nep-tra New Economics Papers
on Transition Economics
Issue of 2019‒03‒11
24 papers chosen by
J. David Brown
United States Census Bureau

  1. "Agrarian Economy and Rural Development - Realities and Perspectives for Romania" By Ursu, Ana
  2. Republic of Poland; 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Alternate Executive Director for the Republic of Poland By International Monetary Fund
  3. Short-Run Health Consequences of Retirement and Pension Benefits: Evidence from China By Nikolov, Plamen; Adelman, Alan
  4. Bosnia and Herzegovina; Technical Assistance Report-Report on Government Finance Statistics Technical Assistance Mission By International Monetary Fund
  5. Republic of Armenia; Detailed Assessment of Observance of the Basel Core Principles for Effective Banking Supervision By International Monetary Fund
  6. Credit and fiscal multipliers in China By Chen, Sophia; Ratnovski, Lev; Tsai, Pi-Han
  7. Cross-shareholding networks and stock price synchronicity: Evidence from China By Fenghua Wen; Yujie Yuan; Wei-Xing Zhou
  8. The Effects of Austerity Measures on Gender Gaps in Labor Market Outcomes By Jelena Zarkovic Rakic; Marko Vladisavljevic; Jorge Davalos
  9. Някои аспекти на защитата от дискриминация при упражняване правото на труд – проблеми и тенденции By Andreeva, Andriyana
  10. An innovative feature selection method for support vector machines and its test on the estimation of the credit risk of default By Sariev, Eduard; Germano, Guido
  11. Political connections and firm pollution behaviour : An empirical study By Deng, Yuping; Wu, Yanrui; Xu, Helian
  12. A Macroeconomic Forecasting Model of the Fixed Exchange Rate Regime for the Oil-Rich Kazakh Economy By Tibor Hledik; Karel Musil; Jakub Rysanek; Jaromir Tonner
  13. Republic of Croatia; 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Croatia By International Monetary Fund
  14. Truths and myths about RMB misalignment : A meta-analysis By Cheung, Yin-Wong; He, Shi
  15. Using local expert knowledge to measure prices: Evidence from a survey experiment in Vietnam By Gibson, John; Le, Trinh
  16. Place-based Innovation Ecosystems: Ljubljana start-up ecosystem and the Technology Park Ljubljana (Slovenia) By Maja Bucar; Gabriel Rissola
  17. Eastern Caribbean Currency Union; 2018 Discussion on Common Policies of Member Countries-Press Release; Staff Report; and Statement by the Executive Director for the Eastern Caribbean Currency Union By International Monetary Fund
  18. Financial stability and public confidence in banks By Chernykh, Lucy; Davydov, Denis; Sihvonen, Jukka
  19. Exposure to floods, climate change, and poverty in Vietnam By Bangalore, Mook; Smith, Andrew; Veldkamp, Ted
  20. Republic of Slovenia; 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Slovenia By International Monetary Fund
  21. Improving the Efficiency and Equity of Public Education Spending: The Case of Moldova By Hui Jin; La-Bhus Fah Jirasavetakul; Baoping Shang
  22. Which Sanctions Matter? Analysis of the EU/Russian Sanctions of 2014 By Belin, Matej; Hanousek, Jan
  23. Higher Education for Smart Specialisation - The Case of North Central Bulgaria By Ruslan Stefanov; John Edwards; Elisa Gerussi
  24. Правна регламентация на социалната и солидарна икономика и влиянието й върху заетостта By Andreeva, Andriyana

  1. By: Ursu, Ana
    Abstract: The volume contains the papers accepted and published in the proceedings of the 9th International symposium entitled: “Agrarian Economy and Rural Development - Realities and Perspectives for Romania’, organized by the Research Institute for Agriculture Economy and Rural Development – Bucharest, in cooperation with the Institute of Agricultural Economics - Romanian Academy, University of Agrarian Sciences and Veterinary Medicine – The Faculty of Management, Economic Engineering in Agriculture and Rural Development – Bucharest - Romania, Institute for Economy, Finance and Statistics – Chisinau - Republic of Moldova, Institute of Agricultural Economics - Belgrade – Serbia, under the high scientific patronage of the Academy of Agricultural and Forestry Sciences ”Gheorghe Ionescu Sisesti”, held in Bucharest - Romania, on November 15th, 2018. The proceedings are structured in accordance with the sessions of the symposium: Concepts, evaluations and visions on the dynamics of rural socio-economy; Economy, management and agricultural marketing; Rural development and agricultural policies. In the symposium proceedings, there are shared knowledge, experience and the newest results of the research on agrarian economy and rural development domains, related to: the agri-food trade, the impact of new tax policies in semi-subsistence agriculture, statistical analysis of the socio-demographic and economic characteristics of rural areas, bioeconomy concept - challenges and perspectives for agriculture, land resources – structural evolutions, modernization and socio-economic development of the rural area, rural education, improvement and optimisation of soil conservation system “no tillage”, the analysis of the technico-economic indicators for the main crops, milk sector in international context, vegetable farm structure evolution by standard output, rentability of consumed resources in condition of conventional and ecological operation, analysis of the impact of coupled support in agriculture etc. The symposium proceedings is structured in 5 specialized sections, where the read my find interesting argues regarding this research field.
    Keywords: agriculture, rural development, rural economy, CAP.
    JEL: A1 C1 D2 N5 N50 O1 O12 O13 Q1 Q13 Q18 R0 R1 R11
    Date: 2018–11–15
  2. By: International Monetary Fund
    Abstract: The strong growth upswing since 2017 was supported by three coincident cycles—a rebound in euro-area activity, a substantial increase in EU transfers, and new large social benefit programs. Unemployment was reduced to a record low and Poland has attracted large inflows of foreign workers. Slowing external demand, however, is projected to moderate real GDP growth in 2019, while medium-term prospects are more subdued against a shrinking working-age population, modest private investment and tepid productivity gains. Increased state control of the financial sector raises challenges for sound supervision, and a larger state footprint in the economy could slow productivity growth. Risks to the outlook for the Polish economy from external developments are elevated, while any slippage from prudent policies and sound governance principles could dent investors’ risk appetite.
    Keywords: Poland;Europe;
    Date: 2019–02–06
  3. By: Nikolov, Plamen; Adelman, Alan
    Abstract: This paper examines the impact of the New Rural Pension Scheme (NRPS) in China. Exploiting the staggered implementation of an NRPS policy expansion that began in 2009, we used a difference-in-difference approach to study the effects of the introduction of pension benefits on the health status, health behaviors, and healthcare utilization of rural Chinese adults age 60 and above. The results point to three main conclusions. First, in addition to improvements in self-reported health, older adults with access to the pension program experienced significant improvements in several important measures of health, including mobility, self-care, usual activities, and vision. Second, regarding the functional domains of mobility and self-care, we found that the females in the study group led in improvements over their male counterparts. Third, in our search for the mechanisms that drive positive retirement program results, we find evidence that changes in individual health behaviors, such as a reduction in drinking and smoking, and improved sleep habits, play an important role. Our findings point to the potential benefits of retirement programs resulting from social spillover effects. In addition, these programs may lessen the morbidity burden among the retired population. (JEL H55, H75, I10, I12, I19, J26)
    Keywords: life-cycle, retirement, pension, health, aging, developing countries, China.
    JEL: H55 H75 I10 I12 I15 I19 J26 J32 O11
    Date: 2018–11–30
  4. By: International Monetary Fund
    Abstract: A technical assistance (TA) mission was conducted by Mr. Deon Tanzer, the government finance statistics (GFS) advisor1 for South East Europe during the period of May 28–June 1, 2018, to support the Bosnia and Herzegovina authorities, with a specific focus on the Republic of Srpska (RS), in improving GFS for decision making. This mission was conducted within the context of the second phase of the Swiss State Secretariat for Economic Affairs (SECO) GFS capacity building project. The mission met with officials from the Ministry of Finance of the Republic of Srpska (MOF RS) and the Republic of Srpska Institute of Statistics (RZS).
    Keywords: Bosnia and Herzegovina;Europe;
    Date: 2019–02–04
  5. By: International Monetary Fund
    Abstract: The Central Bank of Armenia (CBA) has made significant progress in its approach to banking supervision with adoption of the RBS framework and addressing gaps in the regulatory framework identified in the 2012 Basel Core Principles (BCP) assessment. The recently adopted RBS framework provides a forward-looking assessment of the risk profile of individual banks and groups and assigns supervisory resources more proportionate to the risk in the system, and to the risks within individual banks. The use of risk teams to take ownership of individual risk across the banking system also contributes to identification and monitoring of risks emanating from banks and the banking system as a whole. In addition, improvements have been made in the regulatory regime regarding requirements for risk management, stress testing, corporate governance, country risk and consolidated supervision.
    Keywords: Armenia;Middle East;
    Date: 2019–02–05
  6. By: Chen, Sophia; Ratnovski, Lev; Tsai, Pi-Han
    Abstract: We estimate credit and fiscal multipliers in China, using subnational political cycles as a source of exogenous variation. The tenure of the provincial party secretary, interacted with the credit and fiscal expenditure used in other provinces, instruments for provincial credit and government expenditure growth. We find a fiscal multiplier of 0.75 in 2001-2008, which increased to 1.2 in 2010-2015, consistent with higher multipliers in a slower economy. At the same time, a credit multiplier of 0.2 in 2001-2008 declined to close to zero in 2010-2015, consistent with credit saturation and credit misallocation. Our results suggest that credit expansion cannot further support economic growth in China. The flip side is that lower credit growth is also unlikely to disrupt output growth. Fiscal policy is powerful, and can cushion the macroeconomic adjustment to lower credit intensity.
    JEL: E63 G21 H20 R12
    Date: 2019–02–28
  7. By: Fenghua Wen (CSU); Yujie Yuan (CSU); Wei-Xing Zhou (ECUST)
    Abstract: This paper investigates the effect of cross-shareholding on stock price synchronicity, as a measure of price informativeness, of the listed firms in the Chinese stock market. We gauge firms' levels of cross-shareholdings in terms of centrality in the cross-shareholding network. It is confirmed that it is through a noise-reducing process that cross-shareholding promotes price synchronicity and reduces price delay. More importantly, this effect on price informativeness is pronounced for large firms and in the periods of market downturns. Overall, our analyses provide insights into the relation between the ownership structure and price informativeness.
    Date: 2019–03
  8. By: Jelena Zarkovic Rakic; Marko Vladisavljevic; Jorge Davalos
    Abstract: Recent empirical evidence, largely based on descriptive analyses, suggests that women’s wages and employment are more likely to be affected by government austerity measures because women constitute a majority of the public-sector labor force. Employing panel data from the 2014 and 2015 Labour Force Survey as pre- and post-treatment periods, we provide an econometric assessment of the effects of a 10% public-sector wage cut in Serbia that was introduced at the beginning of 2015. Wage cuts mandated by austerity measures increased the likelihood that younger and older women workers would transition into unemployment and inactivity, while no such effect was identified for men. On the other hand, evidence of heterogeneous compliance with the wage cut across public subsectors. State-owned enterprises, a subsector dominated by men, exhibited lower compliance with wage cuts compared to the state-sector, which is dominated by women. The difference in compliance prevented wage cuts from having the positive effect they could have had on the gender wage gap.
    Keywords: gender, labor market transition, wages, austerity, Serbia
    JEL: J16 J21 J31 J45 H61
    Date: 2019
  9. By: Andreeva, Andriyana
    Abstract: The report analyses some of the aspects of discrimination in Bulgaria in practicing of the right of work. Based on the actual normative analysis and related to the practice of the SPD the author makes conclusions and summaries. Considering prevention of discrimination in the labour law the author develops the contemporary tendencies and makes recommendations for improvement of the legislation.
    Keywords: right of work; discrimination; protection against discrimination; employment relationship
    JEL: K31
    Date: 2018
  10. By: Sariev, Eduard; Germano, Guido
    Abstract: Support vector machines (SVM) have been extensively used for classification problems in many areas such as gene, text and image recognition. However, SVM have been rarely used to estimate the probability of default (PD) in credit risk. In this paper, we advocate the application of SVM, rather than the popular logistic regression (LR) method, for the estimation of both corporate and retail PD. Our results indicate that most of the time SVM outperforms LR in terms of classification accuracy for the corporate and retail segments. We propose a new wrapper feature selection based on maximizing the distance of the support vectors from the separating hyperplane and apply it to identify the main PD drivers. We used three datasets to test the PD estimation, containing (1) retail obligors from Germany, (2) corporate obligors from Eastern Europe, and (3) corporate obligors from Poland. Total assets, total liabilities, and sales are identified as frequent default drivers for the corporate datasets, whereas current account status and duration of the current account are frequent default drivers for the retail dataset.
    Keywords: default risk; logistic regression; support vector machines; ES/ K002309/1
    JEL: C10 C13
    Date: 2018–11–28
  11. By: Deng, Yuping; Wu, Yanrui; Xu, Helian
    Abstract: A firm's top manager and a government official may be connected due to special circumstances. This social relationship or political connection may provide industrial polluters with protection or a “pollution shelter” which could lead to severe environmental deterioration. This paper aims to examine the link between political connections and firms’ pollution discharges by using Chinese data. Empirical results show that political connections are the institutional origin for firms to adopt strategic pollution discharges. Government officials who are young, of low education, promoted locally and in office for a relatively long time are more likely to build political connections with polluters. This phenomenon results in inadequate enforcement of regulation and emission control. The pollution discharges of politically connected firms also vary considerably due to firm heterogeneity. This study also shows that pollution shelter effects caused by political connections are more obvious in the central and western regions, prefecture cities and capital-intensive industries.
    JEL: Q51 L20 O12
    Date: 2019–02–27
  12. By: Tibor Hledik; Karel Musil; Jakub Rysanek; Jaromir Tonner
    Abstract: This paper presents a semi-structural quarterly projection open-economy model for analyzing monetary policy transmission and macroeconomic developments in Kazakhstan during the period of the fixed exchange rate regime. The model captures key stylized facts of the Kazakh economy, especially the important role of oil prices in influencing the economic cycle in Kazakhstan. The application of the model to observed data provides a reasonable interpretation of Kazakh economic history, including the global crisis, through to late 2015, when the National Bank of Kazakhstan introduced a managed float. The dynamic properties of the model are analyzed using impulse response functions for selected country-specific shocks. The model’s shock decomposition and in-sample forecasting properties presented in the paper suggest that the model was an applicable tool for monetary policy analysis and practical forecasting at the National Bank of Kazakhstan. In a general sense, the model can be considered an example of a quarterly projection model for oil-rich countries with a fixed exchange rate.
    Keywords: Fixed exchange rate, Kazakhstan, monetary policy, QPM, stylized facts
    JEL: C50 E17 E32 E52 E58
    Date: 2018–10
  13. By: International Monetary Fund
    Abstract: The economic expansion continues, driven primarily by private consumption and exports of goods and services. Fiscal performance has been strong, but the materialization of contingent liabilities from government guarantees is likely to reduce the overall surplus. Low public and private investment, and continued emigration weigh on medium-term growth prospects. Downside risks in the near-term stem from possible changes in regional or global economic and financial conditions, and the further realization of contingent liabilities.
    Keywords: Europe;Croatia;
    Date: 2019–02–12
  14. By: Cheung, Yin-Wong; He, Shi
    Abstract: We conduct a meta-regression analysis of 69 studies that generated 937 renminbi (RMB) misalignment estimates. The Bayesian Model Averaging (BMA) approach is adopted to allow for model selection and sampling uncertainties in assessing effects of study characteristics on these RMB misalignment estimates. Misalignment estimates are found to be influenced by the eight selected study characteristic types in our median probability model. The RMB misalignment estimate from models with various hypothetical combinations of study characteristics, however, is mostly insignificantly different from zero. It is also shown that the set of significant study characteristics is sensitive to the use of the least squares estimation method and the choice of benchmark study characteristics.
    JEL: C83 F31 F41
    Date: 2019–02–22
  15. By: Gibson, John; Le, Trinh
    Abstract: Many countries lack spatially disaggregated consumer price data. Yet these data are needed to estimate real inequality and spatial patterns of poverty, especially for poor countries where weak infrastructure and high transport costs create big price variation over space. We experimented in Vietnam with a new way of obtaining disaggregated price data, using local expert knowledge to derive the mean and variance for prices of 64 consumer items in over 1000 communities. We used photographs of the specified items to ensure comparability of the reported prices. These prices are used to calculate regional cost-of-living indexes, which provide a good approximation to benchmark multilateral price indexes that are calculated from data obtained from traditional market price surveys. In comparison, two widely used no-price methods, based on using food Engel curves to derive deflators and based on using unit values (survey group expenditures over group quantity) are very poor proxy indicators of prices and of the cost-of-living and would distort estimates of real inequality and the spatial pattern of poverty. Prices from local expert informants also exhibit a basic spatial feature of prices – the Alchian-Allen effect or ‘shipping the good apples out’ – in much the same way as do prices from the traditional survey approach. This effect is one reason why unit values are a bad proxy for prices and this effect should become more important as food systems commercialize. Using expert knowledge to measure local prices is a low-cost and feasible approach that could be adopted more widely in developing countries.
    Keywords: Expert knowledge; Inequality; Prices; Regional Cost-of-Living; Surveys; Vietnam
    JEL: D12 O15
    Date: 2019–02–28
  16. By: Maja Bucar; Gabriel Rissola (European Commission - JRC)
    Abstract: This case study focuses on Ljubljana/ Slovenia's start-up ecosystem and its main actors and orchestrators (or "innovation process entrepreneurs") like the Technology Park Ljubljana. While Slovenia has kept its place as a strong innovator (EIS, 2017), the only CEEC in this group, it lacks an effective governance structure for research and innovation and true collaboration between actors. Taking advice from more experienced countries and applying policy and funding instruments prescribed by the EU could have speeded up the process of developing a more advanced innovation system, but frequent changes of the instruments and the support provided to different stakeholders did not help. Against this background, one of the interesting phenomena that can be observed in Ljubljana’s start-up environment is a growth of various kinds of new initiatives, some bottom-up from entrepreneurial activity, others stimulated by public policy, but all aimed at providing stimulating support to start-ups, from co-working spaces, geek house, Hackathon, etc. All together they create a dynamic network, which spreads beyond Ljubljana’s Region across Slovenia, but also much wider across Western Balkans and to EU and USA. This network is developing in parallel, with or without the support of formal institutions and/or governmental support.
    Keywords: Place-based, innovation ecosystem, start-up, Technology Park, Ljubljana, quadruple helix
    Date: 2018–12
  17. By: International Monetary Fund
    Abstract: The Eastern Caribbean Currency Union (ECCU) is gradually recovering following the catastrophic impact of Hurricanes Irma and Maria in 2017. Tourism is slowly picking up in hurricane-stricken countries and has remained strong elsewhere in the ECCU. Conditions remain favorable to growth, but risks are increasing. The fiscal balance for the region as a whole—which is particularly important in a quasi-currency board arrangement—worsened in 2017, reflecting lower inflows from citizenship-by-investment programs and higher reconstruction and current spending. While public debt has declined, helped by debt relief operations in some countries, the ECCU debt target of 60 percent of GDP by 2030 remains elusive for most countries. Important progress has been made in financial sector reforms, but long-standing weaknesses and emerging risks weigh on growth prospects and may entail fiscal costs. External deficits remain large, highlighting low competitiveness. Natural disasters are becoming more frequent and intense, compounding these vulnerabilities.
    Date: 2019–02–22
  18. By: Chernykh, Lucy; Davydov, Denis; Sihvonen, Jukka
    Abstract: We use a novel, household opinions-based measure – Public Confidence in a Bank – to explore the role of bank-level and system-wide determinants of customers’ trust in banks. Our study covers a panel of approximately 260 large Russian commercial banks publicly monitored during 2010–2017. We find that public confidence in a bank is highly sensitive to the industry-level financial stability indicators, but less sensitive to bank-level risk characteristics. This result reveals an important role of overall banking sector stability in determining public perception of the safety and soundness of individual banks.
    JEL: G21 D14
    Date: 2019–02–19
  19. By: Bangalore, Mook; Smith, Andrew; Veldkamp, Ted
    Abstract: With 70% of its population living in coastal areas and low-lying deltas, Vietnam is highly exposed to riverine and coastal flooding. This paper conducts a “stress-test” and examines the exposure of the population and poor people in particular to current and future flooding in Vietnam and specifically in Ho Chi Minh City. We develop new high-resolution flood hazard maps at 90 m horizontal resolution, and combine this with spatially-explicit socioeconomic data on poverty at the country and city level, two datasets often kept separate. The national-level analysis finds that a third of today’s population is already exposed to a flood, which occurs once every 25 years, assuming no protection. For the same return period flood under current socioeconomic conditions, climate change may increase the number exposed to 38 to 46% of the population (an increase of 13–27% above current exposure), depending on the severity of sea level rise. While poor districts are not found to be more exposed to floods at the national level, the city-level analysis of Ho Chi Minh City provides evidence that slum areas are more exposed than other urban areas. The results of this paper provide an estimate of the potential exposure under climate change, including for poor people, and can provide input on where to locate future investments in flood risk management.
    Keywords: floods; poverty; Vietnam; exposure; urban development; ES/K006576/1
    JEL: Q50 Q54 I30
    Date: 2018–10–26
  20. By: International Monetary Fund
    Abstract: A broad-based recovery continued in 2018, lowering unemployment, swinging the headline fiscal balance into surplus, and reducing the public debt ratio. Growth is expected to slow moderately to 3.4 percent in 2019, and risks remain tilted to the downside, notably related to a rise in protectionism, political and policy uncertainty in Europe.
    Keywords: Structural fiscal balance;Central banks;Gross domestic product;Balance of payments;Social security;account surplus;output gap;percent of GDP;SOEs;Haver
    Date: 2019–02–18
  21. By: Hui Jin; La-Bhus Fah Jirasavetakul; Baoping Shang
    Abstract: This paper, using Moldova as an example, presents a systematic approach to assess the efficiency and equity of public education spending, identify sources of inefficiencies and inequality, and formulate potential reform options. The analytical framework combines international benchmarking with country-specific analysis—such as microeconomic analysis based on household survey data—and can provide important insights into diagnosing and reforming education systems. The analysis finds significant scope to improve both efficiency and equity of the education sector in Moldova. Potential reform measures include further consolidating the oversized school network, reducing overstaffing, and better targeting government subsidies. The current remuneration policy could also be improved to attract high quality teachers and incentivize performance.
    Date: 2019–02–26
  22. By: Belin, Matej; Hanousek, Jan
    Abstract: In this paper we use a natural experiment of reciprocal imposition of trade sanctions by Russia and the EU since 2014. Using UNCTAD/BACI bilateral flows data we take this unique opportunity to analyse both sanctions. In particular, we study the effectiveness of narrow versus broadly defined sanctions, and differences in the effectiveness of sanctions imposed on exports and imports. We show that the Russian sanctions imposed on European and American food imports resulted in about 8 times stronger decline in trade flows than those imposed by the EU and the US on exports of extraction equipment. These results do not appear to be driven by diversion of trade flows via non-sanctioning countries. Hence the difference in sanctions' effectiveness can be attributed to the broader range of sanctioned goods and potentially to a stronger position of enforcement of sanctions on imports rather than exports.
    Keywords: Bilateral trade flows; Differences-in-differences; International trade; Russia; sanctions; UNCTAD/BACI data
    JEL: C01 C23 F14
    Date: 2019–02
  23. By: Ruslan Stefanov; John Edwards (European Commission - JRC); Elisa Gerussi (European Commission - JRC)
    Abstract: This case study reports on how fieldwork in North Central Bulgaria into how higher education is being involved in the implementation of Smart Specialisation.
    Keywords: Higher Education, Smart Specialisation, Bulgaria
    Date: 2018–12
  24. By: Andreeva, Andriyana
    Abstract: Abstract The present report examines the legal regulation of the social and solidarity economics in Bulgaria and its influence on the employment. For performance of the legal analysis are used legislative solutions, provided for in the Act on the enterprises of the social and solidarity economics. Based on the examination the author makes conclusions and summaries.
    Keywords: social and solidarity economics; principle of social economics; employment
    JEL: K31
    Date: 2019

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