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on Transition Economics |
| By: | Torosyan, Karine (ISET, Tbilisi State University); Filer, Randall K. (Hunter College/CUNY) |
| Abstract: | This paper applies three different methods widely used in the literature to track changes in shadow economic activity in Georgia following a drastic tax reform in 2005. The first method is a currency demand approach based on macro level data. The second and third methods rely on micro data from household surveys. Overall, we find evidence that the amount of income underreporting decreased in the years following the reform. The biggest change is observed for households headed by a farmer, followed by "other" types of households where the head does not report any working status. Employed and self-employed households appear very similar before the tax reform and show minimal adjustment in income reporting in the post-reform period. Results, however, suggest that much of any difference may have come from increased enforcement efforts rather than rate changes. |
| Keywords: | consumer behavior, tax reform, hidden/shadow economy, transition economy |
| JEL: | E01 H26 J39 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6912&r=tra |
| By: | Olga Izryadnova (Gaidar Institute for Economic Policy) |
| Abstract: | This paper deals with Russia’s marcoeconomic structure. The author analyzes major trends and drivers, major GDP characteristics, changes in GDP structure, production development and structure by type of economic activity. |
| Keywords: | Russian economy, Russia’s GDP |
| JEL: | O11 G18 G28 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:44&r=tra |
| By: | Vasily Zatsepin (Gaidar Institute for Economic Policy); Vitaly Tsymbal (Gaidar Institute for Economic Policy); Elena Trofimova (Gaidar Institute for Economic Policy) |
| Abstract: | The transition to “a new image” of the Armed Forces of the Russian Federation that started back in 2008 and continued through 2011 was clearly planned, as the Russian top military leaders affirmed. In practice, however, these plans proved to be “unbaked” and required online corrections and removal of deficiencies. This paper deals with the acute issues of the Russian Military Reform throughout 2011. |
| Keywords: | military reform, Russian Federation, conscription, defence policy |
| JEL: | D74 F52 F53 H56 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:49&r=tra |
| By: | Sergey Drobyshevsky (Gaidar Institute for Economic Policy) |
| Abstract: | This paper is about the bane of the Russian economy: rich oil and gas reserves, which hamper the implementation of structural economic reforms. Oil industry forms the backbone of the Russian economy playing a major role in ensuring revenues of the government budget and the country’s favorable trade balance. |
| Keywords: | Russian economy, Russia’s oil-and-gas sector. |
| JEL: | L71 L72 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0036&r=tra |
| By: | Tanaka, Kiyoyasu; Hashiguchi, Yoshihiro |
| Abstract: | Foreign firms have clustered together in the Yangtze River Delta, and their impact on domestic firms is an important policy issue. This paper studies the spatial effect of FDI agglomeration on the regional productivity of domestic firms, using Chinese firm-level data. To identify local FDI spillovers, we estimate the causal impact of foreign firms on domestic firms in the same county and similar industries. We then estimate a spatial-autoregressive model to examine spatial spillovers from FDI clusters to other domestic firms in distant counties. Our results show that FDI agglomeration generates positive spillovers for domestic firms, which are stronger in nearby areas than in distant areas. |
| Keywords: | China, Foreign investments, International business enterprises, Productivity, FDI, Multinational firms, Spillovers |
| JEL: | C21 F21 F23 R12 R58 |
| Date: | 2012–06 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper354&r=tra |
| By: | Irina Starodubrovskaya (Gaidar Institute for Economic Policy); Nina Mironova (Gaidar Institute for Economic Policy) |
| Abstract: | This publication addresses theoretical and practical aspects of rural life in Russia. The authors developed approaches to enhance rural evelopment in the framework of regional managerial strategies. Operation of the institutions of local development in Arhkangelsk oblast and the Republic of Karelia are investigated. Objective preconditions, constraints, institutional circumstances and the most preferable mechanisms of ensuring development on various types of rural territories are studied. The influence of municipal reform on all these issues is also demonstrated. |
| Keywords: | Rural Development, Municipal Reform, Russia |
| JEL: | H30 K10 R00 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:69&r=tra |
| By: | Olga Izryadnova (Gaidar Institute for Economic Policy) |
| Abstract: | This paper deals with Russia’s capital investments in 2011. |
| Keywords: | Russia’s capital investments |
| JEL: | F34 G24 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:45&r=tra |
| By: | Lazarevski, Dimche; Mrsik, Jadranka |
| Abstract: | The objective of this paper is to examine and analyze empirically whether the Central and Eastern Europe countries` reformed pension systems are providing adequate and safe pensions. Starting in 1990s, most Central and Eastern European countries radically reformed their pension systems. The rising optimism initiates many studies where the advantages of the reforms were in the focus. The global financial crisis negatively affects the reformed pension systems. As a response, the policy makers in few of those countries decided to set up different measures: increasing or reducing the pension contribution for alleviating the fiscal deficit or encouraging the employment, adapting the contribution rate and allowing individuals to switch back to the old system. These last changes in the pension systems have triggered the following question: How much and in which way the implementation and experiences gained with the functioning of the reform pension system will have impact in the future pension adequacy and sustainability of the pension system? |
| Keywords: | reformed pension systems; financial crisis; sustainability of pension systems; government measures; pension contributions; pension benefits |
| JEL: | H55 G23 J32 J26 G10 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41996&r=tra |
| By: | Bachev, Hrabrin |
| Abstract: | This paper suggests a holistic framework for analyzing the forms and efficiency of agri-environmental management; assesses evolution of market, private, public and hybrid modes of agri-eco-governance during transition and EU integration in Bulgarian; evaluates the impacts of EU CAP on environmental sustainability of Bulgarian farms; specifies major environmental challenges in Bulgarian agriculture, and suggests recommendations for improvement of public policies for effective environmental management. First, it incorporates interdisciplinary New Institutional Economics and suggests a comprehensive framework of analyzing the eco-management in agriculture. Second, it presents the evolutions of diverse forms of eco-management during post-communist transition and EU integration of Bulgarian agriculture, and analyzes their impact(s) on agents’ behaviour and efficiency. Third, it assesses the impact(s) of dominating system of management and the new public (EU, national) measures on the state of environment, and identifies major eco-challenges, conflicts and risks. Forth, it evaluates the impacts of EU CAP implementation on eco-performance of Bulgarian farms. Finally, it suggests recommendations for institutional modernization and for improvement of public policies for effective environmental management. |
| Keywords: | agri-eco-governance; market; private; public modes; agricultural transition; eco-effects of EU CAP; Bulgaria |
| JEL: | Q28 Q24 O13 Q12 Q25 Q18 Q26 O17 Q13 |
| Date: | 2012–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42098&r=tra |
| By: | Lazarevski, Dimche; Mrsik, Jadranka; Smokvarski, Edi |
| Abstract: | The objective of this paper is to examine and analyze the differences between Venture Capital development in Macedonia and several Central and Eastern Europe countries, to determine the reasons, and hence extract certain conclusions that will serve as a guideline in Macedonia’s venture capital industry development. Venture capital is an important intermediary in financial markets, providing capital to firms who otherwise have difficulties attracting financial support. Moreover, venture capital funds provide managerial expertise to the company they are investing in, and have impact on the overall economy through innovation, job creation, economic growth, increased competition and improved corporate governance. Private equity and Venture capital funds are present for over 20 years in Central and Eastern Europe. The institutional investors evaluate the individual countries’ attractiveness to identify the best investment opportunities for their asset allocation. On the basis of the performed analysis in this paper regarding the PE/VC fundraising and investment activities, conducted interviews, and Country Attractiveness Index (including the economic activities, depth of capital market, taxation, investor protection and corporate governance, human and social environment and entrepreneurial culture and opportunities), Macedonian small and medium size enterprises are obviously not on the PE/VC investors` map, according to the small amount of their investments up to now. |
| Keywords: | financial markets; financial institutions; venture capital; small and medium enterprises; entrepreneurship |
| JEL: | D53 N20 O16 L26 G24 |
| Date: | 2012–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41997&r=tra |
| By: | Mojsoska-Blazevski, Nikica; Petreski, Marjan |
| Abstract: | The objective of this paper is to examine the factors influencing worker’s job satisfaction aside the conventional factors (personal background, individual labour market characteristics, organisational culture, and so on) and introduce the basic cultural values and beliefs, and then to put this into a comparative perspective for the South-East European (SEE) countries and for Macedonia, in particular. Cultural values have been grouped into traditional vs. secular-rational values and survival vs. self-expression values. The main result from the study is that cultural heritage exerts considerable effect on job satisfaction in SEE with some determinants – like the importance of work, religion and family – exerting stronger influence in SEE than in CEE and in Western Europe. The impact of cultural values on job satisfaction in Macedonia has been found to be only limited. Mainly the traditional cultural values have been found important, while only trust from the ‘survival’ group likely affects job satisfaction and likely with the effect being stronger than in the case of SEE, CEE and Western Europe. |
| Keywords: | job satisfaction; cultural values |
| JEL: | M54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:41940&r=tra |
| By: | Pop-Silaghi, Monica (Babeș-Bolyai University); Jude, Cristina (Babeș-Bolyai University); Alexa, Diana (Babeș-Bolyai University); Litan, Cristian (Babeș-Bolyai University) |
| Abstract: | This paper examines the impact of R&D expenditures in business and private sector on economic growth in Central and Eastern European Countries over the period 1998-2008. Using a Generalised Method of Moments estimator, we find that business R&D has a high and stable contribution to economic growth. Public R&D has no effect on growth but does not crowd out private activity. The paper also finds that part of the business R&D effect is accounted for by human capital. The results remain robust after considering macroeconomic control variables. |
| Keywords: | R&D; human capital; economic growth; CEE; dynamic panel-GMM. |
| JEL: | O32 O33 O52 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kngedp:2012_004&r=tra |
| By: | Robert Ambrisko; Vitezslav Augusta; Dana Hajkova; Petr Kral; Pavla Netusilova; Milan Rikovsky; Pavel Soukup |
| Abstract: | We survey discretionary measures of Czech fiscal policy in the period 2001-2011 and analyze their episodes and macroeconomic impacts. We use bottom-up and top-down methods to identify fiscal discretion and we compare the results with Kalman filtering. Fiscal discretion is found to be used frequently and to be large in several years. At the same time, the results signal that macroeconomic stabilisation has not been major aim of fiscal discretion measures. For example, in the years of economic recession 2010-2011, the government put emphasis on pro-cyclical consolidation. |
| Keywords: | Deficit, economic cycle, fiscal discretion, government expenditures, government revenues. |
| JEL: | H50 H62 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:rpnrpn:2012/01&r=tra |
| By: | Maurer-Fazio, Margaret (Bates College) |
| Abstract: | We conduct a large‐scale field experiment to investigate how Chinese firms respond to job applications from ethnic minority and Han applicants for jobs posted on a large Chinese Internet job board. We denote ethnicity by means of names that are typically Han Chinese and distinctively Mongolian, Tibetan, and Uighur. We find significant differences in the callback rates by ethnicity and that these differences vary systematically across ethnic groups. Not all firms discriminate – approximately half treat all candidates equally. State-owned firms are significantly less likely than privately‐owned firms to discriminate against minorities by calling only candidates with Han names and much more likely to treat candidates equally. |
| Keywords: | Chinese firms, hiring, discrimination, ethnicity, internet job boards, resume audit study |
| JEL: | J71 J23 J15 O52 P25 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6903&r=tra |
| By: | Meng, Bo; Zhang, Yaxiong; Guo, Jiemin; Fang, Yong |
| Abstract: | Attempts to understand China’s role in global value chains have often noted the case of Apple's iPhone production, in particular the fact that the value added during the Chinese portion of the iPhone’s supply chain is no more than 4%. However, when we examine the Chinese economy as a whole in global production networks, China’s share in total induced value added by China’s exports of final products to the USA is about 75% in 2005. This leads us to investigate how Chinese value added is created and distributed not only internationally but also domestically. To elucidate the increasing complexity of China’s domestic production networks, this paper focuses on the measure of Domestic Value Chains (DVCs) across regions and their linkages with global markets. By using China’s 1997 and 2007 interregional input-output tables, we can understand in detail the structural changes in domestic trade in terms of value added, as well as the position and degree of participation of different regions within the DVCs. |
| Keywords: | China, International trade, International competition, Local economy, Trade in value added, Value chain, Vertical specialization, Comparative advantage |
| JEL: | C6 F4 O18 |
| Date: | 2012–07 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper359&r=tra |
| By: | Sergey Tsukhlo (Gaidar Institute for Economic Policy) |
| Abstract: | This paper was prepared using data of monthly business surveys conducted by the Gaidar Institute for Economic Policy (IEP) among managers of industrial enterprises since September 1992. The surveys are based on the European harmonized methodology and encompass the entire territory of the Russian Federation. The size of the panel is about 1100 enterprises that employ over 15% of the total number of employed in industry. The panel is biased towards large enterprises in each of the selected sub-industries. The rate of response to questionnaires ranges from 65% to 70%. |
| Keywords: | business surveys, Russian economy, industrial enterprises |
| JEL: | C53 E37 L21 L52 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:42&r=tra |
| By: | Àlexey Vedev (Gaidar Institute for Economic Policy) |
| Abstract: | Issue is devoted to an actual problem to which is still given not enough attention – a problem of long-term forecasting of national financial sector as a component of an economic complex. Problems of a forecast of development of the financial markets coordination with economic development of the country, on the one hand, and with a forecast of development of the global financial market, on the other hand are considered. Balances of the major financial instruments and institutional balances of the main sectors the economy in aggregate forming complex financial balance of the country are constructed in paper. On this basis the forecast of development of the financial markets for the period till 2020, based on assumptions of the balanced scenario is created. Besides, possibilities and transition conditions to higher growth rates of the financial market under assumption of stability are defined. |
| Keywords: | long-term forecasting , national financial sector, financial markets |
| JEL: | C01 E01 E02 E50 E61 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:66&r=tra |
| By: | Quheng, Deng (Chinese Academy of Social Sciences); Gustafsson, Björn Anders (University of Gothenburg); Li, Shi (Beijing Normal University) |
| Abstract: | Intergenerational income elasticities are estimated using samples for urban China (covering many cities) for the years 1995 and 2002 and compared with results from other studies. We find that the income relation between the pairs: sons and fathers, sons and mothers and daughters and mothers, are in 2002 all similar in magnitude. In contrast the relation between daughters' and fathers' income is weaker. The income relationship between offspring and mothers was weaker in 1995 than in 2002. Our preferred estimates of income persistency for the son-father pairs of 0.47 for 1995 and 0.53 for 2002 are higher than what has been reported in the literature for several high-income countries with large welfare states. The strength of the income link between sons and fathers in urban China appears to be not very different from what has been reported for countries such as Brazil, Chile and the United States. |
| Keywords: | intergenerational income mobility, China |
| JEL: | D31 J62 P32 |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp6907&r=tra |
| By: | A. V. Leonidov; E. L. Rumyantsev |
| Abstract: | Systemic risks characterizing the Russian overnight interbank market from the network point of view are analyzed. |
| Date: | 2012–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1210.3814&r=tra |
| By: | Qin, Duo (BOFIT); He, Xinhua (BOFIT) |
| Abstract: | Ways of extracting financial condition indices (FCI) are explored and alternative FCIs external to the Chinese economy are constructed to model their predictive content. The exploration aims at highlighting the rich and varied dynamic features of financial variables underlying FCIs and the importance of synchronising dynamic information between FCIs and the real-sector variables to be forecasted. The modelling experiment aims at improving the forecasting model upon which the FCIs are assessed. Four variables are chosen as the likely macro channel of the FCIs affecting the Chinese economy. It is found that the FCI-led models enjoy forecasting advantages over a benchmark model in three out of the four variables, although the benchmark model is not dominated by the FCI-led models when judged by in-sample encompassing tests. The evidence indicates the increasing exposure of the Chinese economy to the global financial conditions. |
| Keywords: | financial index; dynamic factor; VAR; error correction; encompassing |
| JEL: | C43 E17 F37 G17 |
| Date: | 2012–10–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2012_025&r=tra |
| By: | Mirdala, Rajmund |
| Abstract: | Negative macroeconomic performance issues represent one of the key effects of crisis period. Due to many economic crisis related side effects countries became more vulnerable to various types of endogenous and exogenous shocks. Exchange rates of the European transition economies became much more volatile as a result of increased uncertainty on the financial markets as well as changed behavior of structural shocks affecting exchange rates path during the crisis period. As a result we expect a contribution of the structural shocks to the exchange rates path has changed. In the paper we analyze sources of exchange rate fluctuations in the European transition economies. We estimate the contribution of nominal, supply and demand shocks to NEER and REER variability implementing SVAR methodology. Long run restrictions are applied to unrestricted VAR model to identify structural shocks. Variance decomposition and impulse-response functions are computed for each individual country for the period 2000-2007 and 2000-2011. Comparison of results for both periods is crucial for identification of the role of economic crisis in determining exchange rate volatility in the European transition economies. |
| Keywords: | exchange rates; exogenous structural shocks; structural vector autoregression; variance decomposition; impulse-response function |
| JEL: | C32 E52 |
| Date: | 2012–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:42060&r=tra |
| By: | Sergey Narkevich (Gaidar Institute for Economic Policy); Pavel Trunin (Gaidar Institute for Economic Policy) |
| Abstract: | This works deals with the analysis and classification of the existing theoretical and empirical models describing the factors of establishing reserve currencies, and their role in today's global payment system. The important part of the study is devoted to the concept of a regional reserve currency, and the definition of the specific factors affecting the upgrading of the currency status. The authors assess the role of regional reserve currencies in international transactions and global financial markets. In the final part of the study the authors analyze the activities that could enhance the status of the Russian ruble and turn it into a regional reserve currency. |
| Keywords: | Reserve Currencies, regional reserve currency |
| JEL: | E42 E44 E58 F31 F33 F36 F42 F55 G15 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gai:ppaper:68&r=tra |
| By: | Anna Sznajderska (National Bank of Poland) |
| Abstract: | Asymmetric effects in a monetary policy rule could appear due to asymmetric preferences of the central bank or/and due to nonlinearities in the economic system. It might be suspected that monetary authorities are more aggressive to the inflation rate when it is above its target level than when it is below. It also seems probable that monetary authorities have different preferences and react more strongly when the level of economic activity is low than when it is high. In this paper we investigate whether the reaction function of the National Bank of Poland (NBP) is asymmetric according to the level of inflation gap and the level of output gap. Moreover, we test whether these asymmetries might possibly stem from the nonlinearities in the Phillips curve. Threshold models are applied and two cases of unknown and known threshold value are investigated. |
| Keywords: | nonlinear Taylor rule, nonlinear Phillips curve, asymmetries, threshold models |
| JEL: | E52 E58 E30 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:125&r=tra |
| By: | Jakub Muck (National Bank of Poland, Economic Institute; Warsaw School of Economics, Institute of Econometrics); Pawel Skrzypczynski (National Bank of Poland, Economic Institute) |
| Abstract: | It is commonly known that various econometric techniques fail to consistently outperform a simple random walk model in forecasting exchange rates. The aim of this study is to analyse whether this also holds for selected currencies of the CEE region as the literature relating to the ability of forecasting these exchange rates is scarce. We tackle this issue by comparing the random walk based out-of-sample forecast errors of the Polish zloty, the Czech koruna and the Hungarian forint exchange rates against the euro with the corresponding errors generated by various single- and multi-equation models of these exchange rates. The results confirm that it is very difficult to outperform a simple random walk model in our CEE currencies forecasting contest. |
| Keywords: | CEE currencies, exchange rate forecasting, random walk,VAR, BVAR |
| JEL: | C22 C32 C53 F31 G17 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:127&r=tra |