nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒07‒25
eight papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. War in Ukraine and Western sanctions: How vulnerable are German firms? By Görg, Holger; Jacobs, Anna; Meuchelböck, Saskia
  2. How the Czech government got the pandemic wrong By Bo?ena Kade?ábková; Emilie Ja?ová
  3. The Impact of the War on the Economic Development of Ukraine By Nataliia Slaviuk; Tetiana Bui
  4. Gold, Bitcoin, and Portfolio Diversification: Lessons from the Ukrainian War By Kim Oosterlinck; Ariane Reyns; Ariane Szafarz
  5. The weaponization of global payment infrastructures: A strategic dilemma By Nölke, Andreas
  6. Sustainable Stocks and the Russian War on Ukraine - An Event Study in Europe By Andreas Kick; Horst Rottmann
  8. Wealth Inequality in Interwar Poland By Marcin Wroński

  1. By: Görg, Holger; Jacobs, Anna; Meuchelböck, Saskia
    Abstract: Russia's invasion of Ukraine has led to a sudden reassessment of political and economic relations with Russia, including financial and trade relations. This policy brief analyzes a new firm-level dataset for Germany to examine the involvement of German firms in the Russian and Ukrainian markets. We analyse the impact of the annexation of Crimea and related sanctions in 2014 and identify the degree and shape of vulnerability of German trade with respect to these two markets on the firm level. The firm-level data reveals that Russia and Ukraine have become less important as trading partners at both the extensive margin and the intensive margin. So far, recovery effects have been observed merely for German-Ukrainian trade. Within the group of firms trading with Russia and Ukraine, we see a clear heterogeneity, which in turn is reflected in individual vulnerability towards the affected markets.
    Keywords: Russia,Ukraine,Sanctions,War,Vulnerability,International Trade,Firms,Russland,Ukraine,Sanktionen,Krieg,Verwundbarkeit,Internationaler Handel,Unternehmen
    Date: 2022
  2. By: Bo?ena Kade?ábková (University of Economics, Prague); Emilie Ja?ová (Faculty of Social Sciences, Charles University in Prague)
    Abstract: The aim of the article is to prove by econometric analysis the suitability of NAIRU and NARRU concepts to assess the adequacy of measures against Covid 19 to address the epidemiological and economic situation in the Czech Republic. The analysis confirmed that in the Czech Republic the economy was reduced together with the escalation of the epidemic. The same development was found in the period March, April, October, November and December 2020 and February 2021. The government was therefore to take the path of greater prevention of the disease (eg timely adequate respirators, tests and vaccines). On the contrary, in January, February, May, June, July, August and September 2020 and January 2021, a lower value of NAIRU indicates an epidemiological-economic balance in the economy even with a higher unemployment rate. This is a consequence of the hasty tightening of anti-epidemiological restrictions.
    Keywords: Phillip´s curve, NAIRU, NARRU, phases of the economic cycle, unemployment
    JEL: E24 E32 E37
    Date: 2021–07
  3. By: Nataliia Slaviuk; Tetiana Bui
    Abstract: As of summer 2022, the war in Ukraine has lasted more than three months, caused the deaths of thousands of people, and ruined the lives of millions. It has impacted the world economy and affected Ukraine severely, ruining industries as well as causing massive migration, a decrease in household income, and an increase in the budget deficit and government debt. As the war continues, it will deepen the negative effects on the economy. We think that one of the reasons for Russia’s aggression is Ukraine’s desire to integrate into the Western world and its economic development over the last years. We believe that joint efforts of the Ukrainian government, European institutions, and civil society will help end the war and rebuild the country.
    Date: 2022
  4. By: Kim Oosterlinck; Ariane Reyns; Ariane Szafarz
    Abstract: How do major disruptive events, such as wars, affect the correlations between gold, Bitcoin, and financial assets? We address this question by estimating a dynamic conditional correlation (DCC) model before and during the 2022 Russian invasion of Ukraine. The results show that, after the outbreak of the war, the correlation between gold and stock markets dropped, confirming the diversification potential of gold during crises. The correlation between Bitcoin and oil declined as well. Meanwhile, the gold/Bitcoin correlation slightly decreased. Overall, our preliminary evidence suggests that gold and Bitcoin act as complements—rather than substitutes—for diversification purposes during international crises.
    Keywords: Bitcoin; Gold; Portfolio diversification; 2022 Russian invasion
    JEL: G11 G15 F65 E44
    Date: 2022–06–29
  5. By: Nölke, Andreas
    Abstract: The sixth sanction package of the European Union in the context of the aggression against Ukraine excludes Sberbank, the largest Russian bank, from the SWIFT network. The increasing use of SWIFT as a tool for sanctions stimulates the rollout of alternative payment information systems by the governments of Russia and China. This policy white paper informs about the alternatives at hand, as well as their advantages and disadvantages. Careful reflection about these issues is particularly important, given the call for an "Economic Article 5" tabled for the next NATO meeting. Finally, the white paper highlights the need for institutional reforms, if policymakers decide to return SWIFT to the status of a global public good after the war.
    Keywords: Ukraine,Russia,Sanctions,SWIFT
    Date: 2022
  6. By: Andreas Kick; Horst Rottmann
    Abstract: The popularity of sustainable investments is unbroken and attracts investors and researchers alike. Modelling the properties of such ‘green’ firms, Pástor, Stambaugh, and Taylor 2021 consider a hedge against climate risks in their theoretical model. Likewise, it could be assumed that companies with high social scores might offer a protection against related events. On February 24, 2022 with the Russian invasion on Ukraine one of the biggest events imaginable came to pass. Using standard event study methodology we analyse if and how Refinitiv’s ESG-ratings, as well as the CO2 intensity, influence the cumulative abnormal returns during different event windows. We find that the abnormal returns of companies with high ecological scores are positively influenced in the pre and post-event window. However the effects are of no economical relevance. Therefore our results do not fully support the hypothesis of an ‘ESG-hedge’ against such an extreme event. If such an effect exists, it was superimposed by other properties accounting for stability and defensiveness.
    Keywords: abnormal returns, war, Ukraine, ESG
    JEL: G11 G14 M14
    Date: 2022
  7. By: Eduard Hromada (Faculty of Civil Engineering, Czech Technical University in Prague)
    Abstract: The paper deals with the analysis of the current situation on the real estate market in the Czech Republic in connection with the COVID-19 pandemic. Selected pricing and technical parameters such as prices of apartments for sale, prices of apartments for rent, technical condition of the apartments and energy performance of the building are analysed. To obtain input data for the analysis was used software EVAL, which the author of the paper has been developing since 2007. The software EVAL collects, analyses and evaluates real estate advertising in the Czech Republic in a monthly period. All real estate advertising is continuously recorded in the software database and is carefully analysed for its credibility. EVAL software provides comprehensive and objective information on the actual development of the real estate market in the Czech Republic. The paper uses basic statistical methods of processing a large data set.
    Keywords: Real estate market, EVAL software, Real estate prices, Statistical methods, Data mining
    JEL: C10 R20 R30
    Date: 2021–07
  8. By: Marcin Wroński (SGH Warsaw School of Economics)
    Abstract: In 1923 Poland introduced an extraordinary wealth tax. We use the internal statistics of the Ministry of the Treasury to estimate wealth inequality in interwar Poland. This data source has not been previously used by researchers. There are no estimates of wealth inequality in interwar Poland available in the literature. According to our estimates, the top 0.01% of the wealth distribution controlled 16.4% of total private wealth. The wealth share of the top 1% stood at 42.5%. The top decile owned 67.3% of total private wealth. Wealth inequality varied strongly across regions. A comparison of wealth inequality in Poland with wealth inequality in other European countries in the interwar period yields a diverse picture. The wealth share of the top 0.01% was the highest in Europe, the wealth share of the top 1% was in the middle of the European ranking, the wealth share of the top 10% was almost the lowest in Europe. The small elite of super-rich (0.01%) was very wealthy in comparison to the European peers, but the wealth share of the rest of the top decile was relatively low. The unequal development of former partitions may partially explain high very top wealth shares.
    Keywords: wealth distribution,inequality,Poland,interwar
    Date: 2022–03

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