 2011‒04‒30
25 papers chosen by
J. David Brown
Heriot-Watt University

  1. China's Latent Human Capital Investment: Achieving Milestones and Competing for the Top By Constant, Amelie F.; Tien, Bienvenue; Zimmermann, Klaus F.; Meng, Jingzhou
  2. The innovative performance of China's national innovation system By Boeing, Philipp; Sandner, Philipp
  3. Health Insurance Reform and Efficiency of Township Hospitals in rural China: an Analysis from Survey Data By Aurore Pelissier; Martine Audibert; Jacky Mathonnat; Xiao Xian Huang
  4. Inflation and inflation uncertainty: Evidence from two Transition Economies By Ahmad Zubaidi Baharumshah; Akram Hasanov; Stilianos Fountas
  5. Price convergence and market integration in Russia By Konstantin Gluschenko
  6. A 'third culture' in economics? An essay on Smith, Confucius and the rise of China By Herrmann-Pillath, Carsten
  7. Does Health Insurance Decrease Health Expenditure Risk in Developing Countries? The Case of China By Juergen Jung; Jialu Liu
  8. Education in Russia: The evolution of theory and practice By Natalia Kuznetsova; Irina Peaucelle
  9. Foreign Manufacturing Multinationals and the Transformation of the Chinese Economy: New Measurements, New Perspectives By Theodore H. Moran
  10. Risk Management and Managerial Efficiency in Chinese Banks: A Network DEA Framework By Kent Matthews
  11. The emerging aversion to inequality - Evidence from long subjective data By Irena Grosfeld; Claudia Senik
  12. Is Monetary Policy in New Members States Asymmetric? By Borek Vasicek
  13. Advancing adult learning in Eastern Europe and Central Asia By Bodewig, Christian; Hirshleifer, Sarojini
  14. Bank Efficiency in Transitional Countries: Sensitivity to Stochastic Frontier Design By Zuzana Irsova
  15. Chinese sectoral industrial policy shaping international trade and investment patterns - Evidence from the iron and steel industry By in der Heiden, Peter Thomas
  16. The Fight against income evasion in Hungary - Acta Politechnica Hungarica By Dr. Imre Zoltán Nagy
  17. The Mandatory Private Pension Pillar in Hungary: An Obituary By Andr s Simonovits
  18. Money Market Integration and Sovereign CDS Spreads Dynamics in the New EU States By Peter Chobanov; Amine Lahiani; Nikolay Nenovsky
  19. Modeling transition in Central Asia: the Case of Kazakhstan By Gilles DUFRENOT; Adelya OSPANOVA; Alain SAND-ZANTMAN
  20. A case of integration of organic dairy sheep farm in value chains in Bulgaria By Bachev, Hrabrin
  21. Rigidities in Employment Protection and Exporting By Seker, Murat
  22. International Economic Crisis and the Hungarian Pension Reform By Andr s Simonovits
  23. Public Investment and Fiscal Performance in New EU Member States By Jan Hanousek; Evzen Kocenda
  24. Renewable Energy Sources in Romania: A Statistical Approach By Caragea, Nicoleta; Alexandru, Ciprian Antoniade
  25. Календарні закономірності розподілу дохідності та волатильності на українському фондовому ринку By Petrushchak, Bohdan

  1. By: Constant, Amelie F. (DIW DC, George Washington University); Tien, Bienvenue (DIW DC); Zimmermann, Klaus F. (IZA and University of Bonn); Meng, Jingzhou (George Washington University)
    Abstract: In this paper we provide an overview of China’s human capital strategy and educational achievements over the last two decades. While every one acknowledges China as an economic superpower, very few are aware of or realize China’s notable achievements in education as well as its internationalization of education. Since 1978, the landmark for the foundation of the Chinese modern higher education system China has made tremendous strides in education both domestically and internationally. While China maintains 10% growth in GDP, albeit with a GDP per capita at the low level of a developing country, it is also producing serious scholars and a tremendous amount of scholarly output; more and more Chinese students seek higher education abroad; and international students find a rising interest in receiving education in China.
    Keywords: China, human capital, brain drain, higher education
    JEL: F22 J24 N35 O15 O24 O53
    Date: 2011–04
  2. By: Boeing, Philipp; Sandner, Philipp
    Abstract: The objective of this paper is to investigate the innovative performance of China's NIS in international comparison and the capacity of China's NIS in creating indigenous innovation. We provide insights drawing upon patent data and using patent families to determine the value of the underlying invention. For the timeframe we studied, China's comparative advantage exists in the creation of low value innovative performance, albeit increasingly in huge quantities. Constantly rising volumes of patent applications mirror both, the improved protection of intellectual property rights and increasing capacity for inventiveness. Supplemented by the continuous growth of the Chinese economy, improving conditions are reflected and reinforced by more R&D-intense FDI. Foreign firms' innovative performance associated with higher economic value is particularly strong. --
    Keywords: National Innovation System,Innovative Performance,China,Patents,Innovation Policy
    JEL: O53 O47 O34 P27
    Date: 2011
  3. By: Aurore Pelissier (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Martine Audibert (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Jacky Mathonnat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Xiao Xian Huang (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: In the rural health-care organization of China, township hospitals ensure the delivery of basic medical services. Particularly damaged by the economic reforms implemented from 1975 to the end of the 1990s, township hospitals efficiency is questioned, mainly with the implementation since 2003 of the reform of health insurance in rural areas. From a database of 24 randomly selected township hospitals observed over the period 2000-2008 in Weifang prefecture (Shandong), the study examines the efficiency of township hospitals through a two-stage approach and the calculation of the Malmquist index. As curative and preventive medical services delivered at township hospital level use different production processes, two data envelopment analysis models are estimated with different orientation chosen to compute scores. Following Simar and Wilson (2007), as the traditional two-stage methodology is not relevant, we used a double bootstrap strategy. Results show that technical efficiency declines over time. Moreover, township hospitals are less efficient in the production of preventive services than in the production of curative ones. Several variables explained efficiency (township hospitals' and environment's characteristics) but our results suggest that in the context of China, the efficiency of township hospitals is also influenced by unobservable factors.
    Keywords: data envelopment analysis;Technical efficiency;Double bootstrapping;China;New Rural Cooperative Medical Scheme;Township Hospitals
    Date: 2011–04–21
  4. By: Ahmad Zubaidi Baharumshah (Department of Economics, Universiti Putra Malaysia); Akram Hasanov (Department of Economics, Universiti Putra Malaysia); Stilianos Fountas (Department of Economics, University of Macedonia)
    Abstract: This paper examines the causal link between inflation and inflation uncertainty for the transition economies of Russia and Ukraine. The Iterated Cumulative Sums of Squares Exponential Generalized Autoregressive Conditional Heteroskedasticity (ICSS-EGARCH-M-t) models that allow for asymmetry and regime shifts in the variance of inflation are employed to establish the inflation-inflation uncertainty causal relationship. We find three breaks in the inflation volatility series that coincide with the major historical events in these two countries. The empirical results reveal strong support of the Friedman-Ball hypothesis in both countries. Additionally, we discover that the reverse causal relation between inflation and inflation uncertainty as predicted by the Holland hypothesis holds in Ukraine, but this stabilization policy behavior does not seem to prevail in Russia.
    Keywords: transition economies, inflation, inflation uncertainty, ICSS-EGARCH-t.
    JEL: I20 I23
    Date: 2011–04
  5. By: Konstantin Gluschenko
    Abstract: After a period of growing disconnectedness of regional markets following the 1992 price liberalization in Russia, a process of improvement in market integration started since about 1994. This paper analyzes the spatial pattern of goods market integration in the country in 1994-2000, characterizing Russian regions into three states: integrated with a benchmark region, not integrated but tending toward integration with it, and not integrated and not tending toward integration. The standard AR(1) model serves to test for market integration. To capture a movement toward integration (price convergence), a nonlinear time series model with an asymptotically decaying trend is proposed. The results obtained suggest that only a bit more than one fifth of the Russian regions can be deemed not integrated and not tending toward integration with the benchmarkregion over 1994–2000.
    Keywords: Law of one price, Price dispersion, Non-linear trend, Russian regions.
    JEL: C32 P22 R10 R15
    Date: 2010–09–01
  6. By: Herrmann-Pillath, Carsten
    Abstract: China's rise drives a growing impact of China on economics. So far, this mainly works via the force of example, but there is also an emerging role of Chinese thinking in economics. This paper raises the question how far Chinese perspectives can affect certain foundational principles in economics, such as the assumptions on individualism and self-interest allegedly originating in Adam Smith. I embark on sketching a 'third culture' in economics, employing a notion from cross-cultural communication theory, which starts out from the observation that the Chinese model was already influential during the European enlightenment, especially on physiocracy, suggesting a particular conceptualization of the relation between good government and a liberal market economy. I relate this observation with the current revisionist view on China's economic history which has revealed the strong role of markets in the context of informal institutions, and thereby explains the strong performance of the Chinese economy in pre-industrial times. I sketch the cultural legacy of this pattern for traditional Chinese conceptions of social interaction and behavior, which are still strong in rural society until today. These different strands of argument are woven together in a comparison between Confucian thinking and Adam Smith, especially with regard to the 'Theory of Moral Sentiments', which ends up in identifying a number of conceptual family resemblances between the two. I conclude with sketching a 'third culture' in economics in which moral aspects of economic action loom large, as well as contextualized thinking in economic policies. --
    Keywords: Confucianism,Adam Smith,physiocracy,collectivism and individualism,social relations in China,morality,economy of Imperial China
    JEL: B11 B12 Z1
    Date: 2011
  7. By: Juergen Jung (Department of Economics, Towson University); Jialu Liu (Department of Economics, Allegheny College)
    Abstract: We make use of panel data from the China Health and Nutrition Survey between 1991 and 2006 to investigate whether health insurance increases out-of-pocket (OOP) health expenditure risk. We find that health insurance increases the probability of catastrophic OOP health expenditures using a series of Probit models. We then use two-part as well as sample selection models to account for selection on unobservable variables and find that although the probability of positive OOP health expenditures increases with the availability of health insurance, the actual level of OOP health expenditures decreases. More specifically, we find that for a per- son with positive OOP health expenditures, having health insurance reduces the level of OOP expenses by 12.56 percent while controlling for selection effects.
    Keywords: health insurance, exposure to health risk, health care in China, out-of-pocket health expenditure in China, two-part model, bivariate sample selection model, Heckman two- step estimator, China Health and Nutrition Survey (CHNS).
    JEL: I11 C33 C34
    Date: 2011–04
  8. By: Natalia Kuznetsova (Saint-Petersburg State University - Saint-Petersburg State University); Irina Peaucelle (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: This article investigates the relationships between the evolution of Russian social psychology and the transformations of the modes of education in Russia. Social psychology is a science born the last century and also a status of the social conscience of people, forged historically on the basis of proper cultural artifacts. In Russia education is mainly the process of human development and, like wherever, it is the institution of knowledge transmission. We show on the case of Russian history that the scientifically proven educational practice can contribute enriching development of social conscience after ideological and economic shocks.
    Keywords: analysis of education ; cultural economics ; Russia
    Date: 2011–04–18
  9. By: Theodore H. Moran (Georgetown University)
    Abstract: What is the relationship between foreign manufacturing multinational corporations (MNCs) and the expansion of indigenous technological and managerial technological capabilities among Chinese firms? China has been remarkably successful in designing industrial policies, joint venture requirements, and technology transfer pressures to use FDI to create indigenous national champions in a handful of prominent sectors: high speed rail transport, information technology, auto assembly, and an emerging civil aviation sector. But what is striking in the aggregate data is how relatively thin the layer of horizontal and vertical spillovers from foreign manufacturing multinationals to indigenous Chinese firms has proven to be. Despite the large size of manufacturing FDI inflows, the impact of multinational corporate investment in China has been largely confined to building plants that incorporate capital, technology, and managerial expertise controlled by the foreigner. As the skill-intensity of exports increases, the percentage of the value of the final product that derives from imported components rises sharply. China has remained a low value-added assembler of more sophisticated inputs imported from abroad--a “workbench” economy. Where do the gains from FDI in China end up? While manufacturing MNCs may build plants in China, the largest impact from deployment of worldwide earnings is to bolster production, employment, R&D, and local purchases in their home markets. For the United States the most recent data show that US-headquartered MNCs have 70 percent of their operations, make 89 percent of their purchases, spend 87 percent of their R&D dollars, and locate more than half of their workforce within the US economy--this is where most of the earnings from FDI in China are delivered.
    Keywords: Foreign Direct Investment, International Investment, China, Multinational Corporations, Exports
    JEL: F10 F21 F23 F52 L32 L52 L60 L62 L63 L64 O10 O14 O25 O30 O53
    Date: 2011–04
  10. By: Kent Matthews (Cardiff University and Hong Kong Institute for Monetary Research)
    Abstract: Risk Management in Chinese banks has traditionally been the Cinderella of its internal functions. Political stricture and developmental imperative have often overridden standard practice of risk management resulting in large non-performing loan (NPL) ratios. One of the stated aims of opening up the Chinese banks to foreign strategic investment is the development of risk management functions. In recent years NPL ratios have declined through a mixture of recovery, asset management operation and expanded balance sheets. However, the training and practice of risk managers remain second class compared with foreign banks operating in China. This paper evaluates bank performance using a Network DEA approach where an index of risk management practice and an index of risk management organisation are used as intermediate inputs in the production process. The two indices are constructed from a survey of risk managers in domestic banks and foreign banks operating in China. The use of network DEA can aid the manager in identifying the stages of production that need attention.
    Keywords: Risk Management, Risk Organisation, Managerial Efficiency, Network DEA
    JEL: D23 G21 G28
    Date: 2011–03
  11. By: Irena Grosfeld (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris); Claudia Senik (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris, PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - Ecole Normale Supérieure de Paris - ENS Paris, Université Paris-Sorbonne - Ministère de l'Education nationale, de l'Enseignement supérieur et de la Recherche)
    Abstract: This paper provides evidence of a change in the relationship between individual satisfaction with the state of country's economy and income inequality during transition from a command to market economic system. Using data from a series of extensive and frequent surveys of Polish population, we identify a structural break in this relationship. In the beginning of transition, an increase in income inequality is interpreted by population as a positive signal of increased opportunities; this sentiment is particularly strong among older people and people with right-wing political views. Later in the transition period, increased inequality becomes an important reason for dissatisfaction of the public with the country's economic situation and reforms, as people become more skeptical about the legitimacy of income generation process. We also provide direct evidence from opinion polls of a change in the public sentiment about income inequality.
    Keywords: inequality ; subjective well-being ; growth ; breakpoint ; transition
    Date: 2011–04–18
  12. By: Borek Vasicek
    Abstract: Estimated Taylor rules became popular as a description of monetary policy conduct. There are numerous reasons why real monetary policy can be asymmetric and estimated Taylor rule nonlinear. This paper tests whether monetary policy can be described as asymmetric in three new European Union (EU) members (the Czech Republic, Hungary and Poland), which apply an inflation targeting regime. Two different empirical frameworks are used: (i) a Generalized Method of Moments (GMM) estimation of models that allow discrimination between the sources of potential policy asymmetry but are conditioned by specific underlying relations (Dolado et al., 2004, 2005; Surico, 2007a,b); and (ii) a flexible framework of sample splitting where nonlinearity enters via a threshold variable and monetary policy is allowed to switch between regimes (Hansen, 2000; Caner and Hansen, 2004). We find generally little evidence for asymmetric policy driven by nonlinearities in economic systems, some evidence for asymmetric preferences and some interesting evidence on policy switches driven by the intensity of financial distress in the economy.
    Keywords: monetary policy, inflation targeting, nonlinear Taylor rules, threshold estimation
    JEL: C32 E52 E58
    Date: 2010–12–01
  13. By: Bodewig, Christian; Hirshleifer, Sarojini
    Abstract: This report presents available evidence on adult education and training in Europe and Central Asia (ECA), differentiating two separate types: continuing vocational education and training (CVET) for the employed, sought either by employers or individuals, and retraining and second chance education for the non?employed. This paper presents available evidence on the extent and patterns of lifelong learning in ECA. It argues that advancing adult education and training in ECA is important not only to meet the new skills demands but also to respond to a rapidly worsening demographic outlook across most of the region. While it is not equally important for all ECA countries, adult education and training should be high on the agenda of those ECA economies that are closest to the technological frontier and facing a demographic decline, such as the new European Union (EU) member States and Russia. The paper lays out a framework for government action to advance adult learning in ECA through a mix consisting of policy coordination between government and the enterprise sector, a sound regulatory regime and appropriate financial incentives.
    Keywords: Access&Equity in Basic Education,Education For All,Primary Education,Teaching and Learning,Gender and Education
    Date: 2011–04–01
  14. By: Zuzana Irsova
    Abstract: This article provides an empirical insight on the heterogeneity in the estimates of banking efficiency produced by the stochastic frontier ap- proach. Using data from five countries of Central and Eastern Europe, we study the sensitivity of the efficiency score and the efficiency ranking to a change in the design of the frontier. We found that the average scores are significantly smaller when the transcendental logarithmic functional form is used in the profit efficiency measurement and when the scaling effect is neglected in the cost efficiency measurement. The implied bank ranking is robust to changes in the stochastic frontier definition for cost efficiency, but not for profit efficiency.
    Keywords: Banking, Eciency Analysis, Stochastic Frontier Approach, Transitional Countries
    JEL: C13 G21 L25
    Date: 2010–09–01
  15. By: in der Heiden, Peter Thomas
    Abstract: In the three decades since China's economic opening to the world, the country's integration into the global economy has progressed by leaps and bounds. Especially after joining the WTO in 2001, international trade and investment flows have been on a steep upward trajectory. This process was not only driven by market forces but heavily influenced by government intervention in commodity and financial markets. While government authorities are strongly determined to promote closer economic integration with the rest of the world, they seek to supervise and control the process in order to carve out maximum benefits for domestic enterprises and the economy as a whole. Balancing market forces and industrial policy strategy, political decision makers have worked out an elaborate framework of measures to create an environment conducive to the development of several sectors deemed backbone or pillar industries. As one of them, the steel industry is subjected to numerous measures steering its development both in the home market and at the global market interface. By examining these mechanisms, this article aims to illustrate that sectoral industrial policy in China does not push for expanding exports and investments across the board but carefully and discretionarily promotes global integration in some areas while delaying it in others. --
    Keywords: Economic integration,industrial policy,trade policy,trade restrictions,foreign direct investment,steel industry
    Date: 2011
  16. By: Dr. Imre Zoltán Nagy (Óbuda University)
    Abstract: The evasion of income causes the national budget of Hungary great damage. Just the partial prevention of it would benefit greatly to the state balance and the realization of the economic policy in Hungary. Repelling income evasion can only be achieved by various means. These are the following: To identify and abolish its reasons and causes; to post strict regularizations consistent with the EU legislation; to close legal gaps; not to concentrate onpenalties; to reduce high taxes and the exorbitant income centralization of the state; to take the moral education for serious as well as the legal harmonization and effect analysis for the various decisions.
    Date: 2011
  17. By: Andr s Simonovits (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: In 1998, the left-of-center government of Hungary carved out a second pillar mandatory private pension system from the original mono-pillar public system. Participation in the mixed system was optional for those who were already working, but mandatory for new entrants to the workforce. About 50 per cent of the workforce joined voluntarily and another 25 per cent were mandated to do so by law between 1999 and 2010. The private system has not produced miracles: either in terms of the financial stability of the social security system, or greatly improved social security in old age. Moreover, the international financial and economic crisis has highlighted the transition costs of pre-funding. Rather than rationalizing the system, the current conservative government de facto "nationalized" the second pillar in 2011 and is to use part of the released capital to compensate for tax reductions.
    Keywords: social security reform, old age risk, defined contribution plan, privatization, political aspect, Hungary
    JEL: H55 J26
    Date: 2011–03
  18. By: Peter Chobanov; Amine Lahiani; Nikolay Nenovsky
    Abstract: When the first phase of the crisis focused primarily on the interbank market volatility, the second phase spread on the instability of public finance. Although the overall stance of public finances of the new members is better than the old member countries, the differences within the new group are significant (from the performer Estonia to the laggard Hungary). Sovereign CDS spreads have become major variables focused on risks and expectations about the fiscal situation of different countries. In the paper we investigate, first, whether there is a link in the new member states (NMS) between the expectations about the condition of their public finances and the dynamics of money markets,including integration of national money markets with the euro area.....Our study confirm that the strong link between monetary and public finance risk as apart of total systemic risk increase during the crisis especially for currency boards regimes, when the link becomes stronger and pronounced. For the inflation targeting countries the link became weaker and less pronounced.
    Keywords: money markets, sovereign CDS spreads, EU enlargement, monetary regimes, financial crisis
    JEL: E43 G10 P20 F31 F34
    Date: 2010–10–01
  19. By: Gilles DUFRENOT; Adelya OSPANOVA; Alain SAND-ZANTMAN
    Abstract: This paper presents a small macro-econometric model of Kazakhstan to study the impact of various economic policies. It uses a new approach to test the existence of a level relationship between a dependent variable and a set of regressors, when the characteristics of the regressors’ non-stationarity are not known with certainty. The simulations provide insights into the role of a tight monetary policy, higher foreign direct investment, and rises in nominal wages and in crude oil prices. The results obtained are in line with economic observations and give some support to the policies chosen as priority targets by the Kazakh authorities for the forthcoming years.
    Keywords: Simulation, Forecasting, Transition, Stabilization, Central Asian
    JEL: E17 F47 O53 P39
    Date: 2010–10–01
  20. By: Bachev, Hrabrin
    Abstract: This paper presents the state of integration of small scale dairy farms in value chains in Bulgaria and a case study on organic farming as a new prospective approach for market inclusion. It outlines the evolution of dairy sheep farming and organic production; analyzes the pace, factors and impacts of development of a successful organic dairy sheep farm from North-West Bulgaria; specifies driving factors and prospects of small-scale organic farming development; assesses possibilities for replication of positive experience in other farms, and suggests recommendations for improvement of public policies and farming strategies.
    Keywords: farmers inclusion; supply-chain management; organic farming; dairy farming; Bulgaria
    JEL: Q1 Q13 Q12 Q14 Q18
    Date: 2010–12–01
  21. By: Seker, Murat
    Abstract: There have been significant improvements in traditional trade policies in the past few decades. However, these improvements can only be fully effective when they are complemented with a favorable investment climate. This study focuses on a particular aspect of investment climate, namely labor regulations, and shows how these regulations can be discouraging from exporting. Using firm level data from 26 countries in Eastern Europe and Central Asia region, the paper empirically shows that firms that cannot create new jobs due to stringent labor regulations are less likely to export. Firms that plan to export expand their sizes before they start to export. However the rigidities in labor markets make this adjustment process costly. Higher costs of employment decrease operating profits and lead to a higher productivity threshold level required for entering export markets. As a result, a smaller fraction of firms can afford to export.
    Keywords: Exporting; firm heterogeneity; labor regulations; developing countries; Eastern Europe and Central Asia region
    JEL: F16 F12 F14 J23
    Date: 2010–04
  22. By: Andr s Simonovits (Institute of Economics - Hungarian Academy of Sciences)
    Abstract: By 2008, the Hungarian pension system has become too generous and the implied contribution rate hindered growth. When the international economic and financial crisis deprived Hungary from normal credits, its government turned to international organizations for help. The most spectacular element of the conditions attached to the bail-out package was the short and long-run reduction of pension benefits. Within months, the Hungarian government eliminated the unsustainable 13th month benefit, reduced health-insurance contribution rates, replaced wage-price indexation with price indexation and worked out a drastic rise in the normal retirement age in the medium-run. The newly elected conservative party has practically closed the second pillar and plans to use up the released capital to reduce the government deficit, debt and finance public expenditures.
    Keywords: international economic crisis, Hungary, pension reform
    JEL: F34 H55
    Date: 2011–02
  23. By: Jan Hanousek; Evzen Kocenda
    Abstract: In this paper we analyze the dynamics of public investment and public finance in new members of the European Union, and also how these sectors were affected by changes in economic freedom and corruption. When we assess the role of regulation and corruption on public investment, we find that improvements in economic freedom tend to be associated with decreases in public investment, while reductions in corruption produce effects going in both directions. Similarly, we show that increases in public investment are often linked with decreases as well as increases in corruption. In terms of public finance we detect mostly improvement in debt when there is less economic regulation, while results for a deficit are less conclusive. On the other hand, improvements in the corruption environment are mostly associated with decreases in the deficit as well as debt. As a general rule that follows from our results, steps aimed at reducing corruption and the degree of economic regulation should lead towards improvements in the fiscal position in most of the new EU countries.
    Keywords: public finance, public investment, economic freedom, corruption, EU convergence and integration, macroeconomic policy, fiscal reforms, new EU members
    JEL: E61 E62 F42 H50 H60 O11
    Date: 2010–12–01
  24. By: Caragea, Nicoleta; Alexandru, Ciprian Antoniade
    Abstract: Biodiversity is in decline globally and major ecosystems are placed under increasing pressure. Global poverty persists; the Millennium Development Goals would need major efforts to be achieved. This paper will explore the perspective for a new energy sector economy in relation to climate change and the sustainable development objectives. All renewable energy technologies are not appropriate to all applications or locations, however. This paper identifies some of the key environmental and economic benefits associated with renewable technologies. It is also analyzed in a comparative manner the current situation of energy from renewable sources in Romania and the EU Member States.
    Keywords: renewable energy; global warming; hydrogen economy; energy production
    JEL: C10 Q01 Q20
    Date: 2010–09–30
  25. By: Petrushchak, Bohdan
    Abstract: The theoretical aspects of calendar effects and anomalies on the Ukrainian stock market and the empirical evidences of monthly returns and volatility of PFTS-index are examined. A strong evidence of a calendar effect i.e. December effect on Ukrainian PFTS exchange was found. It can be explained due to the cyclical character of some industries, cyclical shares, calendar character of exchange rate fluctuations and self-fulfilling prophecies of investors.
    Keywords: Calendar effects; December effect; stock market anomalies; volatility and rate of return of PFTS-Index; self-fulfilling prophecies; cyclical shares; Календарні ефекти та аномалії фондового ринку; ефект Грудня; дохідність та волатильність індексу ПФТС; передбаченння; які самореалізуються; циклічні акції;
    JEL: G14 D84 G11 G15 G00
    Date: 2011

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