nep-tra New Economics Papers
on Transition Economics
Issue of 2011‒07‒13
29 papers chosen by
J. David Brown
Heriot-Watt University

  1. Recent Dynamics of Returns to Education in Transition Countries By Tom Coupe; Hanna Vakhitova
  2. Did Growth and Reforms Increase Citizens’ Support for the Transition? By R. Golinelli; R. Rovelli
  3. Does health Matter for Inequality in Transition Countries: The Case of Ukraine By Tamara Podvysotskaya; Elena Osinkina; Larysa Krasnikova; Yuriy Podvysotskiy
  4. An analysis of income polarization in rural and urban China By Céline BONNEFOND (GREThA, CNRS, UMR5113); Matthieu CLEMENT (GREThA, CNRS, UMR5113)
  5. Russian Inequality on the Eve of Revolution By Steven Nafziger; Peter Lindert
  6. Mind the gaps: a political economy of the multiple dimensions of China’s rural–urban divide By Xiaobing Wang; Jenifer Piesse; Nick Weaver
  7. Trade integration,restructuring and global imbalances --A tale of two countries By Teng, Faxin; Meier , Claudia; Kamenev, Dmitry; Klein, Martin
  8. Inequality, Growth and Public Spending in Central, East and Southeast Europe By Mario Holzner
  9. Beating the Random Walk in Central and Eastern Europe by Survey Forecasts By Anna Naszódi
  10. Micro-Perspectives on Living Standards in Nineteenth-Century Russia By Tracy Dennison; Steven Nafziger
  11. Self-Employment of Rural-to-Urban Migrants in China By Giulietti, Corrado; Ning, Guangjie; Zimmermann, Klaus F.
  12. Sources of Income Inequality: Empirical Evidence from Bulgaria By Vesselin Mintchev; Venelin Boshnakov; Alexander Naydenov
  13. Big BRICs, Weak Foundations: The Beginning of Public Elementary Education in Brazil, Russia, India, and China By Steven Nafziger; Latika Chaudhary; Aldo Musacchio; Se Yan
  14. China: A Sleeping Giant of Temporary Trade Barriers? By Chandra, Piyush
  15. Measuring Inequality in CIS Countries: Theory and Empirics By Marat Ibragimov; Rustam Ibragimov; Rufat Khamidov
  16. Agglomeration Economies and Local Comovement of Stock Returns By Fu, Shihe; Shan, Liwei
  17. China’s Trade in Asia and the World: Long run Relation with Short run Dynamics By Dinda, Soumyananda
  18. A Matter of Time: Revisiting Growth Convergence in Developing Countries By Andersson, Fredrik N. G.; Edgerton, David; Opper, Sonja
  19. The Persistence Characteristics of Output Growth in China: How Important is the Business Cycle? By James Laurenceson
  20. The Role of Investment Incentives in Regional FDI Reallocation: A Regression-Discontinuity Approach By Marian Dinga
  21. Wage Differences between the Private and the Public Sector in Serbia: Some Evidence from Survey Data By Kosovka Ognjenovic
  23. Economic conditions of stepfamilies from a cross-national perspective By Michaela Kreyenfeld; Valerie Martin
  24. Multidimensional Deprivation in China, India and Vietnam: A Comparative Study on Micro Data By Ranjan Ray; Kompal Sinha
  25. Business cycle synchronisation between the V4 countries and the euro area By Michal Bencik
  26. Determinants of Inequality in Selected SEE Countries: Results from Shapley Value Decompositions By Sebastian Leitner; Robert Stehrer
  27. Income Inequality and Social Policy in Serbia By Olgica Ivančev; Milena Jovičić; Tijana Milojević
  28. What Caused the Recent Boom-And-Bust Cycle in Lithuania? Evidence from a Macromodel with the Financial Sector By Tomas Ramanauskas
  29. Holding together or falling apart:Results of gravity equation of the CIS trade By Kurmanalieva, Elvira; Vinokurov, Evgeny

  1. By: Tom Coupe (Kyiv School of Economics, Kyiv Economic Institute); Hanna Vakhitova (Kyiv School of Economics, Kyiv Economic Institute)
    Abstract: This study provides recent estimates of returns to education in transition countries, investigating how the economic boom in the region has affected these returns. We find that transition countries continue to have relatively low returns to education and that the economic boom did not lead to a clear change in these returns. A more detailed investigation for one specific country, Ukraine, confirms these results.
    Keywords: returns to education, transition countries
    JEL: J24 J31 P2 P3 P5
    Date: 2011–06
  2. By: R. Golinelli; R. Rovelli
    Abstract: How did post-communist transformations affect people’s perceptions of their economic and political systems? We model a pseudo-panel with 89 country-year clusters, based on 13 countries observed between 1991 and 2004, to identify the macro and institutional drivers of the public opinion. Our main findings are: (i) When the economy is growing, on average people appreciate more extensive reforms; they dislike unbalanced reforms. (ii) Worsening of income distribution and higher inflation interact with an increasing share of the private sector in aggravating nostalgia for the past regime. (iii) Cross-country differences in the attitudes towards the present and future (both in the economic and political dimensions) are largely explained by differences in the institutional indicators for the rule of law and corruption. (iv) Cross-country differences in the extent of nostalgia towards the past are mainly related to differences in the deterioration of standards of living.
    JEL: O11 O57 P2 P36 P27
    Date: 2011–07
  3. By: Tamara Podvysotskaya; Elena Osinkina; Larysa Krasnikova; Yuriy Podvysotskiy
    Abstract: Significant deterioration in health and income inequality in Ukraine as well as in other CIS countries during the early transition motivated us to investigate the relationship between the two categories. Based on both macro- and micro-data analysis we focused on how different aspects of health affect income inequality in Ukraine. Significant impact of health has been proven on both micro- and macro levels. According to macrolevel results, a 1% increase in life expectancy leads to a 2,1% decrease in income inequality as measured by index Gini. Micro-level research also evidenced significance of different health aspects for income inequality.
    Keywords: Income inequality, health, Ukraine, Ukrainian Longitudinal Monitoring Survey
    Date: 2011–01
  4. By: Céline BONNEFOND (GREThA, CNRS, UMR5113); Matthieu CLEMENT (GREThA, CNRS, UMR5113)
    Abstract: The purpose of this article is to contribute to the analysis of Chinese income inequality by focusing more specifically on income polarization, which captures both alienation (i.e. heterogeneity between income groups) and identification (i.e. homogeneity within groups). The empirical investigations conducted as part of this research are based on the China Health and Nutrition Survey data from 1989 to 2006 and indicate that Chinese household income is strongly polarized. After a period of stagnation between 1989 and 1997, the degree of polarization increased significantly between 1997 and 2006, indicating the constitution of identified groups in middle and upper income ranges. Although the level of income polarization is higher in rural areas, the increase in polarization is far more conspicuous in urban areas, suggesting that the risk of social tensions is more pregnant in Chinese cities. The analysis of the sources of income polarization in rural areas shows that the increase in polarization is closely linked to non agricultural opportunities. In urban areas, the emergence of identified groups in middle and upper income classes can be explained both by the sharp decline in subsidies and by the liberalization of the urban labor market and state enterprises.
    Keywords: inequality, polarization, kernel density, China
    JEL: D31 D63 O15 P36 R20
    Date: 2011
  5. By: Steven Nafziger (Williams College); Peter Lindert (University of California-Davis)
    Abstract: Just how unequal were the incomes of different classes of Russians on the eve of Revolution, relative to other countries, to Russia’s earlier history, and to Russia’s income distribution today? Careful weighing of an eclectic data set provides provisional answers. In 1904, on the eve of military defeat and the 1905 Revolution, Russian income inequality was middling by the standards of that era, and less severe than inequality has become today in such countries as China, the United States, and Russia itself. We enrich this emerging story by noting some distinctive fiscal and relative-price features of Imperial Russia. We hope that this report sets the stage for comparisons to Russian before the serf Emancipation of 1861.
    Keywords: Russia, inequality, economic history
    JEL: N30 N33 O15
    Date: 2011–03
  6. By: Xiaobing Wang; Jenifer Piesse; Nick Weaver
    Abstract: China’s impressive growth has been accompanied by increasing inequality and a widening rural– urban divide. This paper identifies and examines nine major dimensions of this divide: income, consumption, education, healthcare, employment, child care, pensions, access to public services and environment. The paper attributes the main causes of the rural–urban divide to China’s development strategy and the associated regressive tax and subsidies policies. This paper is among the first to evaluate and decompose the rural–urban divide into multiple dimensions or gaps, and highlights the severe constraints on the Chinese peasantry. It discuses the policy and welfare implications of the rural–urban divide. It argues that the large size of the rural–urban divide was mainly due to inequality in opportunities and the lack of social provision of public goods in rural areas. The removal of discriminatory policies, including the provision of such public goods, will lead to greater equality of opportunity and a reduced gap. Increased equality and efficiency can be achieved simultaneously.
    Date: 2011
  7. By: Teng, Faxin; Meier , Claudia; Kamenev, Dmitry; Klein, Martin
    Abstract: China is widely seen as one of the sources of global macroeconomic imbalances. Its persistent current account surplus and capital exports to the United States are even cited as one of the causes of the global financial crisis. The most common explanation traces China's current account surplus to a mismatch between saving and investment due to inefficiently low domestic demand. We challenge this explanation. Our argument rests on an analogy that we construct between two countries generally thought to be very different: Russia and China. Russia, a raw materials exporting country, has been running current account surpluses similar to China's in relation to GDP. As for most raw materials exporting countries this is considered normal, reflecting efficient reinvestment of wealth from natural resources in financial assets. We show that a similar efficiency argument can be constructed for China, although the nature of wealth that is reinvested in financial assets is different in the two countries. Our analysis implies that China's current account surpluses can be expected to disappear over the long horizon – although the time when this will happen may still be very far away. Moreover, an appreciation of the Chinese currency may not have the desired effect of mitigating the country's current account surplus as a weakening in competitiveness is counterbalanced by a strengthening of investment motives.
    Keywords: trade structures;trade imbalances; current account imbalances; outside assets
    JEL: F14
    Date: 2011–06
  8. By: Mario Holzner (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: The article analyses the joint determinants of inequality and growth with a special emphasis on public spending structures in transition. The mutual benefit of low real interest rates, to both equity and economic development is a major result of this paper. In terms of public spending items we find a positive correlation with equity and a negative with growth as several of the government expenditure items seem to act counter-cyclically. In the late 1990’s and early 2000’s the European integration process allowed most of the transition economies to aim for the best of both worlds: equity and economic development.
    Keywords: Inequality, Government Expenditures, Economic Growth, Transition
    JEL: D63 H5 O4 P2
    Date: 2010–10
  9. By: Anna Naszódi (Magyar Nemzeti Bank (central bank of Hungary))
    Abstract: This paper investigates the forecasting ability of survey data on exchange rate expectations with multiple forecast horizons. The survey forecasts are on the exchange rates of five Central and Eastern European currencies: Czech Koruna, Hungarian Forint, Polish Zloty, Romanian Leu and Slovakian Koruna. First, different term-structure models are fitted on the survey forecasts. Then, the forecasting performances of the fitted forecasts are compared. The fitted forecasts for the 5 months horizon and beyond are proved to be significantly better than the random walk on the pooled data of the five currencies. The best performing term-structure model is the one that assumes an exponential relationship between the forecast and the forecast horizon, and has time-varying parameters.
    Keywords: evaluating forecasts, exchange rate, survey forecast, time-varying parameter, term-structure of forecasts
    JEL: F31 F36 G13
    Date: 2011
  10. By: Tracy Dennison (California Institute of Technology); Steven Nafziger (Williams College)
    Abstract: In recent years economic historians have turned new attention to questions about standards of living in pre-revolutionary Russia. However, most of the studies to date have focused on a narrow range of measures for predominantly urban areas. We expand on the existing literature with a micro-level analysis, which employs a broader set of measures of wellbeing for a small rural region in central Russia. Our findings suggest that living standards were improving over the nineteenth century, even in such seemingly less dynamic rural areas. Income and consumption patterns, human capital development, and the distribution of resources in the countryside were more variegated than a ‘subsistence’ approach has typically allowed. The micro-level context presented here suggests that state and local institutions should be emphasized in future analyses of rural living standards in pre-Soviet Russia.
    Keywords: Russia, livings standards, economic history
    JEL: N33 N93 O12
    Date: 2011–06
  11. By: Giulietti, Corrado (IZA); Ning, Guangjie (Nankai University); Zimmermann, Klaus F. (IZA and University of Bonn)
    Abstract: This paper focuses on the determinants of self-employment among rural to urban migrants in China. Two self-selection mechanisms are analysed: the first relates to the manner in which migrants choose self-employment or paid work based on the potential gains from either type of employment; the second takes into account that the determinants of the migration decision can be correlated with employment choices. Using data from the 2008 Rural-Urban Migration in China and Indonesia (RUMiCI) survey, a selection model with endogenous switching is estimated. Earnings estimates are then used to derive the wage differential, which in turn is used to model the employment choice. The procedure is extended to account for migration selectivity and to compare individuals with different migration background and employment histories. The results indicate that self-employed individuals are positively selected with respect to their unobserved characteristics. Furthermore, the wage differential is found to be an important driver of the self-employment choice.
    Keywords: self-employment, wages, rural to urban migration, selection bias magnets, European Union
    JEL: J23 J61 O15
    Date: 2011–06
  12. By: Vesselin Mintchev; Venelin Boshnakov; Alexander Naydenov
    Abstract: The paper contributes to the empirical research on the micro-determinants of income inequality in Southeast European transition countries. The analysis utilizes data from a representative survey of 3,300 Bulgarian households conducted in 2007 and quantifies income differentiation effects related to certain socio-demographic characteristics. Quantile regression analysis reveals positive net effects of the degree of urbanization and the number of employed in the household as well as negative effects of the number of unemployed, children, and pensioners on the per-capita income level at all parts of the income distribution. Inequality indices decomposition by subgroups identifies the type of settlement, ethnical group, the number of children and unemployed as substantial sources of income inequality in Bulgaria.
    Date: 2011–01
  13. By: Steven Nafziger (Williams College); Latika Chaudhary (Scripps College); Aldo Musacchio (Harvard Business School); Se Yan (Peking University)
    Abstract: Our paper provides a comparative perspective on the development of public primary education in four of the largest developing economies circa 1910: Brazil, Russia, India and China (BRIC). These four countries encompassed more than 50 percent of the world’s population in 1910, but remarkably few of their citizens attended any school by the early 20th century. We present new, comparable data on school inputs and outputs for BRIC drawn from contemporary surveys and government documents. Recent studies emphasize the importance of political decentralization, and relatively broad political voice for the early spread of public primary education in developed economies. We identify the former and the lack of the latter to be important in the context of BRIC, but we also outline how other factors such as factor endowments, colonialism, serfdom, and, especially, the characteristics of the political and economic elite help explain the low achievement levels of these four countries and the incredible amount of heterogeneity within each of them.
    Keywords: Brazil, Russia, India, China, economic history, education, political economy, elites
    JEL: N30 O15 I22 I28
    Date: 2011–06
  14. By: Chandra, Piyush (Department of Economics, Colgate University)
    Abstract: While tariff rates around the world have decreased during the last five decades, there has been an increase in other instruments of protectionism – in particular, antidumping (AD), countervailing duties (CVD) and global safeguards (SG) - collectively, temporary trade barriers (TTBs). In this paper, we examine China’s use of these TTBs both before and during the 2008-9 crisis in order to identify underlying historical trends and explore potential changes in their use over time. While the flow of new AD investigations increased during the crisis, China’s total stock of imports subject to AD measures decreased in terms of both count and value. Despite this decrease in the stock of imports subject to AD, we find a number of worrying trends. An increase in the flow of AD investigations during the crisis was a reversal of the trend from last five years. Second, prior to the crisis, almost all of China’s AD use was confined to only five Harmonized System (HS) sectors, however, during the crisis, some new AD investigations were in sectors that had never participated in AD earlier. In addition, a large number of China’s AD measures have lasted for longer than five years. At the end of 2009, only 40% of the AD cases imposed five or more years ago have been removed. However, not all news is bad. The size of the ad valorem AD duty has decreased in recent years. Also, through 2009, very few Chinese firms have participated as petitioners with most of them participating only once. We also find several differences in China’s AD use across developed and developing trading partners both before and during the crisis. For instance, not only all of China’s AD measures through 2009 disproportionately targeted developed countries but also the entire increase in AD investigations by new sectors during the crisis years was directed against developed countries.
    Keywords: Antidumping Duties; China; Countervailing Duties; Crisis; Safeguards; Temporary Trade Barriers.
    JEL: F13 F14 F53
    Date: 2011–01–15
  15. By: Marat Ibragimov; Rustam Ibragimov; Rufat Khamidov
    Abstract: Distributions of many variables of interest in developed economic and financial markets, including income and wealth, exhibit heavy tails as in the case of Pareto or power laws. Many commonly used income and wealth inequality measures are very sensitive to extremes and outliers generated by these distributions due to their heavy-tailedness properties. This paper focuses on robust analysis of distributions and heavy-tailedness characteristics for data on income and wealth for the World, Russia and post-Soviet Central Asian economies. Among other results, it provides robust estimates of heavy-tailedness parameters for income and wealth in the markets considered and their comparisons with the benchmark values that are well-established for distributions of these variables in developed economies. The paper further provides applications of the obtained empirical results to inference on inequality measures and discusses their implications for market demand and economic equilibrium.
    Keywords: Income inequality, wealth inequality, CIS countries, Russian economy, post-Soviet economies, heavy-tailedness, power laws, Pareto distribution, income inequality, market demand, economic equilibrium
    JEL: C14 D31 P24
    Date: 2010–12
  16. By: Fu, Shihe; Shan, Liwei
    Abstract: Existing studies in finance have documented the comovement of stock returns of companies headquartered in the same location. The interpretation is that local investors have a “local bias” due to an information advantage on local companies. This paper argues that localized agglomeration economies affect the fundamentals of local companies, resulting in the local comovement of stock returns. Using the data for China A-share listed companies from 1997-2007, we confirm the local comovement of stock returns of companies headquartered in the same city; moreover, the stock returns of a company headquartered in a city with stronger agglomeration economies are also correlated more highly with stock returns of other companies headquartered in the same city. The local comovement of earnings among companies headquartered in the same city is also found, and the local comovement of stock returns is correlated with the local comovement of earnings. We conclude that correlated local fundamentals due to localized agglomeration economies can explain the local comovement of stock returns.
    Keywords: Stock returns; Local bias; Agglomeration economies
    JEL: G1 R1 R3
    Date: 2011–06–24
  17. By: Dinda, Soumyananda
    Abstract: This paper attempts to find the long run relation with short run dynamics of China’s trade in Asia and the world. Co-integration technique provides the economic integration of China’s export to the US and its import from Asian nations. This study observed that China is economically integrated with Asia and the world. China has double role in international trade – (i) China acts as an attractor of all inputs from Asia and (ii) China pushes the products in international market with a comparative advantage in price competition. This study also reveals that the speed of China’s import from Asia is faster than that of China’s export to the US.
    Keywords: Economic Integration; production network; Co-integration; Asia; China; the US; Error correction; Double Engine of Growth; Export; Import; Long run; short run dynamics.
    JEL: F15 O53 C22 C01
    Date: 2011–04–11
  18. By: Andersson, Fredrik N. G. (Department of Economics, Lund University); Edgerton, David (Department of Economics, Lund University); Opper, Sonja (Department of Economics, Lund University)
    Abstract: We propose a new methodology for testing inter-regional growth convergence in developing countries. Labor surplus economies are typically characterized by large inter-regional short-term growth fluctuations, which tend to mask long-term growth trends. These fluctuations render standard tests for growth convergence unreliable. A frequency domain analysis that separates between short and long-run growth offers new insights. We develop a growth model and provide an empirical application using provincial data from China covering the period 1978 - 2009. Our results suggest that provinces diverge over the short-term. Over the long term, however, provinces cluster into two growth clubs of converging provinces.
    Keywords: regional convergence; developing countries; growth; China
    JEL: O14 O33 O41 R11
    Date: 2011–07–04
  19. By: James Laurenceson (School of Economics, The University of Queensland)
    Abstract: Output growth volatility at the macroeconomic level reflects the impact of demand and supply-side shocks. These shocks differ in terms of the persistence of their impact on output growth with the former typically being responsible for cyclical fluctuations of the business cycle variety. This paper uses Spectral Density Analysis to decompose the persistence characteristics of output growth in China since 1953, including in its provinces and regions. An important finding is that the persistence characteristics of output growth changed dramatically in most provinces during the reform period to the extent that only a minority of output growth variance can be attributed to business cycle fluctuations. This finding points to a number of challenges for policy-makers, including questions over the expected effectiveness of using macroeconomic policies that are intended to smooth business cycle fluctuations when the nature of output growth volatility is considerably more complex.
    Date: 2011
  20. By: Marian Dinga
    Abstract: This paper analyzes the causal effect of investment incentives on regional allocation of foreign direct investment (FDI) in the Czech Republic during 2001-2007. Investment incentives institutional setup provided foreign investors with financial incentives depending on the particular district unemployment rate. The identification strategy is based on a regression-discontinuity approach as the scheme design introduces three unemployment thresholds differentiating the amount of the subsidy. The results indicate a positive effect of the investment scheme, but this impact is concentrated only at the lowest available unemployment threshold, increasing annual FDI inflow per capita by 330 euros compared to districts ineligible for the subsidy. However, an impact at higher unemployment thresholds is not found. Attracting FDI into the most distressed regions needs to be complemented with other policy tools and remains to be an important challenge for policymakers. Among other FDI location factors, the share of tertiary educated labor force and wages have significant positive impact on FDI, albeit only during 2001-2004, increasing annual FDI inflow per capita by 25 and 12 euros, respectively.
    Keywords: foreign direct investment; government expenditures; public incentives; regional development;
    JEL: H53 J08 R12 R38
    Date: 2011–04
  21. By: Kosovka Ognjenovic
    Abstract: In this paper is estimated the wage gap between the public and the private sector in Serbia, for women and men separately. The results show that, with advance of the transition, the public sector generates wage premium for those who work in that sector compared to the employed in the private sector. The public sector overpaid both men and women compared to their counterparts in the private sector, but the estimated wage premium for women is lower compared to the estimated wage premium for men (22.3 percent and 25.4 percent, respectively; both estimates are statistically significant). The only group of workers who are penalized for working in the public sector is comprised of women and men who have higher education. In order to estimate the sectoral wage gap by gender several regression models were used: the quantile regressions, the pooled OLS regression and the fixed-effects panel data model. The data that are used in the analysis are taken from the Serbian Living standard measurement surveys for 2003 and 2007.
    Keywords: transition, wage differences, public and private sectors, living standard measurement survey data
    JEL: J21 J31 J38 P2
    Date: 2011–02
  22. By: Kamaladin Rahmani (Assistant Professor of Management, Department of Economics and Management, Tabriz Branch, Islamic Azad University, Tabriz, Iran); Masoud Behravesh (Economics Researcher, Department of Management, Bonab Branch, Islamic Azad University, Bonab, Iran); Nayere Karegar (M.Sc Student of Economics Sciences, Department of Management, Bonab Branch, Islamic Azad University, Bonab, Iran); Samira Rahmani (B.Sc of Business Management, Department of Management, Tabriz Branch, Islamic Azad University, Tabriz, Iran)
    Abstract: Policy-making and appropriate economic planning in every country requires the recognition of its various regions productive capabilities and potentials. This research deals with the status of food industry in the province of Eastern Azerbaijan and the evaluation of comparative advantage in the main subdivisions of this industry. To achieve this, the productive potential of each of these subdivisions has been studied by making use of the ten comparative advantage subdivisions following the rating of the results by the help of the location coefficient index and indirectly has been obtained based on the issuance ability. Finally, the final prioritization of the subdivisions and their status in relation with their comparative advantage for the aforesaid industry by the application of numerical taxonomy has been presented. Ultimately, with the help of the spider diagram, and by due consideration of the results of location coefficient index, the amount of the structural changes of food industries of the province has been demonstrated during the years 2001 till 2006
    Keywords: Comparative advantage, Productive and Commercial benefit, Regional planning, International commerce, Province of Eastern Azerbaijan
    JEL: M00
    Date: 2011–06
  23. By: Michaela Kreyenfeld (Max Planck Institute for Demographic Research, Rostock, Germany); Valerie Martin
    Abstract: This paper investigates the economic conditions of stepfamilies in Germany, the Russian Federation and France using data from the first wave of the Generations and Gender Survey (GGS). The analysis shows that stepfamilies more often report economic hardship than nuclear families in France and western Germany. Socio-demographic differences between family types — particularly the fact that stepfamilies tend to be larger families — explain the differences in economic well-being between families in France. For western Germany, differences between nuclear and stepfamilies remain after controlling for socio-economic composition of different family types. For the Russian Federation and eastern Germany, we do not find any statistically significant differences in economic well-being between stepfamilies and nuclear families. The major dividing line for these regions runs between single parents and other types of families.
    Keywords: Germany, family
    JEL: J1 Z0
    Date: 2011–06
  24. By: Ranjan Ray; Kompal Sinha
    Abstract: This study compares living standards in China, India and Vietnam using the recent multidimensional approach. A distinguishing feature of this study is the use of unit record data sets containing household level information on a wide range of variables including access to several dimensions of living, wealth and child health. The study uses household level information on a wide variety of indicators and the methodology of Principal Component Analysis to measure household wealth. The wealth index is then used to examine the distribution of deprivation and poverty by wealth percentiles. This paper uses the Lorenz curve for wealth and the pseudo Lorenz curves for deprivation and poverty to show that wealth, used here as a proxy for income, understates deprivation and poverty in all the three countries. The paper also provides evidence on child health, which is at odds with the overall progress that is portrayed by the multidimensional measures.
    Keywords: Multidimensional Deprivation, Wealth Index, Principal Component Analysis, Sub group Decomposability.
    JEL: I10 I31 I32 O1
    Date: 2011–06
  25. By: Michal Bencik (National Bank of Slovakia, Research Departmen)
    Abstract: Business cycle synchronisation between the V4 countries and the euro area is important in regard to the costs of the common monetary policy. This paper addresses the issue of business cycle synchronisation by directly calculating cross correlations, by calculating cross correlations from primary impulses, and finally by calculating output gap component correlations from common and country-specific shocks. In regard to the output gap, the results of all three methods are approximately the same: before 2001, the business cycles of the V4 countries were not synchronised with the euro area (low or negative correlations); between 2001 and 2007, the correlations entered positive territory as the V4 countries joined the EU and trade between the V4 countries and the euro area increased; and during the economic crisis of 2008–2009, synchronisation increased still further.
    Keywords: optimum currency area, business cycle, autoregressive model, SVAR
    JEL: E32 F02
  26. By: Sebastian Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw)
    Abstract: In this paper we provide a comparative analysis of inequality in household consumption per capita in four South-Eastern European countries, Albania, Bosnia & Herzegovina, Bulgaria, and Serbia. The analysis is based on a largely consistent dataset derived from the World Bank’s Living Standards Measurement Study (LSMS) providing data for at least two years for each of these countries and a comparable set of variables. We apply inequality decomposition methods based on regression analysis and variants of the Shapley value approach. We also present results from related methods like a decomposition of the explained variance using different approaches for comparisons. The results suggest that three groups of variables are particularly important for explaining patterns of inequality; these are socio-demographic variables, employment status and education. Regional aspects and nationality or ethnicity plays a less important role though there are some country differences.
    Keywords: Inequality decomposition; Gini; Shapley value; Western Balkan countries
    JEL: C20 D63
    Date: 2009–11
  27. By: Olgica Ivančev; Milena Jovičić; Tijana Milojević
    Abstract: Using 2006-2009 HBS data, we study poverty and inequality in Serbia and compare income-group impacts of different social policy programmes. Methodological innovations of the paper are: testing validity of OECD equivalence scale by HAC procedure and replacing it with per capita measurements, use of quantile regression and recursive estimation in defining income groups with specific responses, and testing group effects (partitioned coefficients) of policy programmes in the frame of panel methodology. The confirmed hypotheses are: income inequality is decreasing as a consequence of social policy measures, except for in the last observed year, but these effects vary in different income-groups.
    Keywords: inequality, transition, social policy, Serbia, quantile regression, panel model
    Date: 2010–10
  28. By: Tomas Ramanauskas (Bank of Lithuania)
    Abstract: In this paper we analyse determinants of the recent boom-and-bust cycle of the Lithuanian economy with the help of a medium-sized macroeconometric model that incorporates a functional financial block. Special emphasis is put on the role of credit market conditions during the overheating episode. We quantitatively estimate the impact of credit conditions and externally funded bank lending on macroeconomic developments. There is evidence that easy credit conditions and active credit expansion contributed moderately to real economic growth but significantly added to overheating pressures by pushing up real estate prices, encouraging concentration of labour and capital into procyclical sectors and increasing private sector’s debt burden. During the boom episode buoyant external environment provided strong background for export-led growth, which was later strongly affected by temporary foreign trade collapse at the outset of the economic crisis. Model results also suggest that government’s discretionary fiscal policies may have contributed to economic overheating and severity of the ensuing crisis by not adopting sufficiently prudent fiscal stance during the boom episode. The model confirms that more favourable interest rate environment and accommodating fiscal policies are important for providing a temporary relief for the crisis-stricken economy but deep structural transformation of the economy is needed for the sustainable recovery to take hold.
    Keywords: structural macroeconometric modelling, macrofinancial linkages, economic cycles, credit, banking sector, housing price bubble
    JEL: E10 E17 E37 E51
    Date: 2011–07–04
  29. By: Kurmanalieva, Elvira; Vinokurov, Evgeny
    Abstract: The main purpose of this paper is to assess intra-regional trade within the CIS by looking at the impact of numerous trade agreements in the region. Applying a gravity model on a set of 162 countries, we attempt to assess dynamics of intra-regional trade of various trade agreements between 1995 and 2008 in order to identify trade creation and trade diversion effects. We propose and empirically test three explanations of the CIS intra-regional trade: 1) home bias effect, 2) holding together effect and 3) holdup effect. Finally, we perform a simulation of potential trade and see to what extent twelve post-Soviet states and all their groupings would, ceteris paribus, have traded with each other.
    Keywords: Soviet Union; CIS; EurAsEC; CES; Gravity equation; Trade potential; Panel data
    JEL: F15 F13 C23 O54 O52
    Date: 2011–06

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