nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒05‒08
nine papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Economic sanctions against Russia: How effective? How durable? By Jeffrey J. Schott
  2. The bank lending channel and monetary transmission in Central, Eastern and South-Eastern European countries By Papavangjeli, Meri
  3. What If She Earns More? Gender Norms, Income Inequality, and the Division of Housework By Magda, Iga; Cukrowska-Torzewska, Ewa; Palczyńska, Marta
  4. Integrating of PLS-SEM and the Importance Performance Matrix Analysis to Exploring the Role of Provincial Competitiveness Index to Growth By Ho Dan Doan, Tam; Thai Thuong Le, Quan; Nguyen, Quyen Le Hoang Thuy To; Nguyen, Phong Thanh; Thi Ngoc Dang, The
  5. Policy Responses to High Energy and Food Prices By David Amaglobeli; Mr. Gee Hee Hong; Emine Hanedar; Celine Thevenot; Mengfei Gu
  6. Combining monetary, fiscal and structural approaches to model Albanian inflation By Papavangjeli, Meri
  7. Sustainable Economic Growth: A Critical Assessment of SDG 8.1 By Ahlerup, Pelle; Olsson, Ola
  8. Mismatch in Preferences for Working from Home – Evidence from Discrete Choice Experiments with Workers and Employers By Lewandowski, Piotr; Lipowska, Katarzyna; Smoter, Mateusz
  9. Who uses green mobility? Exploring profiles in developed countries By Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto

  1. By: Jeffrey J. Schott (Peterson Institute for International Economics)
    Abstract: Economic sanctions by Western democracies against Russia have not stopped the war and attacks on Ukrainian civilians. Together with continued economic and military support for Ukraine, however, sanctions are blocking Russian president Vladimir Putin from achieving his territorial objectives. Sanctions have contributed to a sharp compression of Russian imports; forced Russia's military and industry to source from more costly and inefficient suppliers at home and abroad; and slowly begun to squeeze Russian government finances. The G7 countries must sustain and augment their efforts, including by confiscating frozen reserves of the Central Bank of Russia to help fund Ukraine's reconstruction. G7 policymakers need to derive lessons from the current crisis about the utility of sanctions in conflicts between major powers. Maintaining coherent and coordinated sanctions against large and powerful target countries is critical for the effectiveness and durability of the policy. Deploying sanctions against such rivals also requires a long-term commitment to the implementation and enforcement of the trade and finance restrictions. Sanctions impose costs on both the target country and those imposing the sanctions, so Western policymakers need to offset those costs via domestic support or tax relief to sustain political support over time for sanctions in big power conflicts.
    Date: 2023–04
  2. By: Papavangjeli, Meri
    Abstract: Using disaggregated data for 266 individual banks from Bankscope database and other supplementary sources, this article investigates the functioning of the bank lending channel and monetary transmission in 10 Central, Eastern and South-Eastern European (CESEE) countries over the period 2010-2018. It also takes into account the banks’ characteristics such as: size and capitalisation, classifying the countries in three groups according to the development level of their banking sector, captured by the EBRD banking reform criteria. Results confirm the theory of bank lending channel, with smaller banks being more sensitive to monetary contractions in less developed financial systems. Capitalisation has a positive effect on loan growth, and changes in funding costs have the most significant impact on small and less capitalised banks. GDP growth and inflation have a positive impact on loan growth in all country groups.
    Keywords: bank lending channel; size and capitalisation; monetary transmission
    JEL: C51 E51 G21 P34
    Date: 2021–07–10
  3. By: Magda, Iga (Warsaw School of Economics); Cukrowska-Torzewska, Ewa (University of Warsaw); Palczyńska, Marta (Institute for Structural Research (IBS))
    Abstract: Using data from "Generation and Gender Survey" for Poland, we study the relationship between women's relative income within the household, as measured by the female share of total household income, and women's involvement in housework. We find that households in which the woman contributes more to the total household income are more likely to share housework equally. We also find that individual gender norms matter both for women's involvement in unpaid work at home and for the observed link between the female share of income and inequality between the partners in the division of housework. Women from less traditional households are found to be more likely to share housework equally. However, this negative relationship between the female share of household income and female involvement in housework is not observed among more traditional couples.
    Keywords: household income, income inequality, housework, gender norms
    JEL: D10 D13 D31 J12 J16 J22
    Date: 2023–03
  4. By: Ho Dan Doan, Tam; Thai Thuong Le, Quan; Nguyen, Quyen Le Hoang Thuy To; Nguyen, Phong Thanh; Thi Ngoc Dang, The
    Abstract: Provincial competitiveness was one of the engines of growth under the institutional theory. The Vietnam Provincial Competitiveness Index (PCI) has been surveyed since 2005 to reflect the perceptions of local business environments, categorized into 10 sub-indices with 128 indicators. The current PCI has challenged the governance due to its broad construction. This study aimed to reconstruct the indicators in each PCI sub-index to be more specific for improving governance. The paper further explored the importance-of performance of both the PCI sub-index and its indicators to the provincial growth in Vietnam. Secondary data of 63 provinces during the period of 2017-2020 have been used with the employment of Exploratory Factor Analysis (EFA), Partial Least Square Structural Equation Model (PLS-SEM), and the extension of the importance-performance matrix analysis (IPMA). Our results showed the reliability and validity of 21 measured items under 5 PCI sub-indices. The findings confirmed the positive impact of the PCI index on growth. Moreover, the highest importance but lowest performance of SLO (law and order) was implied. SLA (land access and security of tenure), on the contrary, peaked the performance with the lowest importance. The importance of STC (time costs and regulatory compliance), SPA (proactive provincial leadership), and SLP (labor quality) has been ranked with the former sharing the highest priority while similar performance of the four sub-indices has been found. The results implied that the provincial authorities should prioritize their efforts to improve governance based on the importance-performance analysis of PCI sub-indices. Moreover, the importance and performance of each sub-index indicator reflected the great governance improvement with an average performance of 50%. However, special attention should be focused on vocational training, effective state officials, and legal support to the business due to their high importance but low performance.
    Keywords: Exploratory factor analysis (EFA), importance-performance matrix, Partial Least Square (PLS), Structural Equation Model (SEM), provincial competitiveness index (PCI), Vietnam
    JEL: F63 H5 O1 O2 P25 R1
    Date: 2022–02
  5. By: David Amaglobeli; Mr. Gee Hee Hong; Emine Hanedar; Celine Thevenot; Mengfei Gu
    Abstract: The surge in energy and food prices, which was amplified by Russia’s invasion of Ukraine, has prompted a flurry of policy responses by countries during 2022. The aim of these policy responses was to mitigate social and economic impact of higher prices. In this paper we document announcements of policy measures based on the Database of Energy and Food Price Actions (DEFPA), which was developed based on two rounds of survey responses of IMF country teams conducted in March/April and June/July of 2022. The paper also provides discussion on policy trade-offs when considering appropriate policy responses both for countries with strong and weak social safety nets. Key policy message is that providing targeted support to households in the form of cash transfers is the most cost-effective way of alleviating the burden on vulnerable households and have to be preferred over broad-based mechanisms that prevent international prices to pass through to domestic consumers.
    Keywords: Energy prices; food Prices; cost of living; social policy
    Date: 2023–03–24
  6. By: Papavangjeli, Meri
    Abstract: Amidst the prevailing global economic uncertainty and rising commodity prices, this article investigates empirically the driving forces of inflation in Albania through combining several approaches, focusing especially on the developments in the food sector in general and cereals in particular, during the period from 2000 to 2022. Considering four measures of inflation such as: cereals, food, non-food, and headline inflation, it analysis the effects of domestic and foreign factors on inflation, using a vector error correction model (VECM), which allows to capture both the short-term and long-term effects. The study also considers the fiscal sector in examining inflation dynamics, which has been neglected so far in the current studies on this topic. The empirical analysis finds that domestic inflation is underpinned by disequilibria in the monetary, cereals and non-food sectors; in the short-run, inflation is driven by structural factors (particularly agricultural output gap and imported inflation), as well as demand-side factors (especially money growth and public sector borrowing).
    Keywords: inflation; monetary, fiscal, structural factors
    JEL: E30 E50 E62 Q11
    Date: 2022–07–10
  7. By: Ahlerup, Pelle (Department of Economics, School of Business, Economics and Law, Göteborg University); Olsson, Ola (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: In this report, we focus on the Sustainable Development Goal (SDG) target 8.1, stipulating that countries should pursue real GDP per capita growth rates that are in accordance with their national circumstances and that total GDP should grow by more than seven percent a year in the least developed countries. We start by briefly discussing the background of this target and then review some of the existing research on economic growth across the world, starting with growth theory and its predictions concerning the convergence of growth rates and income levels in the short and long term. We also review the extensive empirical work on cross-country income and growth regressions that have accumulated during the last three decades, focusing on recent (pre-covid) and historical patterns regarding the fulfillment of the SDG 8.1 targets. We show that a growth rate in total GDP of seven percent per year has only been observed in about 10 percent of all available country-year observations over history. Growth rates exceeding seven percent were relatively frequent among poor countries during 2000-2009 but not during 2009-2019. Since 2000, the relatively high average growth rates among poor countries have implied that their income levels have steadily converged towards those of richer countries, although at a slow pace. This pattern is manifested in longer periods of sustained growth episodes in poor countries and can probably be explained by successful policy reforms. We also show that about a third of all countries managed to have positive economic growth during 2010-19 while at the same time decreasing their emissions of CO2 from production (decoupling). For poor and rich countries alike, the growth prospects post-covid and after Russia’s invasion of Ukraine, are uncertain.
    Keywords: economic growth; sustainable development goals; convergence; SDG 8.1
    JEL: N10 O47 O57
    Date: 2023–04
  8. By: Lewandowski, Piotr (Institute for Structural Research (IBS)); Lipowska, Katarzyna (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS))
    Abstract: We study workers' and employers' preferences for remote work, estimating the willingness to pay for working from home (WFH) using discrete choice experiments with more than 10, 000 workers and more than 1, 500 employers in Poland. We selected occupations that can be done remotely and randomised wage differences between otherwise identical home- and office-based jobs, and between otherwise identical job candidates, respectively. We find that demand for remote work was substantially higher among workers than among employers. On average, workers would sacrifice 2.9% of their earnings for the option of remote work, especially hybrid WFH for 2-3 days a week (5.1%) rather than five days a week (0.6%). However, employers, on average, expect a wage cut of 21.0% from candidates who want to work remotely. This 18 pp gap in the valuations of WFH reflects employers' assessments of productivity loss associated with WFH (14 pp), and the additional effort required to manage remote workers (4 pp). Employers' and workers' valuations of WFH align only in 25-36% of firms with managers who think that WFH is as productive as on-site work.
    Keywords: working from home, remote work, discrete choice experiment, willingness to pay
    JEL: J21 J31 J81
    Date: 2023–03
  9. By: Echeverría, Lucía; Gimenez-Nadal, J. Ignacio; Molina, José Alberto
    Abstract: Mobility gives individuals access to different daily activities, facilities, and places, but at the cost of imposing environmental externalities. The sustainable growth of society is linked to green mobility (e.g., public transport, walking, cycling) as a way to alleviate individual carbon footprints. This study explores the socio-demographic profile of individuals performing green travel (public and active modes of transport) and identifies cross-country differences in green travel behavior. We rely on information from the Multinational Time Use Study, MTUS, for Bulgaria, Canada, Spain, France, Hungary, Italy, the Netherlands, the United Kingdom, and the United States, from 2000 to 2019. We estimate Ordinary Least Squares regressions modelling individual decisions regarding green mobility. Our results indicate that the socio-demographic and family profile of travelers is not homogenous across green modes of transport, with walking as a mode of travel exhibiting a much more consistent profile, across countries, in comparison to the use of public transport and cycling. Results indicate that some countries are more prone to green travel, and that transport infrastructure is a factor in the proportion of time spent on both public and active transport. Our findings help in understanding who is committed to green mobility, while revealing interesting systematic differences across countries
    Keywords: Perfil del Viajero; Medios de Transporte; Transporte No Motorizado; Transporte Público; 2000-2019;
    Date: 2022–09

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