nep-tra New Economics Papers
on Transition Economics
Issue of 2023‒08‒14
ten papers chosen by
Maksym Obrizan
Kyiv School of Economics

  1. Assessing the economic resilience in central and eastern EU countries. A multidimensional approach By Ifrim, Mihaela; Lazorec, Maria; Pintilescu, Carmen
  2. Blowback: The Effect of Sanctions on Democratic Elections By Matthieu Crozet; Julian Hinz
  3. Trade and Investment Cooperation between South Korea and the Visegrad Group By Mazur, Grzegorz
  4. Comrades in the family? Soviet communism and demand for family insurance By Costa-Font, Joan; Nicińska, Anna
  5. Laws of Economics under Socialism By Gindler, Allen
  6. Accident-Induced Absence from Work and Wage Ladders By Anikó Bíró; Márta Bisztray; João G. da Fonseca; Tímea Molnár
  7. Making sense of multi-level and multi-actor governance of recovery in Ukraine By Oksana Udovyk; Ievgen Kylymnyk; Daniel Cuesta-Delgado; Guillermo Palau Salvador
  8. Teacher awareness of academic integrity in regional higher education institutions in Latvia By Anita Pipere; Dzintra Ili?ko; Je?ena Davidova; Sandra Zari?a; Irena Kokina
  9. Assessing Benefits from Demand Response (DR) Program in the Different Climatic Zones of Georgia on the Example of Residential PV Installations By Ekaterine Maglakelidze; Eka Gegeshidze; Nino Jgamadze; Irakli Malaguradze; Maia Veshaguri
  10. Fiscal Rules and Post-Pandemic (Covid19) Economic Recovery By Sulkhan Tabaghua

  1. By: Ifrim, Mihaela; Lazorec, Maria; Pintilescu, Carmen
    Abstract: The concept of economic resilience has become a key topic in the economic literature since the crisis of 2008 and the current sanitary crisis brought back to the attention of researchers the need to identify the elements that allow the absorption of a shock and the economic recovery. In the paper, we study the economic resilience assessed by real GDP growth rate and employment rate for eleven CEECs, using annual data from 2000 to 2019. We include in our model 21 variables that reflect the economic, social and institutional dimensions for emphasizing the specificities of CEE countries. The empirical results show that most of CEE countries proved to be resilient either in both their economic output and employment (Croatia, Czech Republic, Hungary, Romania, Slovenia), or in one of these (Bulgaria, Lithuania, Slovakia). Only two countries appear to not have recovered in GDP growth rate and Employment rate (Estonia and Latvia). The analysis of countries specificities, using the principal component regression, highlighted that the social, economic and institutional framework of each country generated distinct responses in terms of resilience. The strengthening of the institutional dimension and the importance of education represent essential factors for the growth of economic resilience.
    Keywords: economic resilience, principal component regression, CEE economies.
    JEL: C38 C50 O11
    Date: 2022–03–01
  2. By: Matthieu Crozet (RITM - Réseaux Innovation Territoires et Mondialisation - Université Paris-Saclay); Julian Hinz
    Abstract: Sanctions are meant to coerce political adversaries through economic measures. However, evidence for their effectiveness is scarce. In this paper we assess the impact of sanctions on a democracy-France-by studying the electoral consequences of the sanctions and countersanctions imposed between Russia and Western countries. Contrary to most of the existing literature we find clear evidence for exposure to the sanctions to cause an increase in the vote share for pro-Russian (and far-right) candidates during the French 2017 presidential election. Locally, the impact on voting is substantial. Back-of-the-envelope calculations indicate that about 16, 300 votes for the main far-right candidate can be directly attributed to the sanctions' impact. This is the total number of votes cast in a medium-sized French city. It is however not nearly enough to have affected the outcome of the election at the national level.
    Keywords: Sanctions, Elections, Embargo
    Date: 2023–07–04
  3. By: Mazur, Grzegorz (Poznań University of Economics and Business)
    Abstract: The Visegrad group (V4) is a political alliance of four countries of Central Europe – the Czech Republic, Hungary, Poland and Slovakia, reaching its roots to the beginning of the 1990s, when the countries started reforming their political and economic systems from centrally planned to democratic free market economies. The coalition - consisting of countries with similar historical experience, transformation challenges and level of socio-economic development - aimed at regional co-operation and mutual support on their strategic goal of full membership in the European Union (EU). The V4 countries are currently full members of the EU (since 2004) with dynamic and competitive economies. The four countries form a market of over 60 million consumers with a share of ca. 7.7% of the EU’s GDP (Table 1). Over last three decades V4 countries have experienced high economic growth, closing a development gap with highly developed countries of the EU. Their economies have opened up to the global trading system, changing directions (mostly towards other EU countries) and expanding volumes of their international trade. Liberalizing economies have become attractive destinations for FDIs due to their central location at the continent, well-educated society as well as restructuration and privatization of many economic sectors (Mazur, 2009). Joining the European Union in 2004, V4 countries became part of the European Single Market leading to various consequences for economic policy and business conditions. While membership in the EU brought new economic opportunities and enhanced the countries’ business attractiveness, it has also had relevant consequences for their trade co-operation with third countries. The V4 states adopted all rights and commitments from the EU’s Common Trade Policy and have since been developing their trade and economic co-operation with third countries, including the Republic of Korea, commonly with other EU partners and exclusively at the EU level.
    Keywords: Trade and Investment Cooperation; South Korea and the Visegrad Group
    Date: 2023–07–06
  4. By: Costa-Font, Joan; Nicińska, Anna
    Abstract: We study how exposure to (Soviet) communism (EC), a political-economic regime based on collectivist state planning, affected the preferences for family support, which we refer to as informal family insurance. Against the backdrop that ‘communism gave rise to the abolition of the family’, we document that it actually strengthened the preference (the demand) for informal family insurance without depressing individuals' preferences for social insurance. We exploit cross-country and cohort variation in EC on more than 314, 000 individuals living in 33 Central and Eastern European countries, among which 14 had been subject to communist regimes. We estimate that EC gave rise to 9.6 percentage point (pp) increase in the preference for family care for older parent and 4.3 pp increase in the support (both financial and nonfinancial) for children. These effects are explained by the strengthening of social and family networks that resulted from the erosion of generalized, interpersonal and institutional trust, rather than by ‘indoctrination effects’ during Soviet communism times.
    Keywords: family insurance; social insurance; interpersonal trust; confidence in institutions; Soviet communism; Eastern Europe
    JEL: B14 B24 P2 P3
    Date: 2023–06–30
  5. By: Gindler, Allen (Cyberrex Associates, Inc.)
    Abstract: This article argues that praxeology, as a general theoretical approach, can explain the emergence of the socialist doctrine. However, socialist laws of economics cannot be derived from praxeology. It is specifically shown that the immutability of market economic laws does not allow society to achieve a full-fledged communist reality. Using the Soviet Union as an example, this article demonstrates that the market economy cannot be eradicated, despite government efforts, but is omni- present even if it is ostensibly outlawed. Also, this article demonstrates that Ludwig von Mises’s conclusion about the principal impossibility of economic calculation under socialism is fully applicable to the highest stage of communism, as theorized in Marxism. In relation to socialism in a broader sense, as the collectivization of the means of production grows, the magnitude of the impairment of economic calculation grows with it. Socialist thinkers failed to rebuff Mises’s reasoning because all their proposals violated the economic uncertainty principle: the exact price structures before the exchange are unknown and are in superposition.
    Date: 2023–07–07
  6. By: Anikó Bíró (Centre for Economic and Regional Studies); Márta Bisztray (Centre for Economic and Regional Studies); João G. da Fonseca (Université de Montréal); Tímea Molnár (Central European University and IZA)
    Abstract: How do temporary spells of absence from work affect individuals’ labor trajectory? To answer this question, we augment a `wage ladder' model, in which individuals receive alternative takeit-or-leave-it wage offers from firms and potentially suffer accidents which may push them into temporary absence. In such an environment, during absence, individuals do not have the opportunity to receive alternative wage offers that they would have received had they remained present. To test our model's predictions and to quantify the importance of foregone opportunities to climb the wage ladder, we use linked employer-employee administrative data from Hungary, that is linked to rich individual-level administrative health records. We use unexpected and mild accidents with arguably no permanent labor productivity losses, as exogenous drivers of short periods of absence. Difference-in-Differences results show that, relative to counterfactual outcomes in the case of no accidents, (i) even short (3-12-months long) periods of absence due to accidents decrease individuals' wages for up to two years, by around 2.5 percent; and that (ii) individuals reallocate to lower-paying employers. The share of wage loss due to missed opportunities to switch employers is between 7-20 percent over a two-year period after returning to work, whereas at most 2 percent is due to occupation switches. Our results are robust to (a) instrumenting absence with having suffered an accident, (b) exploiting the random nature of the time of the accident, and (c) within-firm matching of individuals with and without an accident and subsequent absence spell.
    Keywords: Keywords: wage ladder; accidents; health shocks; temporary absence from work
    JEL: J22 J23 I10
    Date: 2023–07
  7. By: Oksana Udovyk; Ievgen Kylymnyk; Daniel Cuesta-Delgado; Guillermo Palau Salvador
    Abstract: This paper sheds light on the complex recovery governance in Ukraine by providing a snapshot of the evolving national recovery actors' networks and examining them within a multi-level governance framework, using interviews, social network analysis, and a sense-making workshop. It highlights the ambiguity of the multi-level recovery governance structure in Ukraine, which shows characteristics of decentralization while representing a rather centralized machine and tends to be multi-actor while leaving some groups of actors behind.
    Keywords: Decentralization, Social networks, Bottom-up approach, Post-conflict recovery, Decentralized governance
    Date: 2023
  8. By: Anita Pipere (Daugavpils University); Dzintra Ili?ko (Daugvapils University); Je?ena Davidova (Daugavpils University); Sandra Zari?a (Daugvpils University); Irena Kokina (Daugavpils University)
    Abstract: AbstractRecently, the topic of academic integrity (AI) has regained its importance among scholars around the world. In Latvia, from 2019, these issues have been reconceptualized in initiatives of the Ministry of Education and Science and Higher Education Institutions (HEI). Considering the increasing scope of perplexities related to AI in the post-pandemic world, HEIs are in demand of research and academic environment based on a sustainable culture of AI. The given study is tailored to explore awareness of AI issues and views on the implementation of AI in their HEIs of teachers from Latvian regional HEIs. The sample of this study consisted of 11 teachers from four small regional universities in Latvia, working at three study levels (bachelor, master, and doctoral studies). Data were collected using semi-structured interviews consisting of nine open questions. Inductive thematic analysis was applied to qualitative data from the interviews. Teachers showed the good awareness and understanding on Ai, admitting that today AI is considered much more than before. Normative documents of HEI and study courses with integrated topics of AI are used in regional HEIs to communicate AI politics to students and teachers. Advising research work and integrating principles of AI in all study courses were reported as the most frequent forms of teachers? personal activities to prevent students from academic dishonesty. Teachers? suggestions for the promotion of AI were mainly related to the continuation of already implemented activities and adoption of activities administred in other HEIs. The findings of this research have essential implications for regional HEIs in Latvia to improve the communication and procedures of AI policy considering teachers? perspectives. One of the routes for further research would be the triangulation of the views of teachers with the perspectives of students and experts in the field of AI.
    Keywords: awareness, academic integrity, academic dishonesty, university teachers, higher education institutions, Latvia.
    JEL: I23
    Date: 2022–10
  9. By: Ekaterine Maglakelidze (The University of Georgia); Eka Gegeshidze (The University of Georgia); Nino Jgamadze (The University of Georgia); Irakli Malaguradze (The University of Georgia); Maia Veshaguri (Iv. Javakhishvili Tbilisi State University)
    Abstract: We continue the series of investigations toward the market uptake measures of renewable energy systems for achievement of balance between electricity supply and demand in the local electricity market of Georgia. At present the research objective is to assess the benefits of residential customers living in the different climatic zones of Georgia with varied average annual solar radiation and willing to participate in the Demand Response (DR) program so called net-metering (NEM) for the purpose to figure out in which climatic zones of Georgia is more reasonable to make investments in small-scale solar PV plants. For achieving the research objective, the total benefits/costs of residential customers (with the average monthly electricity consumption between 101 kWh and 301kWh) living in four different climatic zones of Georgia (Tbilisi, Batumi, Telavi, and Mestia) and willing to invest in small-scale solar PV installations with the installed capacity of 3, 465 kW and sell excess electricity (capacity) to the grid, is estimated. Besides, the capacity factors for Tbilisi, Batumi, Telavi, and Mestia were determined to illustrate how location affects the actual output of small-scale PV plants.During the study the following research hypothesis has been tested: ?Residential customers can benefit from retail-rate net energy metering if they choose to participate in this program but their benefits depend heavily on the location where PV installations are applied.? Our cost-benefit analyses revealed that solar is often a solution suitable for the geographical needs of remote communities with higher potential of solar radiation.
    Keywords: Demand Response (DR), small-scale solar PV plants, net energy metering (NEM), renewable energy resources, Distributed Energy Resources (DER), Energy Balance, energy efficiency (EE).
    JEL: D19 M31 Q21
    Date: 2022–10
  10. By: Sulkhan Tabaghua (Ivane Javakhishvili Tbilisi State University)
    Abstract: Empirical experience in many countries shows that governments spend more than they can afford. In order to ensure long-term economic stability and support economic growth, most countries have established legal restrictions on fiscal parameters, which significantly reduce the possibility of exceeding the quantitative or qualitative limits set by the government. In economic literature, this type of limitation is known as "fiscal rules". Different topics of fiscal policy have been the subject of scientific research for many years, but research around fiscal rules have become more common in recent times. The actuality of this topic has increased in the conditions of covid19 crisis, which led to the reduction in economic growth in many countries, including Georgia, and a deterioration in a number of macroeconomic parameters (notably, a rapid increase in debt and budget deficit). Pandemic has been a massive test of the fiscal rules.Scientific literatures underline fiscal rules importance for long-term economic growth and macroeconomic sustainability. Thus, the pandemic challenges raise the issue of updating and assessing the effectiveness and flexibility of rules during the economic crisis. During the past two decades, a growing number of countries across the world have adopted rules-based fiscal frameworks. As of end-2021, about 105 economies have adopted at least one fiscal rule, 11 countries more than the last update in 2015 and 96 countries more than 1985.The present article highlights the impact of covid19 shocks on fiscal rules and economic growth, with particular attention to post-pandemic (Covid19) recovery. The given analysis creates a precondition for the further development of this topic in the future, to expand the relevant econometric model for calibration of fiscal rules, assessment effectiveness of fiscal limits in the context of post-pandemic economic recovery.
    Keywords: Fiscal Rules, Covid19 Shocks, Economic Growth, Economic Recovery, Debt, Deficit.
    JEL: O40 E62 H61
    Date: 2022–10

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