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on Transition Economics |
| By: | Whalley, John (University of Western Ontario); Xing, Chunbing (Beijing Normal University) |
| Abstract: | Within urban income inequality has become an increasingly important component in China's overall income inequality in recent years. Using three Chinese urban household surveys for 1995, 2002, and 2007, we examine how the change in ownership structure, one of the major changes in China's transition process, has contributed to China's rising within urban wage inequality. We show that the private sector had higher wage dispersion than the public sector in the period 1995-2007 and that the wage dispersion increased faster in the public sector. Decomposition exercises that follow show that over 50% of the increase in urban wage inequality was associated with labor being reallocated from the public to the private sector. Increases in wage dispersions within different ownerships (in particular the public sector) also make significant contributions to growing inequality. Counterfactual analysis indicates that the urban wage inequality may rise further if more labor is reallocated to the private sector in the future. |
| Keywords: | ownership, wage inequality, urban China, decomposition |
| JEL: | J31 I24 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9748&r=tra |
| By: | Wang, Fei (Renmin University of China); Zhao, Liqiu (Renmin University of China); Zhao, Zhong (Renmin University of China) |
| Abstract: | China initiated its family planning policy in 1962 and one-child policy in 1980 and allows all couples to have two children as of 1st January, 2016. This paper systematically examines the labor market consequences of China's family planning policies. First, we briefly review the major historical evolution of China's family planning policies. Second, we investigate the effects of these policies on the labor market, focusing on the size and quality of the working-age population and its age and gender composition and paying special attention to regional as well as rural-urban differences in the demographic structure resulting from the interaction of the family planning policies and internal migration. Last, we discuss undergoing and prospective policy changes and potential consequences. Though urban areas and coastal provinces have implemented stricter family planning policies, our analysis shows that because of internal migration, the aging problem is more severe in rural areas and in inland provinces. Our simulation results further indicate that the new two-child policy may be too late and too little to alleviate the aging problem in China. |
| Keywords: | One-Child Policy, aging, sex ratio, quantity–quality model, migration |
| JEL: | J13 J11 J21 J61 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9746&r=tra |
| By: | International Monetary Fund |
| Abstract: | This paper discusses Kosovo’s First Review Under the Stand-By Arrangement and Requests for Modification and Waivers of Applicability of Performance Criteria (PC). The program is on track. All end-August 2015 PCs and indicative targets were met by comfortable margins. All structural benchmarks for the first review have been met. More broadly, there is strong ownership of structural reforms in the financial sector and in public procurement. The authorities reaffirmed the targets for the fiscal deficit and bank balances for next year and identified measures to achieve these. The IMF staff support the authorities’ request for completion of the first review. |
| Keywords: | Europe;Kosovo;bank, budget, banking, criteria, debt |
| Date: | 2016–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:16/22&r=tra |
| By: | Miklos Szanyi (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences) |
| Abstract: | Countries of East-Central Europe underwent fundamental economic and political changes in their transition process. Their economies were restructured and modernized, became integrated part of the world’s most competitive value chains. Although, benefits of the FDI-led development process did not spread spatially evenly, moreover, they might be smaller than what was expected the achieved economic and political results were remarkable. Yet, in some of these countries acknowledgement of benefits have been started to be overshadowed by strong criticism that sometimes queries the advantages of the FDIled development at large. The main question of the paper is if this criticism is reflected in (both positively and negatively) discriminating policies of the Hungarian state towards foreign companies? The main finding of the paper is that the main aim of changing FDI-related policies is not a decisive break with the model, but rather to split the strong networks of multinational business in order to increase the room of selective and arbitrary advantage and disadvantage measures of the government. This means first of all a departure from the concept of “competition state” towards “patronage state”. |
| Keywords: | FDI policy, crony capitalism, patronage state |
| JEL: | D72 H82 P16 P31 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iwe:workpr:220&r=tra |
| By: | Korhonen, Iikka (BOFIT); Nuutilainen, Riikka (BOFIT) |
| Abstract: | We estimate several monetary policy rules for Russia for the period 2003–2015. We find that the traditional Taylor rule describes the conduct of monetary policy in Russia reasonably well, whether coefficients are restricted to being the same or allowed to change over the sample period. We find that the Bank of Russia often overshot its inflation target and that extensive overshooting is associated with large depreciations of the ruble, testifying to the importance of the exchange rate in the conduct of monetary policy in Russia. |
| Keywords: | monetary policy rule; Taylor rule; McCallum rule; Russia; inflation |
| JEL: | E31 E43 E52 P33 |
| Date: | 2016–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2016_002&r=tra |
| By: | International Monetary Fund |
| Abstract: | This Technical Assistance Report discusses measures to enhance the powers and independence of the National Securities and Stock Market Commission (NSSMC) in Ukraine. The NSSMC faces significant challenges in its role as the regulator of the Ukrainian securities market. Market activity has been shrinking over the past few years, but misconduct—such as issuance and trading of “fictitious†securities—prevails. Key changes needed relate to enhancing the NSSMC’s ability to conduct investigations of and demand information from any legal or natural person, have access to information otherwise restricted by secrecy laws, assist foreign authorities even without an apparent violation of the Ukrainian securities laws, and maintain the confidentiality of information exchanged under the Multilateral Memorandum of Understanding. |
| Keywords: | Ukraine;Europe;securities, market, operational independence, budget, monetary fund |
| Date: | 2015–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/284&r=tra |
| By: | Michael Landesmann (The Vienna Institute for International Economic Studies, wiiw); Sandra M. Leitner (The Vienna Institute for International Economic Studies, wiiw); Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | Abstract Understanding the complexity of innovation processes and unravelling the complicated relationships between innovation and productivity is pivotal to effective and purposeful public policy, designed particularly for economically lagging economies to initiate their swifter technology-induced growth and catching-up with richer economies. In this respect, the analysis focuses on machinery and equipment (M&E) acquisition as a key innovation strategy and uses a modified CDM model (Crépon et al., 1998). The model is extended by introducing binding financing constraints to shed light on the drivers and determinants of innovation inputs, the relationship between innovation input and innovation output and, finally, the relationship between innovation output and firm productivity. We consider three different economic phases, spanning from the early 2000s and the immediate pre-crisis period to the immediate post-crisis period. The analysis uses firm-level data for a large set of Central, East and Southeast European countries (CESEE) and Former Soviet Union countries (FSU) and demonstrates that financing constraints were non-negligible and very harmful, inducing entrepreneurs to be less likely to invest in M&E but also to invest less in the acquisition of M&E. Moreover, it points to the important role of M&E investment efforts for an establishment’s innovation success, suggesting that establishments with higher M&E investment effort are also more likely to become successful product innovators. Finally, it consistently demonstrates that successful innovative activities pay off, significantly enhancing innovators’ labour productivity levels. |
| Keywords: | funding constraints, innovation strategies, innovation outcome, establishment performance, Central, East and Southeast Europe and Former Soviet Union, pre- and post-crisis developments |
| JEL: | G21 D24 L25 O1 O31 O33 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:wii:wpaper:123&r=tra |
| By: | David I. Stern (Crawford School of Public Policy, The Australian National University); Donglan Zha (College of Economics and Management, Nanjing University of Aeronautics and Astronautics) |
| Abstract: | Though the environmental Kuznets curve (EKC) was originally developed to model the ambient concentrations of pollutants, most subsequent applications have focused on pollution emissions. Yet, it seems more likely that economic growth could eventually reduce the concentrations of local pollutants than emissions. We examine the role of income, convergence, and time related factors in explaining recent changes in PM 2.5 and PM 10 particulate pollution in 50 Chinese cities using new measures of ambient air quality that the Chinese government has published only since the beginning of 2013. We use a recently developed model that relates the rate of change of pollution to the growth of the economy and other factors as well as the traditional environmental Kuznets curve model. Pollution fell sharply from 2013 to 2014. We show that economic growth, convergence, and time effects all served to lower the level of pollution. The results also demonstrate the relationship between the two modeling approaches. |
| Keywords: | air pollution; economic growth; environmental Kuznets curve; China |
| JEL: | O44 P28 Q53 Q56 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1603&r=tra |
| By: | International Monetary Fund |
| Abstract: | This report provides to the Ministry of Finance a review of the current mass valuation appraisal system, and further policy directions on improved tax design for a property tax that would not invite Constitutional challenge, especially in respect of tax base definition, tax rate policy, and tax relief. These measures combined would broaden the base with less rate discrimination. The mission identified the following key structural problems as to the design of the real property tax and suggested corrective steps with the view to improving collections from property taxes across Slovenia |
| Date: | 2016–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:16/53&r=tra |
| By: | International Monetary Fund |
| Abstract: | This paper discusses Serbia’s Second Review Under the Stand-by Arrangement (SBA) and Request for Waivers of Applicability of Performance Criteria (PCs). The economy of Serbia is gradually recovering from the 2014 recession, supported by strong export performance coupled with a smaller-than-expected fall in consumption. Inflation has remained below the National Bank of Serbia tolerance band due mainly to low imported inflation. All end-June PCs and indicative targets were met with significant margins. The IMF staff supports the authorities’ request for the completion of the Second Review under the SBA, given the program performance so far and the policy commitments going forward. |
| Keywords: | Serbia;Europe;debt, balance of payments, inflation, monetary fund, goods |
| Date: | 2015–10–27 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/296&r=tra |
| By: | Denisova-Schmidt, Elena; Huber, Martin; Leontyeva, Elvira |
| Abstract: | Based on empirical data from selected public universities in Khabarovsk, Russia, this paper compares first and fifth year students regarding their attitudes towards corruption in general and university corruption in particular. Even after making both groups of students comparable with respect to a range of socio-economic characteristics by a matching approach, the results suggest that fifth year students are more open to a range of informal and corrupt practices than first years. Our analysis therefore points to the possibility that the Russian higher education system might ‘favor’ compliance with corruption and informal practices, with potentially detrimental consequences for the Russian society as a whole. |
| Keywords: | Russia; University; Corruption; Ambivalence; Academic Dishonesty; Higher Education; Matching |
| JEL: | D73 |
| Date: | 2016–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:fri:fribow:fribow00467&r=tra |
| By: | International Monetary Fund |
| Abstract: | This Selected Issues paper analyzes government spending in Bosnia and Herzegovina (BiH). The size of the public sector in BiH is one of the largest in the region, owing mainly to a complex and highly decentralized governance structure. BiH spends a greater share of public resources on current spending items, notably on wages and social transfers. Moreover, poorly targeted social benefits generate adverse incentives with respect to informality and labor force participation. To enhance economic growth, BiH will need to refocus its spending and increase its efficiency, chiefly on spending on human and physical capital. |
| Keywords: | Europe;Bosnia and Herzegovina;government spending, expenditures, public sector, deficit, services |
| Date: | 2015–10–28 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/299&r=tra |
| By: | International Monetary Fund |
| Abstract: | This paper discusses Armenia’s Second Review Under the Extended Arrangement and Request for Waivers of Nonobservance and Rephasing. Since late 2014, Armenia’s economic performance has been affected by significantly weaker external conditions, as the slowdown of the Russian economy, the weakening of the ruble, lower metals prices, and the strengthening of the dollar have led to pressures on external receipts, particularly remittances. Performance under the program has come under strain. Three performance criteria (PCs) were missed both at end-December 2014 and end-June 2015. The authorities are requesting waivers of nonobservance for the missed June and continuous PCs. The IMF staff supports completion of the review. |
| Keywords: | Middle East;Armenia;deficit, exchange, remittances, monetary fund, interest |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/320&r=tra |
| By: | International Monetary Fund |
| Abstract: | The economy has shown some resilience in the face of adverse regional shocks but potential growth is constrained by persistent structural challenges, particularly lagging productivity and dependence on gold, remittances, and foreign aid. Satisfactory performance under the program during the first half of the year was followed by fiscal slippages in the run-up to the October elections and a delay in adopting the Banking Code, a key measure to strengthen central bank independence and the bank resolution framework. The combined impact of a large public investment program and currency depreciation has raised the public debt ratio markedly. Significant further depreciation could pose risks for the otherwise well capitalized, but highly dollarized, financial sector. The business environment remains weak, overshadowed by lingering disagreements between the authorities and the largest foreign investor. |
| Date: | 2016–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:16/55&r=tra |
| By: | International Monetary Fund |
| Abstract: | This paper discusses the status of Ukraine’s Eurobond held by the Russian Federation. The bond was acquired by Russia’s National Wealth Fund (NWF) pursuant to a decision by the Russian Government to provide assistance to Ukraine. In public statements at the time the bond was issued, Russia’s Finance Minister, Mr. Siluanov, explained that assistance was being provided via the NWF because the funds had not been appropriated in the federal budget, ruling out a direct intergovernmental credit. The IMF staff is of the view that the Eurobond is an official claim for the purposes of the IMF’s policy on arrears to official bilateral creditors. |
| Keywords: | Bonds;Bond issues;Russian Federation;Sovereign wealth funds;External payments arrears;Fund policies;Press releases;Ukraine; |
| Date: | 2015–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/344&r=tra |
| By: | International Monetary Fund |
| Abstract: | This Selected Issues paper analyzes income convergence and medium-term growth potential for Estonia. Estonia’s potential growth is projected to average some 3 percent over the next five years and 2.75 percent over the next two decades, implying continued income convergence with European Union levels, albeit at only half its historical pace. A number of policy enhancements could lift growth above this central projection. These include a greater operational policy focus on raising productivity growth, scaling up a number of envisaged pro-growth programs, supporting the upgrading of traditional industries as a second leg of innovation policy, and fully restoring Estonia’s high investment. |
| Keywords: | Economic growth;Gross domestic product;Productivity;Exports;Employment;Selected Issues Papers;Estonia; |
| Date: | 2015–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/337&r=tra |
| By: | Hyoung-kyu Chey (National Graduate Institute for Policy Studies); Yu Wai Vic Li (Hong Kong Institute of Education) |
| Abstract: | Despite the central bank's crucial position in the economy, as the issuer of the currency and the body responsible for monetary policy, its preferences regarding currency internationalization and its roles in that process have rarely been analyzed in the literature. This study attempts to fill this critical gap by bringing the central bank into the study of currency internationalization. A conventional understanding of currency internationalization is that it tends to reduce monetary policy autonomy, which implies a natural tendency of the central bank to oppose it. This study shows, however, that currency internationalization does not necessarily reduce the central bank's monetary policy autonomy, and may in fact even strengthen it. It shows that currency internationalization is likely to strengthen the central bank's independence as well. Based on these findings, this study argues that a central bank with weak monetary policy autonomy and low independence is more likely to support the internationalization of its country's currency. These arguments are empirically verified, mainly by in-depth analysis of the case of the People's Bank of China and the renminbi. |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ngi:dpaper:15-23&r=tra |
| By: | Michal Bernad Pietrzak (Nicolaus Copernicus University, Poland); Adam P. Balcerzak (Nicolaus Copernicus University, Poland) |
| Abstract: | The research objective of the article is to analyse the impact of changes in the level of entrepreneurship and business investments on unemployment in Poland with the application of spatial econometrics methodology. A spatial SAR model was used to model unemployment, since this phenomenon exhibits the presence of positive spatial dependence. The research was done for 66 regions at NUTS 3 level for the year 2015. In order to provide interpretations of the results measures of average impact such as average direct impact, average indirect impact and average induced impact were applied. The obtained results indicate a positive impact of entrepreneurship and investment on decline in unemployment rate and improvement of Poland’s socio-economic situation. |
| Keywords: | spatial econometrics, SAR model, spatial dependence, unemployment, entrepreneurship, investments |
| JEL: | C21 E24 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2016:no2&r=tra |
| By: | Marek Zinecker (Brno University of Technology, Czech Republic); Adam P. Balcerzak (Nicolaus Copernicus University, Poland); Marcin Faldziñski (Nicolaus Copernicus University, Poland); Michal Bernad Pietrzak (Nicolaus Copernicus University, Poland); Tomáš Meluzín (Brno University of Technology, Czech Republic) |
| Abstract: | The phenomenon of growing capital market linkages is a significant exogenous factor affecting the effectiveness of national economic policies and risk management processes in enterprises. As a result the identification of interdependencies among capital markets is important both from the macro and microeconomic perspective. In this context the main aim of this article is to examine the relations among capital markets of Poland, Czech Republic and Germany. In the research DCC-GARCH model with the t-student conditional distribution was applied. The analysis was conducted for the years 1997-2015. The research findings confirmed significant interdependencies among analysed capital markets, which were evaluated here by conditional correlations. |
| Keywords: | interdependences among capital markets, conditional variance and correlations, DCC-GARCH model |
| JEL: | G15 C58 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:pes:wpaper:2016:no4&r=tra |
| By: | Sen, Hüseyin (BOFIT); Kaya, Ayse (BOFIT) |
| Abstract: | This study empirically examines the validity of the twin and triple deficits hypotheses using bootstrap panel Granger causality analysis and an annual panel data set of six post-communist countries (Russia, Poland, Ukraine, Romania, the Czech Republic, and Hungary) from 1994 to 2012. Our findings, based on panel data analysis under cross-sectional dependence and country-specific heterogeneity, support neither the twin deficits hypothesis nor its extended version, the triple deficits hypothesis, for any of the countries considered. In other words, we find no Granger-causal relationship between budget deficits and trade (or current account) deficits or among budget deficits, private savings-investment deficits, and trade deficits. |
| Keywords: | macroeconomic policy; fiscal policy; twin deficits; triple deficits; post-communist countries; transition economies; bootstrap panel granger causality test |
| JEL: | E60 F30 F32 H62 |
| Date: | 2016–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2016_003&r=tra |
| By: | BLINOV, Sergey |
| Abstract: | The Ruble exchange rate has been fluctuating hugely. The problem now is not so much the Ruble's weakness as instability of its exchange rate, volatility. The management of the Central Bank claims that stabilization of the Ruble exchange rate is not possible though it is the responsibility of the Bank of Russia under the Constitution. As a matter of fact, any country's Central Bank has two methods of stabilizing the exchange rate available to it. Firstly, «adaptive» approach to stabilization may be adopted. In this case, the Central Bank, as it were, «adjusts itself» to the tendencies unfolding in the market, without being active in trying to influence them. Secondly, the Central Bank may use an «active» way of stabilizing the exchange rate. In such a case, it needs to influence the exchange rate without resorting to foreign exchange interventions. Both methods, the adaptive one and the active one, do not require gold or foreign exchange reserves to be spent. It is even the other way round, - the reserves become replenished, while economy gets an impetus for growth. |
| Keywords: | Monetary Policy, Central Banking, Business Cycles, International Finance, Foreign Exchange |
| JEL: | E30 E52 E58 E65 F30 F31 |
| Date: | 2016–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:69673&r=tra |
| By: | Giuntella, Osea (University of Oxford); Han, Wei (University of Oxford); Mazzonna, Fabrizio (USI Università della Svizzera Italiana) |
| Abstract: | This paper analyzes the effects of sleep duration on cognitive skills and depression symptoms of older workers in China. Cognitive skills and mental health have been associated with sleep duration and are known to be strongly related to economic behavior and performance. However, causal evidence is lacking and little is known about sleep deprivation in developing countries. We exploit the relationship between circadian rhythms and bedtime to identify the effects of sleep using sunset time as an instrument. Using the Chinese Health and Retirement Longitudinal Study, we show that a later sunset time reduces significantly sleep duration and that sleep duration increases cognitive skills and eases depression symptoms of workers aged over 45 years. The results are driven by employed individuals living in urban areas, who are more likely to be constrained by rigid working schedules. On the contrary, we find no evidence of significant effects on self-employed and farmers. |
| Keywords: | sleep deprivation, cognitive skills, risky behaviors |
| JEL: | I12 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9774&r=tra |