nep-tra New Economics Papers
on Transition Economics
Issue of 2016‒03‒23
25 papers chosen by
J. David Brown
United States Census Bureau

  1. Economic Growth and Convergence, Applied Especially to China By Robert J. Barro
  2. A Convergence Process in Household Credit in Central and Eastern Europe By Sainsot, Robin
  3. The impact of financial crisis and low inflation environment on short-term inflation expectations in Poland By Tomasz Łyziak
  4. Quantifying the Effects of Financialisation and Leverage in China By Sun, Lixin
  5. The Nature of Swedish-Russian Capital Flows By Becker, Torbjörn
  6. Bank ownership and cost efficiency in Russia, revisited By Mamonov, Mikhail; Vernikov, Andrei
  7. The impact of international swap lines on stock returns of banks in emerging markets By Andries, Alin Marius; Fischer, Andreas M; Yesin, Pinar
  8. What We Learn from China's Rising Shadow Banking: Exploring the Nexus of Monetary Tightening and Banks' Role in Entrusted Lending By Kaiji Chen; Jue Ren; Tao Zha
  9. EU Accession and Foreign Owned Firms in Bulgaria By Zadia M. Feliciano; Nadia Doytch
  10. Liquidity Regulation and Unintended Financial Transformation in China By Kinda Cheryl Hachem; Zheng Michael Song
  11. Improving Energy Efficiency and Reducing Emissions through Intelligent Railway Station Buildings By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  12. Large-scale transition of economic systems: Do CEECs converge towards western prototypes? By Ahlborn, Markus; Ahrens, Joachim; Schweickert, Rainer
  13. The Evolution of the Chinese Housing Market and Its Impact on Base Metal Prices By Mark Kruger; Kun Mo; Benjamin Sawatzky
  14. Hong Kong - Shanghai Connect / Hong Kong - Beijing Disconnect (?), Scaling the Great Wall of Chinese Securities Trading Costs By Ravi Kashyap
  15. Time allocation and performance: the case of Chinese entrepreneurs By Talavera, Oleksandr; Xiong, Lin; Weir, Charlie
  16. Vietnam's labor market institutions, regulations, and interventions : helping people grasp work opportunities in a risky world By Schmillen,Achim Daniel; Packard,Truman G.
  17. Contractions in Chinese fertility and savings: long run domestic and global implications By Jane Golley; Rod Tyers; Yixiao Zhou
  18. China’s Economic Diplomacy and the Politics-Trade Nexus By Fuchs, Andreas
  19. Expected returns and idiosyncratic risk: Industry-level evidence from Russia By Kinnunen, Jyri; Martikainen, Minna
  20. The Potential Benefits of Agricultural Adaptation to Warming in China in the Long Run By Jikun Huang; Kaixing Huang; Jinxia Wang
  21. Is it worth issuing bonds in China? Evidence from stock market reactions By Klein, Paul-Olivier; Weill, Laurent
  22. Mandatory Retirement and the Consumption Puzzle: Prices Decline or Quantities Decline? By Yingying Dong; Dennis Yang
  23. Government Wealth Funds and Monetary Policy By Sergey Sinelnikov-Murylev; Pavel Trunin
  24. Lost in Transition? Declining Returns to Education in Vietnam By Tinh Doan; Tran Quang Tuyen; Le Quan
  25. Controlling SO2 emissions in China: A panel data analysis of the 11th Five-Year Plan By Teng Ma; Kenji Takeuchi

  1. By: Robert J. Barro
    Abstract: From the perspective of conditional convergence, China’s GDP growth rate since 1990 has been surprisingly high. However, China cannot deviate forever from the global historical experience, and the per capita growth rate is likely to fall soon from around 8% per year to a range of 3 4%. China can be viewed as a middle-income convergence-success story, grouped with Costa Rica, Indonesia, Peru, Thailand, and Uruguay. Upper-income convergence successes comprise Chile, Hong Kong, Ireland, Malaysia, Poland, Singapore, South Korea, and Taiwan. China’s transition from middle- to upper-income status should not be hindered by a middle-income trap, which seems not to exist. The cross-country dispersion of the log of per capita GDP shows no trend since 1870 for 25 countries with long-term data. This group excludes emerging-market countries such as China and India. For 34 countries with data since 1896, there is clear evidence of declining dispersion starting around 1980. This pattern reflects especially the incorporation of China and India into the world market economy.
    JEL: O11 O4 O47
    Date: 2016–01
  2. By: Sainsot, Robin
    Abstract: The liberalisation of Eastern Europe’s market during the 1990s and the 2004 EU enlargement have had a great impact on the economies of Central and Eastern Europe (CEE). Indeed, prior to these events, the financial system and household credit markets in CEE were underdeveloped. Nonetheless, it appeared to numerous economists that the development of the CEE financial system and credit markets was following an intensely positive trend, raising the question of sustainability. Many variables impact the level and growth rate of credit; several economists point out that a convergence process might be one of the most important. Using a descriptive statistics approach, it seems likely that a convergence process began during the 1990s, when the CEE countries opened their economies. However, it also seems that the main driver of this household credit convergence process is the GDP per capita convergence process. Indeed, credit to households and GDP per capita have followed broadly similar tendencies over the last 20 years and it has been shown in the literature that they appear to influence each other. The consistency of this potential convergence process is also confirmed by the breakdown of household credit by type and maturity. There is a tendency towards similar household credit markets in Europe. However, it seems that this potential convergence process was slowed down by the financial crisis. Fortunately, the crisis also stabilised the share of loans in foreign currency in CEE countries. This might add more stability to credit markets in Eastern Europe.
    Date: 2015–10
  3. By: Tomasz Łyziak
    Abstract: To what extent financial crisis whose sharp face begun in 2008 and low inflation environment that started in 2013 affect inflation expectations in Poland? Have inflation expectations of the private sector become more forward-looking? Is monetary policy still able to influence expectations as compared with the pre-crisis period? Those are the main questions addressed in this paper. To answer them we analyse survey-based measures of inflation expectations of consumers, enterprises and financial sector analysts. Estimation of simple and extended hybrid models of inflation expectations combined with verification of orthogonality of expectational errors with respect to available information leads us to the conclusion that since 2008 inflation expectations of enterprises and financial sector analysts have become more forward-looking, better exploiting available information and more sensitive to interest rate changes and developments in the real economy. At the same time formation of consumer inflation expectations has not been affected significantly.
    Keywords: Inflation expectations, survey, Poland.
    JEL: D84 E31
    Date: 2016
  4. By: Sun, Lixin
    Abstract: This paper attempts to examine the effects of financialisation and leverage on China’s economic growth and income inequality. The empirical results suggest that the effects of the financialisation indicators are ambiguous and weak; however the leverage indicators do have negative impacts. We find that the ratio of non-financial private debt to GDP has significantly negative impact on China’s growth, whereas the effects of the ratio of public debt to GDP are insignificant. Moreover, at the disaggregated level of non-financial private debt, it is the higher non-financial corporate debt level rather than the household debt level that remarkably undermines China’s economic growth. Finally, we find that the rise in the household debt level could significantly reduce the income inequality, and the ratio of M2 to GDP is positively related with the income inequality in China.
    Keywords: Leverage; Financialisation; Economic Growth; Income Inequality; China’s Economy
    JEL: G10 H63 O53
    Date: 2015–12
  5. By: Becker, Torbjörn (Stockholm Institute of Transition Economics)
    Abstract: This paper provides a detailed investigation of the investment flows between Russia and Sweden in the last decade and a half. The bilateral data consists of both aggregate macro data and company level greenfield and M&A FDI. The relatively large flows from Sweden to Russia and insignificant flows in the other direction support the hypotheses that investments tend to go from higher income countries to lower income countries and from smaller markets to larger. Investment flows have grown in line with trade, consistent with the idea that international investments and exports often are compliments rather than substitutes. The investments from Sweden to Russia also show that FDI has been a more stable source of foreign funding than portfolio flows as has been argued both in the theoretical and empirical literature; Whereas portfolio flows have declined significantly since the global crisis in 2008, the stock of FDI has continued to increase. The paper also argues that it is hard to predict aggregate bilateral flows with great precision, in particular for such a large economy as the Russian, and empirical models tend to generate expected flows from Sweden to Russia that are larger than the ones observed. In terms of reasons for FDI between the two countries, horizontal FDI seem to dominate by a wide margin. However, there are a few examples of vertical FDI in resource intensive sectors in Russia, and limited amounts of complex FDI in Sweden by Russian companies. In the challenging environment Russia is currently facing due to low international oil prices and sanctions it will be hard to attract new FDI. Although it may be tempting to use short-term tax exemptions or barriers to trade to induce FDI, sustainable long-run policies should focus on fundamental reforms of the institutions that reduce corruption, contribute to the rule of law and limit excess bureaucratic burdens. This will not only make Russia attractive to foreign investors but also encourage domestic innovators and entrepreneurs to help modernize and diversify the economy.
    Keywords: FDI; Capital flows; Gravity model; Sweden; Russia
    JEL: F21 F23 F41
    Date: 2016–03–10
  6. By: Mamonov, Mikhail; Vernikov, Andrei
    Abstract: This paper considers the comparative efficiency of public, private, and foreign banks in Rus-sia, a transition economy with several unusual features. We perform stochastic frontier anal-ysis (SFA) of Russian bank-level quarterly data over the period 2005–2013. The method of computation of comparative cost efficiency is amended to control for the effect of revalua-tion of foreign currency items in bank balance sheets. Public banks are split into core and other state-controlled banks. Employing the generalized method of moments, we estimate a set of distance functions that measure the observed differences in SFA scores of banks and bank clusters (heterogeneity in risk preference and asset structure) to explain changes in bank efficiency rankings. Our results for comparative Russian bank efficiency show higher efficiency scores, less volatility, and narrower spreads between the scores of different bank types than in previous studies. Foreign banks appear to be the least cost-efficient market participants, while core state banks on average are nearly as efficient as private domestic banks. We suggest that foreign banks gain cost-efficiency when they increase their loans-to-assets ratios above the sample median level. Core state banks, conversely, lead in terms of cost efficiency when their loans-to-assets ratio falls below the sample median level. The presented approach is potentially applicable to analysis of bank efficiency in other dollarized emerging markets.
    Keywords: banks, comparative efficiency, SFA, state-controlled banks, Russia
    JEL: G21 P23 P34 P52
    Date: 2015–07–27
  7. By: Andries, Alin Marius; Fischer, Andreas M; Yesin, Pinar
    Abstract: 2015 Abstract This paper investigates the impact of international swap lines on stock returns using data from banks in emerging markets. The analysis shows that swap lines by the Swiss National Bank (SNB) had a positive impact on bank stocks in Central and Eastern Europe. It then highlights the importance of individual bank characteristics in identifying the impact of swap lines on bank stocks. Bank-level evidence suggests that stock prices of local and less-well capitalized banks as well as banks with high foreign currency exposures and high reliance on short-term funding responded more strongly to SNB swap lines. This new evidence is consistent with the view that swap lines not only enhanced market liquidity but also reduced risks associated with associated with micro-prudential issues.
    Keywords: emerging markets; foreign currency loans; International Swap lines
    JEL: F15 F21 F32 F36 G15
    Date: 2016–03
  8. By: Kaiji Chen; Jue Ren; Tao Zha
    Abstract: We argue that China's rising shadow banking was inextricably linked to potential balance-sheet risks in the banking system. We substantiate this argument with three didactic findings: (1) commercial banks in general were prone to engage in channeling risky entrusted loans; (2) shadow banking through entrusted lending masked small banks' exposure to balance-sheet risks; and (3) two well-intended regulations and institutional asymmetry between large and small banks combined to give small banks an incentive to exploit regulatory arbitrage by bringing off-balance-sheet risks into the balance sheet. We reveal these findings by constructing a comprehensive transaction-based loan dataset, providing robust empirical evidence, and developing a theoretical framework to explain the linkages between monetary policy, shadow banking, and traditional banking (the banking system) in China.
    JEL: E02 E5 G11 G12 G28
    Date: 2016–01
  9. By: Zadia M. Feliciano; Nadia Doytch
    Abstract: Bulgaria signed the Europe Association Agreement (EAA) in 1995 and the European Union accession treaty in 2005. Accession had the effect of increasing FDI in Bulgaria. We analyze World Bank BEEPS firm level data for 2007 to better understand characteristics and performance of foreign firms in Bulgaria. We estimate linear probability and logit models to determine the likelihood a firm is foreign in Bulgaria. Regressions show foreign manufacturing firms in Bulgaria are larger than domestic firms, have lower capital to labor ratios and are more likely to export. Foreign service sector firms are larger than domestic firms, have lower capital to labor ratios, are more likely to export and to locate in Sofia, the capital. Our analysis points to limited success of foreign firms in Bulgaria. Regressions show foreign manufacturing firms do not have higher sales growth and made less capital investments than domestic firms. Foreign firms in the service sector did not experience faster sales growth or had greater capital investments than domestic firms. Institutional indicators show manufacturing and service sector firms with larger fractions of exports relative to sales had a greater number of visits from tax officials. This suggests that exporting firms receive larger scrutiny than other firms, which represents a challenge to foreign firms in Bulgaria.
    JEL: F15 F21 F23
    Date: 2016–01
  10. By: Kinda Cheryl Hachem; Zheng Michael Song
    Abstract: China increased bank liquidity standards in the late 2000s. The interbank market became tighter and more volatile and credit soared, contrary to expectations. To explain this, we argue that shadow banking developed among Chinaʼs small and medium-sized banks to evade the higher liquidity standards. The shadow banks, which were not subject to interest rate ceilings on traditional bank deposits, then poached deposits from big commercial banks. In response, big banks used their substantial interbank market power to restrict credit to the shadow banks and increased their lending to non-financials. A calibration of our unified framework generates a quantitatively important credit boom and higher and more volatile interbank interest rates as unintended consequences of higher liquidity standards.
    JEL: E44 G28
    Date: 2016–01
  11. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB)
    Abstract: Buildings in the People’s Republic of China (PRC) consume 21% of the total energy produced in the country. This study analyzes and proposes feasible energy-saving and emission-reducing solutions for domestic railway stations in the PRC. The use of intelligent building controls support reduction of energy consumption, minimization or elimination of energy wastes, and cost savings. Strong institutional mechanisms and railway building management methods and policies also promote technological innovation. Moreover, these are necessary to balance the interests of multiple parties to be able to achieve energy efficiency in railway station buildings in the PRC.
    Keywords: prc railway stations, intelligent railway stations, energy efficiency, energy consumption, emissions reduction, energy savings, policy recommendations, energy assessment, railway station design, adb ta 7916, china railway corporation, case studies
    Date: 2015–09
  12. By: Ahlborn, Markus; Ahrens, Joachim; Schweickert, Rainer
    Abstract: In order to identify convergence patterns among the group of Central and Eastern European Countries (CEECs) we analyze clusters of traditional OECD countries, i.e. EU-15 plus Norway and Switzerland, Anglo-Saxon non-EU countries plus Japan, and CEECs based on macro data on government regulation and spending instead of micro data on firm relations and market characteristics as is usually applied in Varieties-of-Capitalism (VoC) analysis. This framework is supposed to incorporate some of the critique that has been expressed towards the traditional VoCapproach, especially its ignorance of government spending and performance. We acknowledge for the transition aspect by looking at cluster history and principal component analysis for periods of transition. Our analysis reveals that there is consolidation rather than convergence with CEECs being divided in clusters leaning towards CME and LME prototypes respectively. Overall, there are worlds of redistribution within which clusters differ with respect to their mix of - negatively correlated - regulation and innovation. Interestingly, CEECs do not mix up with Mediterranean MMEs, which indeed provide a kind of worst case setting, while Scandinavian CMEs as well as traditional LMEs provide a kind of role model within their respective worlds of redistribution.
    Keywords: varieties of capitalism,worlds of welfare states,government spending,regulation,cluster analysis,transition,economic systems,CEECs
    JEL: H10 P10 P51
    Date: 2016
  13. By: Mark Kruger; Kun Mo; Benjamin Sawatzky
    Abstract: The Chinese housing market has grown rapidly following its liberalization in the 1990s, generating significant economic activity and demand for base metals. In this paper, we discuss the evolution of the Chinese housing market and quantify its importance for the overall Chinese economy and its linkages to base metal prices. We estimate that the housing boom was responsible for roughly a quarter of the 85 per cent increase in base metal prices from 2002 to 2010. Since 2014, however, a substantial inventory overhang has led to a steep correction in the housing market, which in turn has contributed up to a third of the 25 per cent decline in base metal prices. While the drag on metal prices should ease as the Chinese housing market stabilizes, the level of support from this sector will likely remain minimal compared with the experience of the past decade.
    Keywords: International topics
    JEL: Q31 R31
    Date: 2016
  14. By: Ravi Kashyap
    Abstract: We utilize a fundamentally different model of trading costs to look at the effect of the opening of the Hong Kong Shanghai Connect that links the stock exchanges in the two cities, arguably the biggest event in international business and finance since Christopher Columbus set sail for India. We design a novel methodology that compensates for the lack of data on trading costs in China. We estimate trading costs across similar positions on the dual listed set of securities in Hong Kong and China, hoping to provide useful pieces of information to help scale 'The Great Wall of Chinese Securities Trading Costs'. We then compare actual and estimated trading costs on a sample of real orders across the Hong Kong securities in the dual listed pair to establish the accuracy of our measurements. The primary question we seek to address is 'Which market would be better to trade to gain exposure to the same (or similar) set of securities or sectors?' We find that trading costs on Shanghai, which might have been lower than Hong Kong, might have become higher leading up to the Connect. What remains to be seen is whether this increase in trading costs is a temporary equilibrium due to the frenzy to gain exposure to Chinese securities or whether this phenomenon will persist once the two markets start becoming more and more tightly coupled. It would be interesting to see if this pioneering policy will lead to securities exchanges across the globe linking up one another, creating a trade anything, anywhere and anytime marketplace. Looking beyond mere trading costs, such studies can be used to gather some evidence on what effect the mode of governance and other aspects of life in one country have on another country, once they start joining up their financial markets.
    Date: 2016–03
  15. By: Talavera, Oleksandr; Xiong, Lin; Weir, Charlie
    Abstract: This paper analyses the effect of time allocation on the financial performance of entrepreneurial firms. We apply the Lewbel (2012) estimator to a pooled dataset of Chinese private manufacturing firms that are managed by their owners. Time is allocated between management, networking and study activities. After accounting for endogeneity, we find an inverted U-shaped relationship between management hours and firm performance and between networking and firm performance. However, no relationship between time spent studying and firm performance is observed. We also find that the managing hours-performance relationship is particularly strong for companies managed by entrepreneurs who own more than 75% of share, for companies that are managed by owners with previous experience, for male entrepreneurs and for smaller sized firms.
    Keywords: Time allocation, owner manager businesses, China
    JEL: L26 M21 O53
    Date: 2016–02–29
  16. By: Schmillen,Achim Daniel; Packard,Truman G.
    Abstract: Over the past 30 years, Vietnam has experienced significant shifts of employment away from agriculture toward manufacturing and services, away from household enterprises toward registered and regulated businesses, and away from state-owned enterprises toward private firms. This paper argues that for these processes to continue in the future, appropriately designed and implemented labor market policies need to be in place, including labor market regulations that protect workers but do not inhibit creative destruction and creation of formal sector jobs; labor market interventions that improve workers'human capital, eliminate information asymmetries, and are fiscally sustainable; and labor market institutions that give voice to workers and employers. As a part of all of these measures, Vietnam will also have to renew its efforts to integrate vulnerable groups into the labor market.
    Keywords: Banks&Banking Reform,Labor Policies,Markets and Market Access,Labor Markets,Labor Standards
    Date: 2016–03–01
  17. By: Jane Golley; Rod Tyers; Yixiao Zhou
    Abstract: Following three decades of rapid but unbalanced economic growth, China's reform and policy agenda are set to rebalance the economy toward consumption while maintaining a rate of GDP growth near seven per cent. Among the headwinds it faces is a demographic contraction that brings slower, and possibly negative, labour force growth and relatively rapid ageing. While the lower saving rates that result from consumption-oriented policies and rising aged dependency may contribute to a rebalancing of the economy, in the long run they will reduce both GDP growth and per capita income. Moreover, while an effective transition from the one-child policy to a two-child policy would help sustain growth and eventually mitigate the aged dependency problem, it would set real per capita income on a still lower path. These conundrums are examined using a global economic and demographic model, which embodies the main channels through which fertility and saving rates impact on economic performance. The results quantify the associated trade-offs and show that continuing demographic and saving contractions in China would alter the trajectory of the global economy as well.
    Keywords: China, demography, imbalances, spill-overs, global effects
    JEL: F42 F43 F47
    Date: 2016–03
  18. By: Fuchs, Andreas
    Abstract: This article reviews the literature on the linkages between political tensions, economic diplomacy and international trade in the light of China’s rise in the global economy. The existing scholarly work suggests that economic diplomacy should be more pivotal in economic exchange with China than with Western market economies. In an econometric test, I analyze how diplomatic tensions, measured through foreign dignitaries’ meetings with the Dalai Lama, affect the likelihood of an official visit from a Chinese leader. The results show that the likelihood of the Chinese leadership traveling to a country is 13.6 percent lower if the country’s government receives the Dalai Lama in a given year but increases in the following year, supposedly to restore ties. This finding underlines that economic diplomacy is an important channel linking political climate and economic exchange between nations.
    Keywords: economic diplomacy; international trade; embassies; political climate; state visits; leadership travel; emerging economies; China; Dalai Lama; Tibet
    Date: 2016–03–08
  19. By: Kinnunen, Jyri; Martikainen, Minna
    Abstract: ​In this paper, we explore a relation between expected returns and idiosyncratic risk. As in many emerging markets, investors in the Russian stock market cannot fully diversify their portfolios due to transaction costs, information gathering and processing costs, and short-comings in investor protection. This implies that investors demand a premium for idiosyncratic risk – unique asset-specific risk plays a role in investment decisions. We estimate the price of idiosyncratic risk using MIDAS regressions and a cross-section of Russian industry portfolios. We find that idiosyncratic risk commands an economically and statistically significant risk premium. The results remain unaffected after controlling for global pricing factors and short-term return reversal.
    Keywords: idiosyncratic risk, industry risk, cross-sectional returns, MIDAS, Russia
    JEL: G12
    Date: 2015–10–30
  20. By: Jikun Huang (Center for Chinese Agricultural Policy at Chinese Academy of Sciences, Institute of Geographical Sciences and Natural Resources Research); Kaixing Huang (School of Economics, University of Adelaide); Jinxia Wang (School of Advanced Agricultural Sciences, Peking University)
    Abstract: Understanding to what extent agriculture can adapt to climate change and the determinants of farmers' adaptation capability are of paramount importance from a policy perspective, especially for developing countries where agricultural production is potentially most vulnerable to climate change. Based on a panel of household survey data from a large sample in rural China, the present article adopts a panel approach to estimate the potential benefits of adaptation and to identify the determinants of farmers' adaptation capability. Empirical modeling results suggest that, under the most likely climate change scenario, the potential impacts of warming on agricultural profits will be rather mild (8.4 percent) by the end of this century if adaptations are taken into account. In addition, for all potential warming scenarios, adaptations are expected to consistently offset about 50 percent of the potential damages caused by global warming. Finally, households with higher labor and capital intensities are better placed to adapt to global warming.
    Keywords: climate change impact, agriculture, adaptation capability
    JEL: Q15 Q51 Q54
    Date: 2016–03
  21. By: Klein, Paul-Olivier; Weill, Laurent
    Abstract: There has been a considerable expansion of corporate bond markets in China in the recent years. The objective of this study is to examine the stock market reaction following bond issuance by Chinese companies. In addition to analyzing for positive or negative reactions to bond issues, we consider the influences of ownership and management characteristics on the stock market reaction. Applying an event-study methodology to a sample of 481 bond issues of 347 Chinese companies over the period 2009–2013, the univariate results show that Chinese bond issues typically generate a positive stock market reaction. The reaction is only significantly positive, however, in the case of central state-owned companies (as opposed to those owned by local or provincial governments). The multivariate results indicate that insider ownership influences stock market reaction to a bond issue, while management characteristics have no discernable impact.
    Keywords: China, emerging markets, corporate bonds, event study
    JEL: G14 P34
    Date: 2015–12–15
  22. By: Yingying Dong (University of California, Irvine); Dennis Yang (University of virginia)
    Abstract: This paper investigates household consumption changes at retirement by utilizing a comprehensive, diary-based household survey from China. The survey contains both consumption quantity and price information, which permits separating quantity changes from price changes. The mandatory retirement policy in China provides a quasi-experimental setting for identification of the true causal effects of fully anticipated retirement. Using regression discontinuity models, we show that food expenditure declines at retirement, particularly among the low-education group, and that the decline is driven by price declines instead of quantity declines. Shopping time for food increases at retirement, consistent with the price and quantity changes.
    Keywords: Retirement-consumption puzzle, Manadatory retirement, regression discontinuity, consumption vs. expenditure, time use, home production
    JEL: J26 C21
    Date: 2016–02
  23. By: Sergey Sinelnikov-Murylev (Russian Foreign Trade Academy); Pavel Trunin (RANEPA)
    Abstract: Both economic theory and economic practice reveal a high degree of interdependence between fiscal and monetary policies. This relationship is especially evident if the government accumulates a considerable amount of money in its accounts with the central bank. The article analyzes the impact of the formation and spending of the Reserve Fund and the National Wealth Fund on the monetary policy of the Bank of Russia. This effect is considered from the point of view of the current economic crisis and the need to spend resources accumulated in sovereign wealth funds. Length: 13 pages
    Keywords: Russian economy, fiscal policy, monetary policy, sovereign wealth funds, forex interventions, international reserves
    JEL: E43 E52 E62 E63
    Date: 2016
  24. By: Tinh Doan (University of Waikato); Tran Quang Tuyen (VNU University of Economics and Business); Le Quan (VNU University of Economics and Business)
    Abstract: There is evidence of a rapid increase in the returns to education in Vietnam in the 1990s and 2000s. There was a substantial change in education policy in the 2000s, especially opening up education opportunities for education providers to expand educational facilities and training. These changes could lead to a decline in the returns to education. To provide up-to-date estimates of the returns, we re-visit the returns using updated large-scale survey data to 2014. We apply the Heckman selection estimators to correct for selection bias and find that the return to education in Vietnam increased quickly up to the global financial crisis in 2008/2009 and declined sharply thereafter. This raises at least two questions: is the higher-educated labour force oversupplied or is there a large distortion in the labour market?
    Keywords: economic transformation; returns to education; education supply; wage setting; Vietnam
    JEL: C52 J21 J31
    Date: 2016–03–07
  25. By: Teng Ma (Graduate School of Economics, Kobe University); Kenji Takeuchi (Graduate School of Economics, Kobe University)
    Abstract: We investigate the impact of policy measures to reduce SO2 emissions during 11th Five-Year Plan of China (2006-2010). By using a provincial-level panel data set, we find that installation of the flue-gas desulfurization equipment and closure of small coal- fired power plants contributed to a statistically significant reduction in SO2 emissions. While estimation results suggest that these two policy measures played an important role in reducing SO 2 emissions in China during this period, the size of the estimated coefficients shows that the effects might have been weaker than those predicted by ex-ante cost-benefit analysis.
    Keywords: SO2; Air pollution; Panel data; China; 11th Five-Year Plan.
    JEL: L94 P28 Q53 Q56
    Date: 2016–03

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