nep-tra New Economics Papers
on Transition Economics
Issue of 2018‒01‒08
twenty-one papers chosen by
J. David Brown
United States Census Bureau

  1. Diagnosing unhappiness dynamics: Evidence from Poland and Russia By Michal Brzezinski
  2. Rebalancing in China: a taxation approach By Damien Cubizol
  3. The political economy of policy exceptionalism during economic transition: the case of rice policy in Vietnam By Nguyen, H.T.M.; Do, H.; Kay, A.; Kompas, T.; Nguyen, C.N.; Tran, C.T.
  4. Macroeconomic consequences of the demographic and educational transition in Poland By Aleksandra Kolasa
  5. Do Skewed Sex Ratios Among Children Promote Parental Smoking? Longitudinal Evidence from Rural China By Chen, Xi
  6. The Effect of Interest Rates on Economic Growth By Drobyshevsky Sergey; Bozhechkova Alexandra; Trunin Pavel; Sinelnikova-Muryleva Elena
  7. Temperature Effects on Productivity and Factor Reallocation: Evidence from a Half Million Chinese Manufacturing Plants By Zhang, Peng; Deschenes, Olivier; Meng, Kyle C.; Zhang, Junjie
  8. Supplier Search and Rematching in Global Sourcing - Theory and Evidence from China By Fabrice Defever; Christian Fischer; Jens Suedekum
  9. Financial literacy and voluntary savings for retirement in Slovakia By Zuzana Brokesova; Andrej Cupak; Gueorgui Kolev
  10. Macroprudential Policy, Central Banks and Financial Stability: Evidence from China By Jan Klingelhöfer; Rongrong Sun
  11. Export Rivalry and Exchange Rate Pass-Through By Sun, Puyang; Hou, Xinyu; Tan, Yong
  12. Expected Fertility and Educational Investment: Evidence from the One-Child-Policy in China By Raiber, Eva
  13. Household Entrepreneurship and Social Networks: Panel Data Evidence from Vietnam By Huu Chi Nguyen; Christophe Jalil Nordman
  14. State-Owned Enterprises in Emerging Europe: The Good, the Bad, and the Ugly By Uwe Böwer
  15. How far does monetary policy reach? Evidence from factor-augmented vector autoregressions for Poland By Mariusz Kapuściński
  16. Explanatory factors behind formalizing non-farm household businesses in Vietnam By Jean-Pierre Cling; Mireille Razafindrakoto; François Roubaud
  17. Income inequality and the Great Recession in Central and Eastern Europe By Michal Brzezinski
  18. Making the Slovak Republic a more resource efficient economy: Country Study By OECD
  19. Social Stratification by Life Chances: Evidence from Russia By Vasiliy A. Anikin; Yulia P. Lezhnina; Svetlana V. Mareeva; Nataliya N. Tikhonovà
  20. Money Demand in China: A Meta-Study By Makram El-Shagi; Yizhuang Zheng
  21. China Monetary Policy Transmission in China: Dual Shocks with Dual Bond Markets By Makram El-Shagi; Lunan Jiang

  1. By: Michal Brzezinski (Faculty of Economic Sciences, University of Warsaw)
    Abstract: This paper studies the determinants of changes in unhappiness rate (low happiness, poverty of happiness, misery) over time. We focus on two post-socialist countries, Poland and Russia, which experienced radical social and economic transformations since the collapse of communism. Using data from the Polish Social Diagnosis project for 1991-2015 and data from the Russian Longitudinal Monitoring Survey for 1994-2014, we investigate the microeconomic determinants of spectacular declines in unhappiness rates observed in the studied periods in Poland (a 56% fall in unhappiness) and Russia (a drop in the range from 46 to 75% depending on the unhappiness threshold chosen). Using a nonlinear decomposition methodology, we split the overall decreases in unhappiness rates into characteristics effects (related to the changing distribution of unhappiness-affecting factors) and coefficients effects (due to changing returns to the unhappiness-affecting factors). Our results show that unhappiness reductions in both countries were mostly driven by coefficient effects, while characteristics played a smaller, but a non-negligible role. In both countries, income growth accounted for about 15% of the total unhappiness reduction. In Russia, this effect was doubled by growing return to income as unhappiness-protecting factor, while in Poland income has been losing protecting power and in overall income had an unhappiness-increasing effect. For Russia, another strong unhappiness-protecting factor was return to employment. In case of Poland, good self-rated health and having children explains additional 15-20% of the unhappiness reduction.
    Keywords: Happiness, unhappiness, life satisfaction, decomposition, determinants, Poland, Russia
    JEL: I31 J17 J21 P36
    Date: 2017
  2. By: Damien Cubizol (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - ENS Lyon - École normale supérieure - Lyon - UL2 - Université Lumière - Lyon 2 - UCBL - Université Claude Bernard Lyon 1 - UJM - Université Jean Monnet [Saint-Étienne] - Université de Lyon - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The rebalancing of the Chinese economy is analyzed through a heterogeneous taxation of various types of firms. Based on a two-country dynamic general equilibrium model, the paper applies tax reforms to raise consumption, reduce some firms' overinvestment and maintain a high level of welfare. To rebalance consumption and investment, taxation may allow reallocating a part of the labor force to firms that are not overinvesting. Moreover, the correction of distortions in production factor costs (capital and labor) is necessary during certain reforms applied in the model; that is, on the one hand, higher credit costs for State-Owned Enterprises (SOEs) and, on the other hand, a catch-up of foreign firms' wages by domestic firms (public and private). In this model, firms' credit cost is a key channel because it impacts both firms' investment and household consumption (through returns on savings). These consumption and investment reforms bring welfare benefits to households, and the results are close to direct welfare maximization. In this framework, the rebalancing of the domestic demand does not require the readjustment of the external financial position because the aggregate savings rate remains high and the supply of domestic assets is reduced. Finally, another theoretical framework proposes a heterogeneous taxation of consumption across home and foreign goods to enhance consumption. Abstract The rebalancing of the Chinese economy is analyzed through a heterogeneous taxation of various
    Keywords: The Chinese economy,tax reforms,financial intermediation,consumption,investment,welfare,foreign assets
    Date: 2017–11–10
  3. By: Nguyen, H.T.M.; Do, H.; Kay, A.; Kompas, T.; Nguyen, C.N.; Tran, C.T.
    Abstract: The global food security agenda depends on the world rice market which is the thinnest among key cereal markets and often distorted by government interventions. Existing literature suggests that these interventions are not economically efficient. This paper focuses on the political economy of those interventions, asking why they were adopted. The answer is drawn from insights on Vietnam as a case study. Although by no means a representative case, Vietnam is chosen not only for being a key rice exporter but especially so for its unique success in overcoming the inherent tension between `socialist' and `market-based' objectives during its transition to a market-based economy, albeit with a socialist orientation. We find that rice sector in Vietnam has not been fully reformed to follow market rules despite Vietnam's accession to the World Trade Organization. This is due to the interaction of economic liberalisation processes and the ruling Communist Party's political survival strategy. In this context, seemingly economic disequilibria are shown to be stable, enduring policy settings. In open economy politics, the case reveals how economically sub-optimal policies may be `successful' politically even in the face of what appear to be severe domestic political constraints on reform from external economic pressures.
    Keywords: Food policy, rice, political economy, Vietnam, Communist Party
    Date: 2017–12
  4. By: Aleksandra Kolasa (Faculty of Economic Sciences, University of Warsaw)
    Abstract: Soon after the start of the transition to market economy in the early 1990s, Poland has experi- enced both a dramatic decline in the fertility rate and an increase in the share of students among young high-school graduates. These two processes significantly changed the age structure of the population and average income characteristics of households. Using a general equilibrium model with heterogeneous households and uninsured income shocks I try to assess the impact of these demographic and educational changes on the Polish economic performance and inequalities. I find that in the long term the positive effects of educational transition on output per capita more than offset the negative impact of lower fertility, but the outcome strongly depends on the adjustments in the structure of labor demand. I also show that the educational transition increases income and consumption inequalities, while the demographic transition decreases inequality in assets.
    Keywords: population aging, educational transition, inequalities, models with heterogeneous agents
    JEL: J11 D31 I24 D58 J26
    Date: 2017
  5. By: Chen, Xi
    Abstract: China and some other Asian countries have experienced skewed sex ratios, triggering intense competition and pressure in the marriage market. Meanwhile, China has more smokers than any other country, with half of men smoke while few women smoke. Men are the major income earners in most Chinese families and thus bear much of the financial burden in preparation for children’s marriage. This paper investigates how a demographic factor – a large number of surplus men in the marriage market in China – affects their fathers’ smoking behavior. We utilize two household longitudinal surveys as well as a random subsample of the China Population Census to examine fathers’ smoking in response to skewed sex ratios. Strikingly, fathers smoke more for families with a son living in communities with higher sex ratios. In contrast, those with a daughter do not demonstrate this pattern. Coping with the marriage market pressure is a more plausible pathway linking the observed skewed sex ratios among children and intense smoking among fathers. Considering worsening sex ratios and highly competitive marriage market in the coming decade as well as lasting health impacts due to smoking, policies suppressing unbalanced sex ratios could lead to welfare gains.
    Keywords: Sex Ratios,Marriage Market,Paternal Smoking,Stress
    JEL: J13 D12 I19
    Date: 2017
  6. By: Drobyshevsky Sergey (Gaidar Institute for Economic Policy); Bozhechkova Alexandra (Gaidar Institute for Economic Policy); Trunin Pavel (Gaidar Institute for Economic Policy); Sinelnikova-Muryleva Elena (Gaidar Institute for Economic Policy)
    Abstract: This paper explores the mechanisms, direction and extent to which interest rates can affect economic growth. The authors analyze theoretical concepts and international economic practices in high-interest-rate environments to justify that high nominal and real interest rates may not dampen economic growth if there are mechanisms such as low inflation expectations, economy’s attractiveness to foreign investors, the technological transfer effect, the accumulation of domestic savings. By using a structural vector autoregression (VAR) to evaluate econometrically the effectiveness of the interest rate channel of Bank of Russia’s monetary policy transmission mechanism, the paper provides evidence to suggest that interest rate policy is partially efficient after the global financial crisis.
    Keywords: monetary policy, inflation, inflation expectations, nominal interest rate, real interest rate, economic growth, interest rate channel, SVAR model
    JEL: E20 E31 E52 E58 G15
    Date: 2017
  7. By: Zhang, Peng (Hong Kong Polytechnic University); Deschenes, Olivier (University of California, Santa Barbara); Meng, Kyle C. (University of California, Santa Barbara); Zhang, Junjie (Duke Kunshan University)
    Abstract: This paper uses detailed production data from a half million Chinese manufacturing plants over 1998-2007 to estimate the effects of temperature on firm-level total factor productivity (TFP), factor inputs, and output. We detect an inverted U- shaped relationship between temperature and TFP and show that it primarily drives the temperature-output effect. Both labor- and capital- intensive firms exhibit sensitivity to high temperatures. By mid 21st century, if no additional adaptation were to occur, we project that climate change will reduce Chinese manufacturing output annually by 12%, equivalent to a loss of $39.5 billion in 2007 dollars. This implies substantial local and global economic consequences as the Chinese manufacturing sector produces 32% of national GDP and supplies 12% of global exports.
    Keywords: manufacturing, productivity, climate change, China
    JEL: Q54 Q56 L60 O14 O44
    Date: 2017–11
  8. By: Fabrice Defever; Christian Fischer; Jens Suedekum
    Abstract: In this paper, we consider a dynamic search-and-matching problem of a firm with its intermediate input supplier. In our model, a headquarter currently matched with a supplier, has an interest to find and collaborate with a more efficient partner. However, supplier switching through search and re-matching is costly. Given this trade-off between the fixed costs and the expected gains from continued search, the process will stop whenever the headquarter has found a sufficiently efficient supplier. Using firm-product-level data of fresh Chinese exporters to the United States, we obtain empirical evidence in line with the predictions of our theory. In particular, we find that the share of short-term collaborations is higher in industries with more supplier-cost dispersion, an indication of higher expected search opportunities.
    Keywords: input sourcing, relational contracts, supplier search
    JEL: F23 D23 L23
    Date: 2017
  9. By: Zuzana Brokesova (University of Economics in Bratislava); Andrej Cupak (National Bank of Slovakia); Gueorgui Kolev (Middlesex University London)
    Abstract: We utilise recent Household Finance and Consumption Survey microdata to report first causal effects of financial literacy on voluntary private pension schemes participation for Slovakia. Savings for retirement in the supplementary pension schemes are positively associated with financial literacy after controlling for a set of relevant socio-economic variables. One additional correctly answered financial literacy question leads to a 6 percentage points increase in the probability of having a voluntary pension savings plan in our ordinary least squares estimates. The causal impact of financial literacy increases to 16 percentage points when we address potential endogeneity problem by novel to the literature instrumental variables. Interestingly, we find less significant effects of financial literacy on the probability of individuals having employer-supported private pension savings plans. Our findings inform policy and suggest how policymakers can promote the voluntary retirement savings behaviour of individuals in Slovakia and in other Central and Eastern European countries in times of decreasing benefits of state pensions.
    Keywords: Financial literacy, Retirement savings, Survey data, Endogeneity, Instrumental variables, Slovakia
    JEL: D14 D91 I2
    Date: 2017–12
  10. By: Jan Klingelhöfer; Rongrong Sun (Center for Financial Development and Stability at Henan University, Kaifeng, Henan)
    Abstract: We study the Chinese experience and provide evidence that central banks can play an active role in safeguarding financial stability. The narrative approach is used to disentangle macropudential policy actions from monetary actions. We show that reserve requirements, window guidance, supervisory pressure and housing-market policies can be used for macroprudential purposes. Our VAR stimates suggest that well-targeted macroprudential policy has immediate and persistent impact on credit, but no statistically significant impact on output. Macroprudential policy can be used to retain financial stability without triggering an economic slowdown, or as a complement to monetary policy to offset the buildup of financial vulnerabilities arising from monetary easing. The multi-instrument framework enables central banks to achieve both macroeconomic and financial stability.
    Keywords: macroprudential policy, monetary policy, credit, financial stability, China
    JEL: E52 E58 E44
    Date: 2017–12
  11. By: Sun, Puyang; Hou, Xinyu; Tan, Yong
    Abstract: In this paper we investigate the influence of market rivalry on firm-level exchange rate pass-through. Similar to Bloom et al. (2013), we define market rivalry as product market proximity, and expect the cross market spillovers, i.e., through leaked information or reputation, to affect firm-level export price. Using a dataset from comprehensive Chinese exporters during 2000-2007, we find supporting evidence of this influence. Firms that face a high degree of market rivalry are less responsive to exchange rate fluctuations, which suggests a higher exchange rate pass-through. The influence of market rivalry is stronger on firms that export consumption and heterogeneous products, and to developed countries. Our results are robust to different measures of market rivalry and specifications.
    Keywords: Market Rivalry, Exchange Rate Pass-through, Cross Markets Spillovers
    JEL: F14 F31 F33 O19
    Date: 2017–12–20
  12. By: Raiber, Eva
    Abstract: How does future expected fertility affect current educational investment? Theory suggests that expected fertility can impact both returns to education and the resources available for parental consumption. Using policy data about varying eligibility criteria for second child permits during the One-Child-Policy in China, I investigate the effect of eligibility status on fertility and education. In the 1990s, second child permits increased the likelihood of having a second child by 11 percentage points. Being allowed to have a second child increased schooling by 0.7 years on average, an effect that is likely concentrated in the subset of individuals for whom the permit constraint is binding.
    Keywords: Fertility; Schooling Investment; Family Planning; China
    JEL: J13 J24 O15
    Date: 2017–10
  13. By: Huu Chi Nguyen (Développement, Institutions & Mondialisation - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Christophe Jalil Nordman (Développement, Institutions & Mondialisation - IRD - Institut de Recherche pour le Développement - Université Paris-Dauphine, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: Using a unique panel of household businesses for Vietnam, this paper sheds light on the links between households’ and entrepreneurs’ social networks and business performance. We address two related questions. One first question asks if we can find evidence of a differentiated effect of employment of members of the family versus hired workers on the business performance. A second question tackles the respective effects of various dimensions of social networks on the business technical efficiency. The assumption is that, beyond the channel of labour productivity, entrepreneurs that are confronted with an unfavourable social environment may produce less efficiently and realize a lower output than what could be possible with the same amount of resources. We find evidence of a productivity differential between family and hired labour and highlight results consistent with the presence of adverse social network effects faced by households running a business, in particular ethnic minorities. We stress the importance of professional networks for successful entrepreneurship.
    Abstract: En utilisant un panel de microentreprises familiales au Vietnam, cet article met en relation le réseau social des entrepreneurs et de leur ménage avec la performance de la microentreprise familiale. Nous abordons deux questions connexes. La première examine la possibilité d'effets différenciés de l'emploi des membres de la famille par rapport à des travailleurs recrutés sur le marché du travail sur la performance de la microentreprise. Une deuxième question aborde les effets respectifs des différentes dimensions des réseaux sociaux sur l'efficience technique de la microentreprise. L'hypothèse testée est que, au-delà du canal de la productivité du travail, les entrepreneurs qui sont confrontés à un environnement social défavorable pourraient produire moins efficacement et réaliser une valeur ajoutée plus faible que ce qui pourrait être possible avec la même quantité de ressources. Nous montrons qu'il existe en effet un différentiel de productivité entre le travail familial et le travail recruté sur le marché, et nos résultats attestent de la présence d'effets défavorables du réseau social pour certains ménages gérant une microentreprise. Nous soulignons aussi l'importance des réseaux professionnels pour la réussite de l'entreprenariat familial.
    Keywords: Social network capital,Sharing norms,Informality,Household business,Vietnam,Family labour,Kinship and ethnic ties,Travail familial,Liens ethniques et de parenté,Normes de partage,Capital du réseau social,Informalité,Microentreprises familiales,Panel
    Date: 2017–10–19
  14. By: Uwe Böwer
    Abstract: State-owned enterprises (SOEs) play an important role in Emerging Europe’s economies, notably in the energy and transport sectors. Based on a new firm-level dataset, this paper reviews the SOE landscape, assesses SOE performance across countries and vis-à-vis private firms, and evaluates recent SOE governance reform experience in 11 Emerging European countries, as well as Sweden as a benchmark. Profitability and efficiency of resource allocation of SOEs lag those of private firms in most sectors, with substantial cross-country variation. Poor SOE performance raises three main risks: large and risky contingent liabilities could stretch public finances; sizeable state ownership of banks coupled with poor governance could threaten financial stability; and negative productivity spillovers could affect the economy at large. SOE governance frameworks are partly weak and should be strengthened along three lines: fleshing out a consistent ownership policy; giving teeth to financial oversight; and making SOE boards more professional.
    Date: 2017–10–30
  15. By: Mariusz Kapuściński
    Abstract: This study applies factor-augmented vector autoregressions to identify the effects of monetary policy shocks in a small, open, emerging market economy. It uses data on 132 variables for Poland, ‘compressing’ them to either structural (having an economic interpretation) or economically uninterpretable factors, also known as diffusion indices. The tightening of monetary policy is found to have broad, contractionary effects. Among other things, production, building permits, retail trade, employment, job offers, prices, wages, loans and stock prices decrease, unemployment and non-performing loans increase. However, a rise in the interest rate does not appear to be associated with an appreciation of the exchange rate. But this result is not robust among studies using vector autoregressions, which calls for a different strategy to identify the causal effect. As one of extensions, the effects of changes in global and foreign factors are investigated. Domestic prices are found to respond to global prices of commodities and foreign prices. Domestic production and interest rates – to their foreign counterparts.
    Keywords: factor analysis, vector autoregressions, factor-augmented vector autoregressions, high-frequency identification, monetary transmission mechanism
    JEL: C38 C32 E43 E52
    Date: 2017
  16. By: Jean-Pierre Cling (CEPN - Centre d'Economie de l'Université Paris Nord - UP13 - Université Paris 13 - USPC - Université Sorbonne Paris Cité - CNRS - Centre National de la Recherche Scientifique); Mireille Razafindrakoto (LEDa - Université Paris Dauphine (Paris 9)); François Roubaud (LEDa - Université Paris Dauphine (Paris 9))
    Abstract: This article sets out to investigate the reasons why some household businesses decide to register and become formal (while others do not) in order to shed light on the origins of informality. We use qualitative as well as quantitative data on household businesses (HB) derived from first-hand representative surveys implemented in Hanoi and Ho Chi Minh city. The study reveals that although most of the informal businesses operate ‘illegally’, this is more due to unclear registration legislation than the mark of a deliberate intention to evade the economic regulations.Among the different factors which influence the registration decisions, the reason for setting up the business appears to be a determining one: the more it is a real choice (businesses set up to be independent or to follow a family tradition) and the less a constraint (set up for lack of an job alternative), the more the HB is more inclined to be registered. Furthermore, the analysis highlights that incentives do prove decisive insofar as the probability of having a formal business is greater among HB heads who consider that registration provides at least partial protection from corruption. Besides, access to information, the market and large business orders also drive the informal entrepreneurs to register. These results stress the need for clarification of the legal framework as well as incentive policies in order to address the issue of informality.
    Abstract: Cet article se propose d'analyser les raisons pour lesquelles certaines unités de production (household businesses, HB) décident de s'enregistrer et de devenir formelles (et pourquoi d'autres ne le font pas) afin d'éclairer les origines de l'informalité. Nous mobilisons des données aussi bien quantitatives que qualitatives sur les HB, issues d'enquêtes représentatives et de première main conduite par nos soins à Hanoï et Ho Chi Minh ville. L'étude révèle que bien que la plupart des unités informelles opère "illégalement", ce trait procède plus d'une législation floue et méconnue que d'une volonté délibérée d'échapper aux régulations publiques. Parmi les différents facteurs qui jouent sur la décision de s'enregistrer, le motif qui a conduit à s'établir à son compte est déterminant : plus il s'agit d'un véritable choix (volonté d'échapper au salariat ou par tradition familiale) et moins il résulte d'une contrainte (manque d'alternative d'emploi), et plus le chef d'unité sera enclin à s'enregistrer. De plus, l'analyse met en évidence le rôle des incitations dans la probabilité de devenir formel. Ainsi, ceux qui considèrent que l'enregistrement protège (au moins partiellement) de la corruption sont plus nombreux à régulariser leur situation. Enfin, l'accès à l'information, aux marchés et aux commandes des grandes entreprises favorisent l'enregistrement. Ces résultats soulignent le besoin de clarification de la législation des entreprises ainsi que l'importance de politiques incitatives pour s'attaquer à la question de l'informalité.
    Keywords: Informal Sector,Vietnam,Registration,Corruption,Incentives
    Date: 2017–12–14
  17. By: Michal Brzezinski (Faculty of Economic Sciences, University of Warsaw)
    Abstract: This paper uses the European Union Statistics on Income and Living Conditions (EU-SILC) data to study the changes in income inequality in Central and Eastern Europe during the Great Recession (2008-2012) and its determinants. Inequality changes are decomposed using an Oaxaca-Blinder-like decomposition analysis based on the Recentered Influence Function (RIF) methodology, which allows to split the overall change in inequality into endowment effects associated with changes in the distribution of inequality covariates and coefficient effects, which are related to the changing returns to these covariates. Our results show that the Gini for disposable incomes has increased over 2008-2012 in a statistically significant way for Bulgaria, Estonia, Hungary and Slovenia. For most of the countries with significant inequality increases, falling full-time employment rate played the biggest role in explaining changes in inequality. It accounted for about 50-60% of the Gini change for disposable incomes and for about 60-80% of the Gini change for market incomes. The fall in full-time employment rate had a smaller inequality-increasing effect for disposable incomes in Hungary (about 15% of the Gini increase). Increased part-time employment during the recession had either no impact on inequality or was rather inequality-decreasing. We did not find evidence that changes in the incidence of temporary jobs had any impact on income inequality.
    Keywords: income inequality, decomposition, RIF regression, Great Recession, Central and Eastern Europe
    JEL: D63 E32 G01 P24 P36
    Date: 2017
  18. By: OECD
    Abstract: The Slovak Republic is a country with a limited natural resource base, an important manufacturing sector and rising materials consumption. Coherent polices that aim at increasing resource efficiency and achieving green growth are vital for sustainable growth and increased prosperity. This paper identifies a number of options for improving resource efficiency in the Slovak Republic.
    Date: 2017–12–19
  19. By: Vasiliy A. Anikin (National Research University Higher School of Economics); Yulia P. Lezhnina (National Research University Higher School of Economics); Svetlana V. Mareeva (National Research University Higher School of Economics); Nataliya N. Tikhonovà (National Research University Higher School of Economics)
    Abstract: The present paper operationalizes one of the oldest concepts in the sociological literature about social stratification. Relying on Weber’s theory, the authors consider life chances in terms of positive and negative privileges. This framework is fertile ground for constructing a series of indices measuring opportunities and risks in key areas of life such as economic conditions, work situation, human capital accumulation, and consumption and leisure activities. Drawing on empirical data from three 2015 representative Russian surveys, the authors classified the Russian population on a continuum of life chances. The majority of Russians obtain just one third of the maximum scores on the life-chance scale. It is also shown that the life-chance scale has a strong correlation with the peaks of income distribution; however, the relationship between lower- and middle-income groups are not that salient. Finally, we show that life chances are uniquely distributed across different localities in contemporary Russia. We admit therefore the high analytical power of the neo-Weberian concept of life chances in stratification studies. Measured via a multidimensional index, life chances appear a good alternative to a gradational approach and the relational stratification schema developed particularly for the working population
    Keywords: life chances, social risks, positive and negative privileges, social structure and stratification, inequality, Russia
    JEL: Z
    Date: 2017
  20. By: Makram El-Shagi; Yizhuang Zheng (Center for Financial Development and Stability at Henan University, Kaifeng, Henan)
    Abstract: In this paper we reexamine the literature on money demand in China published both in English and Chinese language. Over the past 30 years - starting with the paper by Chow (1987) there has been a regular stream of papers assessing the Chinese money demand function. The literature is mostly focusing on income elasticity, stability, and - which is special for China - the adequate choice and quality of data. In particular regarding stability of money demand, we find a substantial publication bias towards rejecting stability. When controlling for publication bias, and focusing on longer time periods, our paper strongly suggests stable long run money demand in China.
    Keywords: inflation, exchange rate, forecast performance, terror- ism, market forecast, expert forecast
    JEL: C53 E37 F37 F51
    Date: 2017–12
  21. By: Makram El-Shagi; Lunan Jiang (Center for Financial Development and Stability at Henan University, Kaifeng, Henan)
    Abstract: Although China's monetary and financial system differs drastically from its Western counterpart, empirical studies covering this vast economy (the largest by some accounts) have often been simple reestimations or recalibrations of models that have originally been designed to describe US or European monetary policy. In this paper, we aim to provide an assessment of Chinese monetary policy and in particular monetary policy transmission through the bond market into the real economy, which takes into account the peculiarities of the Chinese market. Namely, our model includes both China's modern attempts at a market based policy shock as well as the "authority" based monetary policy that is a relic of the original banking system; it considers the special nature of the Chinese treasury bond market which is separated in two independent markets with very limited direct arbitrage opportunities between almost identical assets, and finally it incorporates the role of real estate, which played an essential role in China during the last decade.
    Keywords: monetary policy, yield curve, market segmentation
    JEL: E52 E43
    Date: 2017–12

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