nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒02‒27
nine papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. The effects of the war on the Ukraine economy: The situation at the end of 2022 By Heinonen, Lauri; Korhonen, Iikka
  2. Ex-Prisoners and the Labour Market in the Czech Republic By Klara Kantova
  3. The impact of alternative childcare policies on mothers' employment in selected EU countries By Narazani, Edlira; Agúndez García, Ana; Christl, Michael; Figari, Francesco
  4. The long-term impact of religion on social capital: lessons from post-war Czechoslovakia By Štěpán Mikula; Tommaso Reggiani; Fabio Sabatini
  5. Analysing the rising oil price shock driven by Russia-Ukrainian tensions - effect on inflationary pressure in South Africa By Dr Jan Roan Neethling
  6. Regional Capital No More. How the Reform of the Territorial Government has Marginalized Polish Middle-sized Cities By Borys Cie?lak; Paula Nagler; Frank van Oort
  7. Nothing new in the East? New evidence on productivity effects of inventions in the GDR By Ann Hipp; Björn Jindra; Kehinde Medase
  8. Digitalization and Social Protection: Macro and Micro Lessons for Vietnam By Amr Hosny; Alexandre Sollaci

  1. By: Heinonen, Lauri; Korhonen, Iikka
    Abstract: This brief presents an overview of Ukraine's economy before and during the first ten months of the Russo-Ukraine war, as well as some preliminary considerations for the post-war economy. Although Ukraine's economic growth trailed many of its peers in the years leading up the invasion, the country possesses certain economic and institutional strengths over most countries at a similar level of development. While these strengths should make reconstruction less difficult, the situation remains fraught with difficulties. Many of the activities that make the largest economic contributions, particularly to exports, take place in the eastern regions of Ukraine or in the Kyiv capital region. These areas have either been temporarily occupied by Russia or face a greater military threat by Russia than the poorer, more peaceful, western parts of the country. The country's public finances are deeply in deficit, so restoring strong export revenues is critical to Ukraine's economic recovery. As long as the war continues, Ukraine's public finances and military efforts must largely be financed by foreign partners.
    Keywords: Ukraine, recovery, war, Russia
    Date: 2023
  2. By: Klara Kantova (Charles University, Prague, Czech Republic)
    Abstract: This study investigates the effect of ex-prisoners on the unemployment rate at times of low rate of unemployment as well as examines the effect of the unemployment rate on the recidivism rate in the Czech Republic during the period 1992-2018. The Czech Republic has a significant issue with the extensive scale of its prison population, which places a great burden on the Czech economy. Ex-prisoners also represent a cost for the state as they receive social benefits. Another big concern in the Czech Republic is the recidivism rate which reaches huge values every year, ranging from 57% to 75% in the period 1992-2018. To prevent recidivism, it is important to reintegrate released prisoners back into society. In this study, I use the data provided by the Prison Services Yearbooks as well as the data from the Czech Statistical Office. The results indicate no significant effect of released prisoners on the unemployment rate. Further, the results show that when there is a 1% rise in the unemployment rate, it causes an almost 1.1% rise in the recidivism rate.
    Keywords: unemployment rate, ex-prisoners, recidivism rate, Czech Republic, regions
    JEL: J7 J21 J65
    Date: 2023–02
  3. By: Narazani, Edlira; Agúndez García, Ana; Christl, Michael; Figari, Francesco
    Abstract: This paper contributes to the debate on the revision of the Barcelona targets on childcare, as promoted by the European Commission in 2022, that aims to provide childcare for children below the age of 3. Using EUROLAB, a structural model of labour supply that can also accounts for labour demand constraints, we estimate female labour market participation reactions to alternative scenarios of formal childcare policies in European countries with very low child care provision for children below 3. We quantify the potential increases in the labour supply of mothers (at the extensive and intensive margins) in the case of fulfilling potential new targets of childcare provision (40%, 50%, 60% and 65%). Achieving these targets would lead to significantly increased labour supply of mothers especially in countries like Hungary and Poland where the current share of formal childcare and/or female labour participation is low. In countries like Portugal, that are far beyond the existing childcare target, changes in labour supply incentives are instead expected to be moderate. We further show that when accounting for labour demand, the expected final employment effects will be less pronounced, but still positive.
    Keywords: Labour market equilibrium, labour supply, labour demand, structural models, discrete choice, childcare
    JEL: J20 J22 J23 J13
    Date: 2023
  4. By: Štěpán Mikula (Masaryk University, Brno, Czech Republic); Tommaso Reggiani (Masaryk University, Brno, Czech Republic, Cardiff University, Cardiff Business School, Cardiff, United Kingdom, Sapienza University of Rome, Italy); Fabio Sabatini (Sapienza University of Rome, Italy, IZA, Bonn, Germany)
    Abstract: We exploit a historical experiment that occurred in Czechoslovakia after World War Two to study the drivers of social capital accumulation in an extremely unfa- vorable environment. Between 1945 and 1948, the Sudetenland became the scene of ethnic cleansing, with the expulsion of nearly three million German speakers and the simultaneous influx of nearly two million resettlers. Focusing on the areas where at least 90% of the population was forced to leave, we show that the municipalities hosting a church built before 1945 developed significantly higher social capital under the communist rule, which persisted after the dissolution of Czechoslovakia and the current days.
    Keywords: Institutions, migration, conflict, social capital, religion, transition countries
    JEL: D74 L31 N24 N44 N94 O15 Z12
    Date: 2023–02
  5. By: Dr Jan Roan Neethling (Faculty of Economic and Management Sciences, Northwest University, South Africa Author-2-Name: Abigail Stiglingh-Van Wyk Author-2-Workplace-Name: Faculty of Economic and Management Sciences, Northwest University, South Africa Author-3-Name: Author-3-Workplace-Name: Author-4-Name: Author-4-Workplace-Name: Author-5-Name: Author-5-Workplace-Name: Author-6-Name: Author-6-Workplace-Name: Author-7-Name: Author-7-Workplace-Name: Author-8-Name: Author-8-Workplace-Name:)
    Abstract: " Objective - The aim of this paper is to examine the relationship between the CPI, the brent crude oil price, and the PPI for final manufactured goods as well as the Rand/Dollar exchange rate during the past year. The study used South Africa as a proxy for developed countries. The objective is, therefore, to evaluate the effects of the increase in commodity prices on inflation and other macroeconomic variables. Methodology - The study utilised a quantitative methodological approach through the assessment of an econometric model that employed monthly data from January 2017 to May 2022. The paper utilized variables such as CPI, brent crude oil prices, PPI for final manufactured goods as well as the Rand/Dollar exchange rate. Findings - Short- and long-run relationships were established between the variables using the vector error correction model (VECM) and the Johansen co-integration equation methods. The long-run conclusions showed that high brent crude oil prices, high sunflower oil, a depreciating exchange rate and increasingly high PPI levels will lead to an increase in the CPI (Inflation). The results also indicated that oil prices still influence the basic prices of goods and services since all things need to be transported. Novelty - The results of the study showed that a perpetual international and national macro-economic environment is crucial to prevent inflationary pressures and price shocks, while volatile exchange rates unsteady PPI's and significantly high oil and commodity prices causes cost-push inflation. Policy certainty and political stability is important to keep inflation stable and economic growth positive, which could lead to a more self-sufficient economy which are is reliant on political instability as an obstacle for positive future economic growth. Type of Paper - Empirical"
    Keywords: Russian-Ukrainian conflict, economic growth, Brent crude oil prices, PPI, CPI, exchange rates, sunflower oil.
    JEL: E31 E37 E60 E63
    Date: 2022–12–31
  6. By: Borys Cie?lak (Gran Sasso Science Institute); Paula Nagler (Erasmus University Rotterdam); Frank van Oort (Erasmus University Rotterdam)
    Abstract: Among Polish cities facing socio-economic difficulties are the former regional capitals which lost their administrative status due to the 1998 reform, reducing the number of regions from 49 to 16. Making use of this quasiexperimental setting, we assess the impact of the loss of administrative status on the affected cities with difference-in-differences models. Our findings show a significant negative impact on economic and, partly, on other dimensions of development. Restructuring and scaling of devolved regions resulted in ‘leaving places behind’. The problematic socioeconomic trajectories of Poland’s former regional capitals caused or accentuated by the reform suggest a sustained marginalization.
    Keywords: Socioeconomic development, marginalization, decentralization, regional capital status
    JEL: R11 R15 R58
    Date: 2023–01–20
  7. By: Ann Hipp; Björn Jindra; Kehinde Medase
    Abstract: Former socialist systems were considered inferior to Western market economies in terms of innovation and productivity. We provide new evidence on the productivity effects of inventorship in the Soviet-type economy of the German Democratic Republic (GDR). We investigate three types of inventorship: knowledge generation, accumulation and diffusion. By applying a Cobb-Douglas production function using original primary and harmonized productivity data and manually cleaned patent data of the GDR between 1970 and 1989, we show that inventorship contributed to productivity in the industry sectors. This holds for knowledge generation, accumulation and diffusion in general, while in the presence of sufficient local interactive capabilities, international knowledge diffusion did not result in productivity gains. We contribute to empirical evidence on the productivity effects from an alternative system of patenting and innovation.
    Keywords: Soviet-type economy, productivity, inventorship, knowledge
    JEL: P23 L60 O14
    Date: 2023–01
  8. By: Amr Hosny; Alexandre Sollaci
    Abstract: The COVID-19 shock has underscored the importance of digital tools for enhancing the effectiveness and efficiency of social protection systems. Cross-country evidence suggests that digital IDs linked with bank and/or mobile money accounts can improve the delivery of social protection programs and better reach eligible beneficiaries. Using data from the Vietnam Household Living Standard Survey, we present micro simulations on the welfare gains of digital social protection during the pandemic. While digitalization offers opportunities, potential risks would need to be carefully managed. Vietnam is advancing on individual pieces of the digitalization puzzle, including full digital IDs and mobile money, and the next step is to put these pieces together.
    Keywords: digitalization; social protection; Covid-19; welfare gain; digitalization puzzle; micro lesson; government transfer; procurement payment; Mobile banking; Digital financial services; Informal employment; Income; Global
    Date: 2022–09–16
  9. By: Skufi, Lorena; Papavangjeli, Meri
    Abstract: Inflation in Albania dropped below the central bank’s target of 3% in 2012 and has fluctuated below target until end-2021. In this article we investigate the evolution of inflation risks in Albania and its main drivers. We use quantile regressions to estimate the three-month-ahead density forecast of inflation, derived from a Phillips curve for a small open economy. This methodology provides a measure to quantify the uncertainty surrounding the main estimation. The in-sample results reveal significant time variation in the shape of the distribution of inflation and considerable nonlinearities in the effects of the explanatory variables, beyond the volatility. On average the inflation distribution results skewed on the positive side. We find that inflation react more to cyclical conditions and exchange rate movements in the right tail of the distribution.
    Keywords: inflation, quantile regression, changing dynamics
    JEL: E31 E37 E52 E58
    Date: 2022

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