nep-tra New Economics Papers
on Transition Economics
Issue of 2017‒04‒30
fourteen papers chosen by
J. David Brown
United States Census Bureau

  1. Framework for analyzing and assessing the system of governance and the level of agrarian sustainability in Bulgaria and China By Bachev, Hrabrin; Ivanov, Bodjidar; Toteva, Desislava; Sokolova, Emilia
  2. Exchange rate movements and export market dynamics: Evidence from China By Huang, Xiaobing
  3. Productivity gains from agglomeration and migration in Chinese cities over 2002-2013 By Pierre-Philippe Combes; Sylvie Démurger; Shi Li
  4. Ukraine; 2016 Article IV Consultation and third review under the Extended Arrangement, Requests for a Waiver of Non-Observance of a Performance Criterion, Waiver of Applicability, Rephasing of Access and Financing Assurances Review-Press Release; Staff Report; and Statement by the Executive Director for Ukraine By International Monetary Fund.
  5. To Migrate With or Without Ones’ Children in China - That is the Question By Yiwen Chen; Vincent Fromentin; Ioana Salagean; Benteng Zou
  6. Slovak Republic; 2017 Article IV Consultation-Press Release; Staff Report; and Informational Annex for Slovak Republic By International Monetary Fund.
  7. The Hukou Impact on the Chinese Wage Structure By Christian Dreger; Yanqun Zhang
  8. China's GDP Growth May be Understated By Hunter Clark; Maxim Pinkovskiy; Xavier Sala-i-Martin
  9. Expenditure responses, policy interventions and heterogeneous welfare effects in Hungary during the 2000s By Zsombor Cseres-Gergely; Gyorgy Molnar; Tibor Szabo
  10. Cyclical sensitivity of public finances in former Yugoslavian countries (2001–2014). By Marko Crnogorac; Santiago Lago Peñas
  11. The Multiple Effects of Child Health Insurance in Vietnam By Dang, Thang
  12. Slovak Republic; Selected Issues By International Monetary Fund.
  13. A Spatial Electricity Market Model for the Power System of Kazakhstan By Makpal Assembayeva; Jonas Egerer; Roman Mendelevitch; Nurkhat Zhakiyev
  14. Ukraine; Selected Issues By International Monetary Fund.

  1. By: Bachev, Hrabrin; Ivanov, Bodjidar; Toteva, Desislava; Sokolova, Emilia
    Abstract: This framework is a part of a bilateral research cooperation project between Bulgaria and China on „Governing and Assessment of Agrarian Sustainability - Experiences, Challenges, and Lessons from Bulgaria and China“ funded by the Bulgarian Science Fund and the Ministry of Science and Technology of the People's Republic of China ( First, major definitions are presented. After that a Framework for analyzing the system of governance of agrarian sustainability is outlined. Finally, a Framework for assessing sustainability levels of agriculture is presented. Theoretical and mythological approaches are previously presented by another publication (Bachev, Ivanov, Toteva, Sokolova). This framework is being used for analyzing the system of governance and the level of agrarian sustainability in Bulgaria and China, and comparative analysis between two countries
    Keywords: agrarian sustainability, governance, sustainability indicators, Bulgaria, China
    JEL: Q1 Q10 Q12 Q13 Q14 Q15 Q18
    Date: 2017–04–01
  2. By: Huang, Xiaobing
    Abstract: This paper highlights the relationship between foreign exchange rate fluctuations and firms' export market dynamics using a Chinese firm-level production data and a firm-level trade data over the period of 2000-2006. The author adopts a discrete-time survival model in his empirical investigation and further executes several extensions and robustness checks to the baseline results. The main results of the paper can be summarized as follows: First, an exchange rate appreciation increases the likelihood of export market exit, reduces the capability of export market survival and decreases the probability of export market entry. Second, high productivity firms are less likely to exit from export markets and more likely to enter and survive in export markets in the period of exchange rate appreciation. Third, exchange rate appreciation decreases the likelihood of export market entering and increases the likelihood of export market exiting more for private-owned firms, young firms and non-eastern firms. Finally, other sources of heterogeneity, such as extensive margins, import demand elasticity, different destinations, U.S. dollar peg, and the liberalization of trading rights also matter regarding the effect of exchange rate changes.
    Keywords: exchange rate movements,export market dynamics,firm heterogeneity,China
    JEL: F14 F31 F32 F41
    Date: 2017
  3. By: Pierre-Philippe Combes (Univ Lyon, CNRS, GATE L-SE UMR 5824, 93 chemin des Mouilles, F-69130 Ecully, France; Sciences Po, Department of Economics, 28, Rue des Saints-Pères, 75007 Paris, France. Also research fellow at the CEPR.); Sylvie Démurger (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France. Also research fellow at IZA, Bonn, Germany); Shi Li (School of Business, Beijing Normal University, China; IZA, Bonn, Germany)
    Abstract: We evaluate the evolution of productivity gains from Chinese cities over time, from 2002 to 2013. In 2002, rural migrants were exerting a strong positive externality on natives' earnings, which were also higher when access to foreign markets through access to sea was higher. In 2007 and then further in 2013, city size (employment density but also land area) has become the crucial determinant of productivity whereas market access, internal or external, plays no direct role. Rural migrants still enhance natives' earnings, though the effect is more than hal f lower than in 2002. Urban gains, and their evolution over time, are very similar on total and per hour earnings. Skilled workers and females seem to gain slightly more from cities than unskilled workers and males.
    Keywords: urban development, agglomeration economies, wage disparities, migration, China
    JEL: O18 R12 R23 J31 O53
    Date: 2017
  4. By: International Monetary Fund.
    Abstract: Following the 2014–15 crisis, the economy is growing again and tight fiscal and monetary policies have greatly reduced internal and external imbalances. Inflation has been successfully brought down and reserves—while still being relatively low—have doubled to US$15 billion. The pace of the recovery, however, has been modest, and faster growth is needed if Ukraine is to catch up with its regional peers and lift per capita income levels that have declined to among the lowest in the region.
    Date: 2017–04–04
  5. By: Yiwen Chen (CREA, Université du Luxembourg); Vincent Fromentin (Université de Lorraine, Nancy et CREA, Luxembourg); Ioana Salagean (STATEC, Luxembourg); Benteng Zou (CREA, Université du Luxembourg)
    Abstract: Where should Chinese internal migrant parents locate their school-aged children: migrate with them or leave them behind? And should they invest in private education of their children? Empirical evidence based on the 2009 wave of the Rural-Urban Migration Survey in China (RUMiC) data is inconclusive. We use an overlapping generations model to find a theoretical optimum that maximizes parents’ utility which includes the children’s educational performance. Depending on the educational investment parents make and the relocation cost of children, we provide necessary and sufficient conditions for migrant parents to take their children to migrate and whether they should provide their children with private education. As the choices of migrant parents affect not only their children’s human capital accumulation, but also on the economic potential of their descendants, we present both short- and long-term consequences of the parents decision.
    Keywords: Migrant children; left-behind children; hukou; China; educational performance
    JEL: O15 I31 J13 R23
    Date: 2017
  6. By: International Monetary Fund.
    Abstract: Slovakia is an economic success story. Sustained convergence since 1995 has lifted real per capita GDP to over 70 percent of the European Union average. The post-crisis recovery has been one of the most robust in Europe and GDP growth is projected to pick up further in the medium term, in part from additional foreign investment in the automotive industry. However, with regional disparities and aging pressures among the most severe in Europe, significant challenges remain. The banking sector also faces vulnerabilities from very high exposure to the real estate sector.
    Keywords: Europe;Slovak Republic;
    Date: 2017–03–23
  7. By: Christian Dreger; Yanqun Zhang
    Abstract: Faster urbanization plays a key role in the Chinese economic transformation. However, at the Lewis turning point, the hukou institution constitutes a serious risk to the process, as it restricts the access of migrants to public services offered by cities. To attract further migration, firms started to accept a premium on top of the wage. Thus, the social discrimination introduced by the hukou system is partially compensated by the reactions of market participants, as migrant workers receive additional pay. Based on huge cross sections of private households, this paper provides insights into the size and the evolution of the wage premium. After controlling for standard wage determinants, such as sex, education, experience and ownership of firms, we find that the premium amounts to 7 percent of the hourly wage. Because of the premium, the share of non-wage labor costs is on the rise, especially for low-skilled migrants. To avoid further distortions and reduce inefficiencies, the hukou status should be unified. Migrants should obtain urban hukou as long as they live in cities. They should keep their land use rights when they are in the rural areas. Otherwise, the system could constitute a significant barrier for further urbanization. The removal of institutional bias could restore the link between wages and productivity and improve the allocation of labor.
    Keywords: Chinese economic transformation, wage premium, hukou reform
    JEL: J30 R23 C23
    Date: 2017
  8. By: Hunter Clark; Maxim Pinkovskiy; Xavier Sala-i-Martin
    Abstract: Concerns about the quality of China’s official GDP statistics have been a perennial question in understanding its economic dynamics. We use data on satellite-recorded nighttime lights as an independent benchmark for comparing various published indicators of the state of the Chinese economy. Using the methodology of Pinkovskiy and Sala-i-Martin (2016a and b), we exploit nighttime lights to compute the optimal weights for various Chinese economic indicators in a best unbiased predictor of Chinese growth rates. Our computations of Chinese growth based on optimal weightings of various combinations of economic indicators provide evidence against the hypothesis that the Chinese economy contracted precipitously in late 2015, and are consistent with the rate of Chinese growth being higher than is reported in the official statistics.
    JEL: F0
    Date: 2017–04
  9. By: Zsombor Cseres-Gergely (European Commission, Joint Research Centre and research fellow at Institute of Economics, Centre for Economic and Regional Studies of the Hungarian Academy of Sciences); Gyorgy Molnar (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences); Tibor Szabo (Credit Risk Modeler at Raiffeisen Bank)
    Abstract: VAT rates have changed multiple times and to a relatively great extent in Hungary during the past years. We use the resulting price changes in estimating the price- and income-elasticity of households’ expenditures. As a novelty, we introduce an interaction term in estimating the demand system and show that the own price elasticity of food is increasing with increasing production for own consumption. Based on the estimation results, we compute the average welfare effect of the changes and describe also its heterogeneity within the population. We find that the VAT-reforms in 2006 and 2009 have both decreased the welfare of those in the first income quintile. We also look at the welfare effect of multiple hypothetic reforms such as the decrease of the VAT rate of food and a decrease of utility prices as well as a subsidy to production for own consumption. We find that the best targeted measure is an income-transfer to the low-income unemployed either directly or through participation in the public works scheme.
    Keywords: QUAIDS model, household expenditures, consumer behaviour, compensating variation, simulation, welfare effect, production for own consumption
    JEL: D12 H20 H31
    Date: 2017–01
  10. By: Marko Crnogorac; Santiago Lago Peñas
    Abstract: The aim of this paper is to analyse fiscal policy in former Yugoslavian countries over the period 2001–2014. The contribution of the paper is threefold. First, we build a homogenous database to describe the evolution of main fiscal aggregates in each country, using the same analytical structure. Second, we analyse national tax structures to find if common patterns are still present, or if they have evolved in different ways over time. Third, we pool data to analyse and compute the cyclical sensitivity of budget balance, taxes and expenditure to the output gap. Our results show that tax structures are still similar and that economic cycle is very relevant to explain the dynamics of deficit and expenditure, but not revenues.
    Keywords: Fiscal policy, Government deficit, Business cycle, Yugoslavia.
    JEL: H30 H50 H62
    Date: 2017–04
  11. By: Dang, Thang
    Abstract: This paper estimates multiple effects of tremendous expansion in health insurance coverage for children on medical services utilizations for both children and parents by focusing on Free Care for Children Under Six, a child health insurance program that provides free access to health care practices for children under 6 in Vietnam. Using a regression discontinuity design, the paper finds that child health insurance has considerable positive effects on children’s health care uses whereas it reduces parental health care utilization for some outcomes. In particular, child health health insurance increases the probabilities of public inpatient visit and private outpatient visit by 22.3% and 33% respectively while it rises the frequencies of public inpatient visits and private outpatient visits by 0.32 times and 2.24 times respectively. In contrast, child health insurance reduces a mother’s probabilities of public inpatient visit and public outpatient visit by 32.6% and 27% respectively, number of public inpatient visits by 0.41 times. Also, paternal impacts of child health insurance consists of a 23.2% reduction in the probability of private outpatient visit and a 1.01 time decrease in the frequency of private outpatient visits. The paper significantly provides a more insightful understanding of various impacts of a health policy on health care utilization from developing countries.
    Keywords: Child health insurance; health care utilization; regression discontinuity; Vietnam
    JEL: I12 I13 I18
    Date: 2017–04–19
  12. By: International Monetary Fund.
    Abstract: Selected Issues
    Keywords: Development assistance;European Union;Government expenditures;Pensions;Health care;Selected Issues Papers;Slovak Republic;
    Date: 2017–03–23
  13. By: Makpal Assembayeva; Jonas Egerer; Roman Mendelevitch; Nurkhat Zhakiyev
    Abstract: Kazakhstan envisions a transition towards a green economy in the next decades which poses an immense challenge as the country heavily depends on (hydro-)carbon resources, for both its economy and its energy system. In this context, there is a lack of comprehensive and transparent planning tools to assess possible sustainable development pathways in regard to their technical, economic, and environmental implications. We present such a tool with a comprehensive techno-economic model of the Kazakh electricity system which determines the hourly least-cost generation dispatch based on publicly available data on the technical and economic characteristics of power plants and the transmission infrastructure. This modeling framework accounts for the particularities of the Kazakh electricity system: i) it has a detailed representation of combined heat and power, and ii) line losses are endogenously determined using a linear approximation. Model results are examined for a typical winter week (with annual peak load) and a typical summer week (with the hour of lowest annual load) presenting regionally and temporally disaggregated results for power generation, line utilization, and nodal prices. In an application to market design, the paper compares nodal and zonal pricing as two possible pricing schemes in Kazakhstan for the envisioned strengthening of the day-ahead market. In general, the model can be readily used to analyze the least-cost dispatch of the current Kazakh electricity system and can be easily expanded to assess the sector's development. Among others, possible applications include investment in transmission lines and in the aging power plant fleet, scenarios and policy assessment for emission reduction, and questions of market liberalization and market design.
    Keywords: Kazakhstan; Central Asia, Electricity sector, Techno-economic modeling, Transmission net- work, ELMOD
    JEL: C61 D47 Q41
    Date: 2017
  14. By: International Monetary Fund.
    Abstract: Ukraine: Selected Issues
    Date: 2017–04–04

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