nep-tra New Economics Papers
on Transition Economics
Issue of 2020‒04‒27
thirteen papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Exposure to Transit Migration, Public Attitudes and Entrepreneurship By Ajzenman, Nicolas; Aksoy, Cevat Giray; Guriev, Sergei
  2. Money demand stability, monetary overhang and inflation forecast in the CEE countries By Claudiu Tiberiu Albulescu; Dominique Pépin
  3. Urbanization Policy and Economic Development: A Quantitative Analysis of China’s Differential Hukou Reforms By Hsu, Wen-Tai; Ma, Lin
  4. Persistent Privilege? Institutional Education Gaps during Vietnam's Economic Boom By Diep Phan; Ian Coxhead
  5. Sibling Spillover in Rural China: A Story of Sisters and Daughters By Bansak, Cynthia; Jiang, Xuan; Yang, Guanyi
  6. Diagnosis of the agricultural information, training and advice system in Bulgaria By Bachev, Hrabrin
  7. Nationalism, national tourism organizations, and promotion to international markets: A multimodal analysis of nationalism in Balkan national tourism organization websites By Houliston, Linda; Ivanov, Stanislav Hristov; Webster, Craig
  8. Weighing up the Credit-to-GDP gap: A cautionary note By Oezer Karagedikli; Ole Rummel
  9. Survival of the Confucians: social status and fertility in China, 1400-1900 By Hu, Sijie
  10. Impacts of Social and Economic Factors on the Transmission of Coronavirus Disease 2019 (COVID-19) in China By Qiu, Yun; Chen, Xi; Shi, Wei
  11. Crisis management for euro-area banks in central Europe By Alexander Lehmann
  12. Forecasting inflation in Bosnia and Herzegovina By Elma Hasanovic
  13. Impacts of enterprise zones on local households in Vietnam By Vu, Tien; Yamada, Hiroyuki

  1. By: Ajzenman, Nicolas (São Paulo School of Economics-FGV); Aksoy, Cevat Giray (European Bank for Reconstruction and Development); Guriev, Sergei (Sciences Po, Paris)
    Abstract: Does exposure to mass migration affect economic behavior, attitudes and beliefs of natives in transit countries? In order to answer this question, we use a unique locality-level panel from the 2010 and 2016 rounds of the Life in Transition Survey and data on the main land routes taken by migrants in 18 European countries during the refugee crisis in 2015. To capture the exogenous variation in natives' exposure to transit migration, we construct an instrument that is based on the distance of each locality to the optimal routes that minimize travelling time between the main origin and destination cities. We first show that the entrepreneurial activity of natives falls considerably in localities that are more exposed to mass transit migration, compared to those located further away. We then explore the mechanisms and find that our results are likely to be explained by a decrease in the willingness to take risks as well as in the confidence in institutions. We also document an increase in the anti-migrant sentiment while attitudes towards other minorities remained unchanged. We rule out the possibility of out-migration of natives or of trade-related shocks (potentially confounded with the mass-transit migration) affecting our results. Using locality-level luminosity data, we also rule out any effect driven by changes in economic activity. Finally, we find no statistically significant effects on other labor market outcomes, such as unemployment or labor force participation.
    Keywords: migrant routes, entrepreneurship, public attitudes, political instability
    JEL: F22 L26 D91 O15 O10
    Date: 2020–04
  2. By: Claudiu Tiberiu Albulescu; Dominique Pépin (CRIEF - Centre de Recherche sur l'Intégration Economique et Financière - Université de Poitiers)
    Abstract: This paper first shows that the long-run money demand in Central and Eastern European (CEE) countries is better described by an open-economy model (OEM), which considers a currency substitution effect, than by a closed-economy model (CEM) used in several previous studies. Second, from the estimated models we derive two different measures of monetary overhang. Then we compare the ability of the OEM-based and the CEM-based measures of monetary overhang to predict inflation in the CEE countries, namely the Czech Republic, Hungary and Poland. While we cannot detect a significant difference of forecast accuracy between the two competing models, we show that the OEM-based forecast model that reveals a stable long-run money demand encompasses the CEM-based version for the CEE countries.
    Keywords: inflation forecasts,monetary overhang,money demand stability,CEE countries,currency substitution
    Date: 2018–12
  3. By: Hsu, Wen-Tai (School of Economics, Singapore Management University); Ma, Lin (National University of Singapore)
    Abstract: The household registration system (hukou system) in China has hampered rural-urban mi-gration by posing large migration friction. The system has been gradually relaxed in the past few decades, but the reforms have been differential in city size and by the coastal-inland di-vide. We find a striking contrast in the migration patterns between years 2005 and 2015; rural people tended to move more to the coastal urban region in 2005, but more to the inland urban region in 2015. We calibrate a spatial quantitative model to the world economy in both years with China being divided into the rural, coastal urban, and inland urban regions. We find that alternative urbanization policies that are not differential and that are more laissez-faire would substantially improve national welfare, in magnitudes that are comparable to the welfare gains from the trade liberalization that China has put in place in the past.
    Keywords: Hukou system; household registration system; differential reform; urbanization policy; economic development; spatial quantitative analysis
    Date: 2020–03–01
  4. By: Diep Phan (University of Wisconsin, Madison); Ian Coxhead (University of Wisconsin–Madison)
    Abstract: A persistent public-private sector difference in returns to skills is one sign that Vietnam’s transition from command to market economy remains incomplete. Matching this is large gap in post-compulsory education enrollments favoring children from families with members employed by government or state enterprises. We compare that gap between 2004 and 2014, a decade during which Vietnam experienced a boom in private-sector and foreign-invested economic activity. Despite the boom, we find a persistent and widening enrollment gap between “state” and “nonstate” households which are similar in other observable respects. This institutional gap is not the only basis for enrollment differences—the ethnicity gap has also widened, even as rural-urban disparities have diminished—but they may contribute to slow and unequal progress in overall educational attainment. Unless addressed, enrollment gaps are likely to worsen intergenerational inequality and may reduce long-run economic growth.
    Keywords: schooling, developing countries, Inequality, state-owned enterprises, Vietnam
    JEL: I24 I25 J24 O15 P23
    Date: 2020–04
  5. By: Bansak, Cynthia (St. Lawrence University); Jiang, Xuan (Ohio State University); Yang, Guanyi (St. Lawrence University)
    Abstract: We find a strong positive sibling spillover effect in two-children households in rural China, as measured by an increase in the Chinese and Math test scores of elder siblings when their younger sibling starts school. We use the Chinese Law of Compulsory Education as an exogenous variation in the timing of school enrollment to control for the impact of simultaneous and unobserved out-of-sibship factors. The mechanism for the sibling spillover likely comes from an increase in studying interactions within the sibling pairs. The spillover is prompted by having a younger sister enter school and is the strongest when both children are daughters. However, the son-preference culture emphasized in certain regions negatively offsets the positive sister-led spillover.
    Keywords: human capital, peer effect, sibling spillover, school cutoff, son preference, intrahousehold allocation, rural China
    JEL: E24 C68 J30
    Date: 2020–04
  6. By: Bachev, Hrabrin
    Abstract: Despite the great theoretical and practical significance, in Bulgaria there are no comprehensive analysis of the state and evolution of the system of agricultural information, training and advices in Bulgaria. The goal of this paper is to analyze the state and evolution of the system of agricultural information, training and advices in Bulgaria during the period after country’s EU accession, identify major trends in that area, make a comparison with other EU states, specify main problems, and suggest conclusions for improvement of policies during next programing period. The analysis has found out that in years after accession of the country to EU the number of the farm managers who undertook full agricultural training increases, but despite that almost 93% of them are still with practical experiences and without any agricultural training. The extent of participation of rural areas rests weak and constantly decreasing, and Bulgaria is among the last in EU in hours of formal and informal education and training. In years of EU membership the number of provided consultations is doubled and in recent years 17% of all registered agricultural producers and each tenth farmer in the country are consulted while the subjects of provided consultation widened. Also hundreds of events associated with knowledge and innovation transfer and sharing are organized as most of them are jointly organized by the National Advisory Service with the institutes of Agricultural Academy, agrarian and other universities, research and development organizations. The number of organized events, the overall number of participants, and the average number of participant per event tend to decrease.
    Keywords: training, consultation, advices, agriculture, AKIS, Bulgaria
    JEL: Q1 Q13 Q14 Q15 Q16 Q18
    Date: 2019–09
  7. By: Houliston, Linda; Ivanov, Stanislav Hristov (Varna University of Management); Webster, Craig
    Abstract: This paper investigates the official tourism websites for the Balkan countries of Albania, Bosnia and Herzegovina, Bulgaria, Croatia, Greece, Montenegro, North Macedonia, Romania, Serbia, Slovenia, and Turkey to learn about its depiction of the nation for an international tourism market. The research combines Pauwels’ (2012) multimodal discourse analysis method designed for cultural websites with Smith’s (1998) six main institutional dimensions to seek out potential nationalistic patterns involving the state, territory, language, religion, history, and rites and ceremonies. The findings mostly involve verbal and visual signifiers that have a historical context to them such as antiquity, communism, Yugoslavia, religion, irredentism, the Ottoman Empire, and national identity. The findings illustrate that official websites, while being sensitive not to alienate international tourists, portray a sense of nationalism but do so in a different way, based upon the historical experiences and unique features of each country surveyed.
    Date: 2020–04–14
  8. By: Oezer Karagedikli (South East Asian Central Banks (SEACEN)); Ole Rummel (South East Asian Central Banks (SEACEN))
    Abstract: It has been argued that credit-to-GDP gaps (credit gap) are useful early warning indicators for banking crises. In addition, the Basel Committee on Banking Supervision has also advocated using these gaps - estimated using a one-sided Hodrick-Prescott filter with a smoothing parameter of 400,000 - to inform policy on the appropriate counter-cyclical capital buffer. We use the weighted average representation of the same filter and show that it attaches high weights to observations from the past, including the distant past: up to 40 lags (10 years) of past data are used in the calculation of the one-sided trend/permanent component of the credit-to-GDP ratio. We show how past data that belongs to the ‘old-regime’ prior to the crises continue to influence the estimates of the trend for years to come. By using narrative evidence from a number of countries that experienced deep financial crises, we show that this leads to some undesirable influence on the trend estimates that is at odds with the post-crisis environment.
    JEL: J31 J64
    Date: 2020
  9. By: Hu, Sijie
    Abstract: This paper uses the genealogical records of 35,691 men to test one of the fundamental assumptions of the Malthusian model. Did higher living standards result in increased net reproduction? An empirical investigation of China between 1400 and 1900 finds a positive relationship between social status and fertility. The gentry scholars, the Confucians, produced three times as many sons as the commoners, and this status effect on fertility was stronger in the post-1600 period than in the pre-1600 period. The effect disappears once I control for the number of marriages. Increased marriages among upper-class males drove reproductive success in Imperial China. The results add a demographic perspective to explain the lack of modern economic growth in Imperial China.
    Keywords: fertility; social status; marriages; reproductive success; Malthusian mechanism; China
    JEL: J13 J12 N35
    Date: 2020–04–01
  10. By: Qiu, Yun; Chen, Xi; Shi, Wei
    Abstract: This paper models the local and cross-city transmissions of the novel coronavirus in China between January 19 and February 29 in 2020. We examine the role of various socioeconomic mediating factors, including public health measures that encourage social distancing in local communities. Weather characteristics two weeks ago are used as instrumental variables for causal inference. Stringent quarantine, city lockdown, and local public health measures imposed since late January significantly decreased the virus transmission rate. The virus spread was contained by the middle of February. Population out ow from the outbreak source region posed a higher risk to the destination regions than other factors including geographic proximity and similarity in economic conditions. We quantify the effects of different public health measures in reducing the number of infections through counterfactual analyses. Over 1.4 million infections and 56,000 deaths could have been avoided as a result of the national and provincial public health measures imposed in late January in China.
    Keywords: 2019 novel coronavirus,transmission,quarantine
    JEL: I18 I12 C23
    Date: 2020
  11. By: Alexander Lehmann
    Abstract: The deep involvement of a number of euro-area banking groups in central and southeastern Europe has benefitted the host countries and has strengthened the resilience of those banking groups. But this integration has become less close because of post-financial crisis national rules that require banks to hold more capital at home, or other ring-fencing measures. There is a risk integration might be undermined further by bank resolution planning, which is...
    Date: 2019–11
  12. By: Elma Hasanovic (Central Bank of Bosnia and Herzegovina)
    Abstract: The purpose of this paper is to evaluate the performance of some leading univariate and multivariate models: ARIMA, the standard OLS VAR and Bayesian VAR models, in forecasting inflation in Bosnia and Herzegovina. Although the presented models are small and highly aggregated, they provide a convenient framework to illustrate practical forecast issues. Furthermore, they are a good starting point in the process of the forecast development. The empirical part of this paper estimates the domestic and international transmission effects on inflation and tries to find good predictors of the inflation. A variety of inflation indicators included in the VAR models are assessed as potential predictors of inflation. They have been suggested by economic theory and existing research. A pseudo out-of-sample forecast approach is employed to assess the models’ performance at different horizons using a recursive strategy. The study then evaluates the relative forecast performance of univariate model and various alternative specifications of the VAR models and offers conclusions. The results confirm the significant improvement in forecasting performance at all forecast horizons when Bayesian techniques, which incorporate information from the likelihood function and some informative prior distributions, are used.
    Keywords: Bayesian VAR, model selection, inflation forecasting
    Date: 2020–02–25
  13. By: Vu, Tien; Yamada, Hiroyuki
    Abstract: Based on the “winner-loser” scheme, we examine the possible impacts of enterprise zones (EZs) on local Vietnamese households between 2002 and 2008, using differences-in-differences and a panel-event study. We layer four waves of household surveys using a census of EZs in 2007, based on the same commune identity for our household and individual analyses. Within five years of EZ establishment, we find they are associated with higher household incomes, an increase in private property prices, and an increase in working hours. However, we do not find a significant impact on household living expenditure or school attendance/working probabilities among members aged between 7 and 17 years. Neither do we find a significant impact on health outcomes.
    Keywords: Enterprise zone; Health; Household; Income; School Attendance; Vietnam
    JEL: D1 O12 O18 P36
    Date: 2020–04–06

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