nep-tra New Economics Papers
on Transition Economics
Issue of 2022‒11‒28
ten papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Cryptocurrency, Sanctions and Agricultural Prices: An empirical study on the negative implications of sanctions and how decentralized technologies affect the agriculture futures market in developing countries By Agni Rajinikanth
  2. Do China and Russia Undermine US Sanctions? Evidence from DiD and Event Study Estimation By Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian
  3. Interest rate spreads in Estonia: different stories for different types of loan By Merike Kukk; Natalia Levenko
  4. Public investment crowds in private investment – with ifs and buts By Olegs Matvejevs; Olegs Tkacevs
  5. Is land consolidation policy a solution for rice production and agricultural transformation in Vietnam? By Manh Hung Do; Trung Thanh Nguyen; Ulrike Grote
  6. Measuring Economic Uncertainty for Poland By Stanislaw Bartha; Maria Elena Bontempi
  7. How does fertility affect female employment? Evidence from Albania By Cecilia POGGI; Andrea CINQUE; Juna MILUKA; Claire GUIRAUD
  8. Model of work motivation based on happiness: pandemic related study By Joanna Nie\.zurawska; Rados{\l}aw A. Kycia; Iveta Ludviga; Agnieszka Niemczynowicz
  9. Household disability and time preferences: Evidence from incentivized experiments in Vietnam By Ute Rink; Theresa Rollwage
  10. Political consequences of consumer debt relief By Aidt, Toke; Asatryan, Zareh; Badalyan, Lusine

  1. By: Agni Rajinikanth
    Abstract: The 2022 Russia Ukraine War has led to many sanctions being placed on Russia and Ukraine. The paper will discuss the impact the 2022 Russian Sanctions have on agricultural food prices and hunger. The paper also uses Instrumental Variable Analysis to find how Cryptocurrency and Bitcoin can be used to hedge against the impact of sanctions. The 6 different countries analyzed in this study including Bangladesh, El Salvador, Iran, Nigeria, Philippines, and South Africa, all of which are heavy importers of wheat and corn. The paper shows that although Bitcoin may be volatile compared to other local currencies, it might be a good investment to safeguard assets since it is not correlated with commodity prices.Furthermore, the study demonstrates that transaction volume has a strong relationship with prices.
    Date: 2022–10
  2. By: Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian
    Abstract: A frequently employed argument against imposing international sanctions is that rival superpowers are likely to bust sanctions to simultaneously shield the target, harm the sender, and make a profit. We evaluate the legitimacy of this concern by studying the effect of US sanctions on trade flows between sanctioned and third countries during the period 1995-2019 using panel difference-in-differences estimations and an event study design. Motivated by the claim that China and Russia purposefully undermine US sanction efforts, we test whether target countries' trade with China and Russia increases under US trade sanctions. We find no evidence for systematic sanction busting. Russia does not change its trade patterns with sanctioned countries. Trade of targets of US sanctions with China declines even more than trade with the US. These general patterns are reconfirmed for trade in different groups of commodities. In addition, we find some evidence that a reduction in industrial value added and a devaluation of the domestic currency of the target country are transmission channels through which US sanctions hamper trade with third countries.
    Keywords: Geopolitics,international political economy,international sanctions,trade substitution
    JEL: F13 F14 F50 F51 F52 F53 K33
    Date: 2022
  3. By: Merike Kukk; Natalia Levenko
    Abstract: The paper studies the determinants of the interest rate spreads in Estonia, a country that stands out among European countries for its wide spreads. Four distinct credit markets are considered for housing loans, consumer loans, long-term corporate loans and short-term corporate loans. The paper uses quarterly panel data from 2000Q1–2021Q1. It uses a two-stage approach to disaggregate the observed spread into a component determined by the bank-specific factors and a component determined by the market-specific factors, which is labelled in the literature as the pure spread. For each of the two components, the paper finds substantial differences in the determinants of the spreads across different types of loan. While credit risk is important for long-term corporate and housing loans, operating costs are significant in the segment of short-term loans. Similarities found between the loan markets were that the pure spreads are found to be related to the business cycle and market concentration, while the relationship with interest rate risk is found to be insignificant.
    Keywords: interest rate spreads, interest rate margins, banking sector, housing loans, consumer loans, corporate loans, market concentration
    JEL: G21 G28 D40 E43
    Date: 2022–11–09
  4. By: Olegs Matvejevs (Latvijas Banka); Olegs Tkacevs (Latvijas Banka)
    Abstract: This study explores the relationship between public and private investment using a sample of 33 industrialized economies of the OECD. The methodology relies on the fact that the relation between stocks of public and private capital can affect private investment also in the short term. We demonstrate that the immediate effect of public investment on private investment is either small or statistically insignificant, whereas in the medium to long term, extra public investment crowds in private investment as the latter adjusts in order to bring the stock of private capital closer to its long-term cointegrating relationship with public capital. The estimated median public investment multiplier over a horizon of seven years is around 2, which means that each additional dollar of public investment attracts approximately two dollars of private investment. Additionally, we examine whether the crowding-in effect depends on a country’s institutional quality and the area of public spending. We show that it gets stronger with improvements in the quality of institutions related to the rule of law, government effectiveness and control of corruption. Public investment in economic affairs, education and health infrastructure is the most effective in attracting private investment.
    Keywords: public investment, private investment, crowding in, crowding out, public investment multiplier, local projections, forecast errors, governance quality indicators
    JEL: C23 E22 E62 H54
    Date: 2022–10–05
  5. By: Manh Hung Do; Trung Thanh Nguyen; Ulrike Grote
    Abstract: Since the global food price crisis between 2007 and 2008, governments in developing countries such as Vietnam have paid more attention to food security issues. The government of Vietnam has issued policies to sustain rice land and imposed restrictions upon the transformation of rice land to ensure food security. Land consolidation is important to increase the economies of scale in farming, and understanding its determinants and effects is useful for policy-makers to support agricultural transformation. In this study, we investigate factors affecting the voluntary participation of rice growers in land consolidation and examine the impacts of this participation on crop production costs, poverty, and rural transformation. Our results show that land consolidation is driven by farming efficiency. It significantly decreases land preparation and harvest costs, increases farm income, and reduces poverty. We conclude that land consolidation should be promoted to facilitate the redistribution of farm land from farmers who want to leave agriculture to those who continue to work in agriculture. The redistribution of farmland promotes agricultural transformation by reallocating labor from farm to non-farm sectors.
    Keywords: Rural transformation, Land fragmentation, Non-farm income, Poverty reduction, Simultaneous regression
    JEL: D01 O12 Q12
    Date: 2022–11
  6. By: Stanislaw Bartha; Maria Elena Bontempi
    Abstract: Measuring economic uncertainty is challenging, but it is important for policymakers to address it, especially in countries for which there are virtually no uncertainty indices. This article proposes an index of economic uncertainty for Poland, EURQPL, based on Internet searches for specific terms to capture the level of uncertainty perceived by Internet-using economic agents. Compared to Bontempi et al. (2021) who analysed the US and Italy, the change of country, the use of either Polish or English in the definition of queries and the creation of regional indices offer interesting insights. The national index peaks at times commonly considered uncertain, such as the financial crisis and the coronavirus pandemic. Compared to the EURQ for the US and Italy, our index has a significant peak due to the teachers’ strike, a shock not reported in the literature. Particularly relevant are the terms related to social security and fiscal policy; uncertainty shocks have persistent effects on unemployment. Besides confirming how successfully Internet searches can be exploited in economic research, we highlight how regional indices can be used to study the impact of uncertainty on local economies.
    JEL: C23 C41 D22 G32 L10 O30
    Date: 2022–11
  7. By: Cecilia POGGI; Andrea CINQUE; Juna MILUKA; Claire GUIRAUD
    Abstract: This article inspects the relationship between fertility and employment, providing an explanatory mixed-methods analysis to gauge their nexus for rural and urban Albania over the 2000s. Instrumenting reproductive decision with having two first-born daughters in a 2SLS model of employment, we find that having an additional child influences negatively employment probability for rural mothers, but it does not influence employment decision in urban areas. Rural women are particularly dependent on their fertility decision if they have low levels of education. This effect is not particularly relevant to specific types of rural employment, but it is reinforced by demographic traits of the household, such as if there are seniors in the household or if the partner is working. The analysis highlights that there is a different and relatively worse labour market trajectory experienced by rural women than their urban counterparts. The article then examines qualitatively how structural and contextual settings influence women in their decisions. It inspects the experience of rural women from three distinct rural municipalities, exploring the differential roles that policy could play to favour their insertion.
    Keywords: Autres pays
    JEL: Q
    Date: 2022–09–28
  8. By: Joanna Nie\.zurawska; Rados{\l}aw A. Kycia; Iveta Ludviga; Agnieszka Niemczynowicz
    Abstract: This study aims to enrich the current literature by providing a new approach to motivating Generation Z employees in Poland. Employees need to be motivated in order to be efficient at doing a particular task at the workplace. As young people born between 1995 and 2004 called Generation Z, enter the labour market it, is essential to consider how employees' motivation might be affected. Traditionally identified motivators are known, but many reports indicate that the motivation continues decreasing. This situation causes some perturbations in business and fluctuations of staff. In order to prevent this situation, the employers are looking for new solutions to motivate the employees. A quantitative approach was used to collect new evidence from 200 Polish respondents completing an online survey. The research were conducted before and during pandemic time. We report and analyse the survey results conducted in Poland among representatives of Generation Z, who were employed for at least 6 months. We developed and validated a new approach to motivation using methodologies called Factor Analysis. Based on empirical verification, we found a new tool that connects employee motivation and selected areas of the Hygge concept called Hygge star model, which has the same semantics before and during Covid-19 pandemic.
    Date: 2022–10
  9. By: Ute Rink; Theresa Rollwage
    Abstract: This paper investigates individual time preferences between individuals living in a disability household and those who live in a non-disability household in Vietnam. Using randomized primes together with experimental tasks to elicit time preferences, our empirical results show that individuals living in a disability household are (i) more likely to be present biased, and (ii) more patient. The effects are even more pronounced when the disability happened recently (within the last 8 years). These findings show causal evidence that time preferences differ among more vulnerable groups of society and may be one cause for their often observed adverse socioeconomic conditions.
    Keywords: Impact; Disability, Time preferences, Priming, Vietnam
    JEL: D01 D91 I14
    Date: 2022–09
  10. By: Aidt, Toke; Asatryan, Zareh; Badalyan, Lusine
    Abstract: We study consumer debt relief as a tool of distributive politics and ask if debt relief can influence elections. We utilize quasi-experimental variation generated by a very large debt relief program enacted in the Republic of Georgia by a private foundation that affected every sixth voter. We estimate that the program helped the incumbent candidate linked to the foundation win the 2018 Presidential election, and that its effects persisted into the next election. We show how economic power can translate into political power in polities with de jure competitive elections but with de facto weak accountability.
    Keywords: Consumer debt relief,distributive politics,vote buying,elections
    JEL: D72 E51 O10
    Date: 2022

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