nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒01‒17
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Land Security and Mobility Frictions By Tasso Adamopoulos; Loren Brandt; Chaoran Chen; Diego Restuccia; Xiaoyun Wei
  2. Can Artificial Intelligence Reduce Regional Inequality? Evidence from China By Li, Shiyuan; Hao, Miao
  3. The Dynamics of National Identity and Pride Formation in Ukraine By Tamilina, Larysa
  4. Benchmark Effects from the Inclusion of Chinese A-shares in the MSCI EM index By Stefano Antonelli; Flavia Corneli; Fabrizio Ferriani; Andrea Gazzani
  5. Economic trajectory of the People’s Republic of Bulgaria (1946-1990) By Gomes, Luiz
  6. A study on type, volume and governance of ecosystem services in Bulgarian farms By Bachev, Hrabrin
  7. The Effect of the Euro Changeover on Prices: Evidence from Lithuania By Valentin Jouvanceau
  8. Older Immigrants – New Poverty Risk in Scandinavian Welfare States? By Gustafsson, Björn Anders; Jakobsen, Vibeke; Mac Innes, Hanna; Pedersen, Peder J.; Österberg, Torun

  1. By: Tasso Adamopoulos; Loren Brandt; Chaoran Chen; Diego Restuccia; Xiaoyun Wei
    Abstract: Developing countries are characterized by frictions that impede the mobility of workers across occupations and space. We disentangle the role of insecure property rights from other labor mobility frictions for the reallocation of labor from agriculture to non-agriculture and from rural to urban areas. We combine rich household and individual-level panel data from China and an equilibrium quantitative framework that features the sorting of workers across locations and occupations. We explicitly model the farming household and the endogenous decisions of who operates the family farm and who potentially migrates, capturing an additional channel of selection within the household. We find that land insecurity has substantial negative effects on agricultural productivity and structural change, raising the share of households operating farms by almost 30 percentage points and depressing agricultural productivity by more than 10 percent. Quantitatively, land insecurity is as important as all other labor mobility frictions. We measure a sharp reduction in overall labor mobility barriers over 2004-2018 in the Chinese economy, all of which can be accounted for by improved land security, consistent with reforms covering rural land in China during the period.
    Keywords: land, labor mobility, agriculture, misallocation, household, productivity, China.
    JEL: O11 O14 O4 E02 Q1
    Date: 2022–01–09
  2. By: Li, Shiyuan; Hao, Miao
    Abstract: Based on the analysis of provincial-level data from 2001 to 2015, we find that regional inequality in China is not optimistic. Whether artificial intelligence, as a major technological change, will improve or worsen regional inequality is worthy of researching. We divide regional inequality into two dimensions: production and consumption, a total of three indicators. The empirical research is carried out to the eastern, central and western regions respectively. It is found that industrial intelligence improves the inequality of residents’ consumer welfare among regions, while at the same time there is the possibility of worsening regional inequality of innovation. We also clarify the heterogeneity of the mechanisms that artificial intelligence promotes innovation in different regions.
    Keywords: Artificial Intelligence; Regional Inequality; Innovation; Purchasing Power
    JEL: L25 O32
    Date: 2021–10
  3. By: Tamilina, Larysa
    Abstract: This article examines the process of national identity and pride building among the Ukrainian population. Drawn upon the recent developments in Ukraine, I analyze the relationship between the country’s economic, political, and cultural characteristics and the content of national identification. Special attention is given to the issue of how the current military confrontation with Russia has affected the sense of national identity and pride among the Ukrainians. The analysis is conducted based on the World Values Survey (WVS) data from both the pre-war and the in-war periods. My results suggest that language spoken at home and one’s evaluation of democracy can explain the nature of national identification and pride in Ukraine. In addition, I demonstrate that the way in which the respondents frame the current military confrontation with Russia should affect their sense of national identity and shape their ethnic pride.
    Keywords: National identity, national pride, Ukraine, the WVS, country-specific analysis
    JEL: K00 Z0 Z00
    Date: 2021–09–01
  4. By: Stefano Antonelli (Bank of Italy); Flavia Corneli (Bank of Italy); Fabrizio Ferriani (Bank of Italy); Andrea Gazzani (Bank of Italy)
    Abstract: We study the implications of benchmark indexing for emerging economies by focusing on the inclusion of Chinese A-shares in the MSCI EM index. Making use of a rich dataset on fund allocations and flows between 2015 and 2020, we document an escalating weight of Chinese exposure in mutual funds and an increasing concentration of fund portfolios. We rely on a Bayesian VAR model to show that the inclusion of A-shares in the MSCI EM index has fostered capital flows into China and has, at the same time, reduced the flows to the other emerging economies listed in the same index.
    Keywords: benchmark indices, international portfolio flows, China
    JEL: F21 F36 G11 G15
    Date: 2021–12
  5. By: Gomes, Luiz
    Abstract: The objective of this work is to carry out a historical investigation about the economy of Bulgaria during the period between 1946 and 1990. Throughout this span, the country studied had claimed socialism as its social system. Because of this, the focus of analysis will be on the key features and the historical evolution of the so-called real socialism. The method employed for this is historical prospecting based on data and literature on the subject. The results indicate that the economic, social, and political contradictions of real socialism were the main causes for the end of this regime. To achieve its objective, this work is divided into sections, which are organized according to the most relevant themes for understanding the economic development of the former People’s Republic of Bulgaria.
    Keywords: History, Economics, Europe, Bulgaria, Socialism.
    JEL: N0
    Date: 2021–12–20
  6. By: Bachev, Hrabrin
    Abstract: The products and the variety of direct and indirect benefits that humans receive from nature and the various ecosystems (agricultural, forest, grass, mountain, river, marine, etc.) are commonly known as ecosystem services. Agricultural ecosystems of different types and their specific “agro-ecosystem” services are among the most widespread in the world. In recent years increasing attention is given to the system of (“good”) governance as a key to achieving public, collective, corporate, and private goals in relation to conservation and improvement of (agro)ecosystem services. Nevertheless, in Bulgaria, like in many other countries, there are few studies on the amount and importance of agro-ecosystem services, and the specific mechanisms, modes, factors, and efficiency of their management. This chapter tries to fill the gap and presents the results of a large-scale study on the structure and governance of diverse ecosystem services of Bulgarian farms. Firstly, it identifies the type, amount, and importance of various (provisional, economic, recreational, aesthetic, cultural, educational, supporting, water and air purification, biodiversity preservation, climate regulation, etc.) ecosystem services maintained and “produced” by the Bulgarian farms of different juridical type, size, specialization, and location. The study has found out that country’s farms provide a great number of essential ecosystem services among which provisioning food and feed, and conservation of elements of the natural environment prevail. Secondly, it identifies and assesses the efficiency and complementarities of specific modes and mechanisms of governance of ecosystem services used by the Bulgarian farms. The study had found out that a great variety of private, market, collective, public and hybrid modes of governance of farm activity related to agroecosystem services are applied. There is significant differentiation of employed managerial forms depending on the type of ecosystem services and the specialization of agricultural holdings. Furthermore, the management of agroecosystem services is associated with a considerable increase in the production and transaction costs of participating farms as well as big socio-economic and environmental effects for agricultural holdings and other parties. The factors that mostly stimulate the activity of Bulgarian agricultural producers for protection of (agro)ecosystems and their services are participation in public support programs, access to farmers' advice, professional training, available information, and innovation received direct subsidies from EU and national government, personal conviction and satisfaction, positive experience of others, long-term and immediate benefits for the farm, and integration with suppliers, buyers, and processors. The suggested holistic and interdisciplinary framework for analyzing the system of management of agro-ecosystem services is to be further extended and improved, and more widely and periodically applied in the future. The latter requires systematic in-depth multidisciplinary research in this new area, as well as the collection of original micro- and macro information on ecosystem survives, and forms, efficiency, and factors of their management. The accuracy of analyzes is to be improved by increasing representativeness through enlarging the number of surveyed farms and related agents, applying statistical methods, special "training" of participants, etc. as well as improving the official system for collecting agricultural, agro-economic, and agri-environmental information in the country.
    Keywords: ecosystem services, agriculture, type, amount, governance, importance, Bulgaria
    JEL: Q12 Q13 Q14 Q15 Q18 Q2 Q3 Q5
    Date: 2021–12
  7. By: Valentin Jouvanceau (Bank of Lithuania)
    Abstract: At the aggregate level, I find that the euro changeover did not lead to a significant change in the overall inflation rate between 2015 and 2019 in Lithuania. When the measures are diversified, however, some inflationary effects emerge in sub-categories. I therefore analyze this heterogeneity at the disaggregated level using a large sample of prices that constitutes the CPI from 2010 to 2018. I show that significant price changes have been confined to the low-weighted components of the HICP. This explains why a spike in the overall price level did not occur at the time of the changeover.
    Keywords: Euro changeover, synthetic difference-in-differences, regression discontinuity in time, price changes.
    JEL: E31 F33 L11
    Date: 2021–10–12
  8. By: Gustafsson, Björn Anders (University of Gothenburg); Jakobsen, Vibeke (VIVE - The Danish Centre for Applied Social Science); Mac Innes, Hanna (University of Gothenburg); Pedersen, Peder J. (Aarhus University); Österberg, Torun (University of Gothenburg)
    Abstract: Many European high-income countries face a rapid increase in the number of immigrants from low- and middle-income countries reaching the normal pension age. Thus, it is increasingly relevant to ask: how are older migrants from such countries faring? Here we study poverty rates and determinants of poverty among natives and persons born in Bosnia, Iran, Iraq, Yugoslavia and Turkey living in Denmark or Sweden in 2010. Income data on all such persons aged 65 to 82 living in the two destination countries are analysed. In both Denmark and Sweden, we report much higher poverty rates among the immigrants studied than among natives. Estimated probability models show that being poor is related to a person's education, family status and age, as well as year of arrival in the destination country and the labour market and his or her residential status at the age of 55. However, the labour market in the destination country at the time of arrival also matter. Persons born in Yugoslavia or Turkey who had immigrated to Denmark during the '70s and '80s were more likely to be in poverty in 2010 that their counterparts with the same characteristics who had immigrated to Sweden.
    Keywords: Denmark, Sweden, poverty, older immigrants
    JEL: I32 J14 J15 J61
    Date: 2021–11

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