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on Transition Economics |
| By: | Martin, Ertl (Institute for Advanced Studies Vienna, Austria); Rabitsch, Katrin (Vienna University of Economics and Business) |
| Abstract: | We explore the natural rate of interest, shortly r*, in emerging economies. If economic growth originates from convergence, then growth, say, from technological progress will be lower than we ï¬ nd in the data and, hence, r* will be lower. Ignoring convergence upwardly biases our estimates of r*. We extend the New Keynesian small open economy model to take account of convergence. The model is estimated with Bayesian techniques for four emerging economies in Central and Eastern Europe: Poland, Czech Republic, Hungary and Romania. The estimation process is informed by empirical evidence about a rapid catch-up of our example economies during the period from 2003 to 2019. We conï¬ rm the decline in r* over the last decades. When we account for capital deepening, we ï¬ nd meaningful differences with non-negligible implications for monetary policy. |
| Keywords: | natural rate of interest; convergence; New Keynesian DSGE model; Central and Eastern Europe |
| JEL: | E3 E4 E5 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:ihs:ihswps:number55&r= |
| By: | Andreas Bergh (Department of Economics, Lund University, Sweden; Research Institute of Industrial Economics, Stockholm, Sweden); Christian Bjornskov (Research Institute of Industrial Economics, Stockholm, Sweden; Department of Economics, Aarhus University, Denmark); Ludek Kouba (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Czech Republic) |
| Abstract: | The discussion of the growth consequences of socialism has fulminated for a century, sparked off by the Calculation Debate in the 1920s and 30s, and has concerned the performance of the Soviet Union in the 1950s and the mixed development in the 1990s after communism collapsed in Central and Eastern Europe. We aim to inform these debates by providing an empirical assessment of how socialist economies performed across the second half of the 20th century. Using both neighbour comparisons as well as more formal empirical analysis of developing countries that turned socialist after independence, we derive a set of estimates of the degree to which the introduction of a planned socialist economy affects long-run growth and development. All analyses point towards an annual growth decline of approximately two percentage points during the first decade after implementing socialism. |
| Keywords: | economic growth, socialism |
| JEL: | O11 O43 P20 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:95_2024&r= |
| By: | Ales Franc (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Sona Kukuckova (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Czech Republic); Marek Litzman (Department of Economics, Faculty of Business and Economics, Mendel University in Brno, Czech Republic) |
| Abstract: | Time spent commuting plays a significant role in decision-making within the labour market, particularly for job seekers. Investments in road infrastructure have a direct effect on commuting times and thus may also have an effect on the local labour markets. The aim of the article is to evaluate the effect of improvements in infrastructure on regional unemployment. In this paper, we use a unique database that includes data on the time taken to commute from all municipalities in the Czech Republic (n=6237) to their regional centres for every month between March 2014 and December 2022 (106 periods). Overall 1534 changes that met the criteria for a significant change in travelling time were identified. Our results suggest that a one-minute drop in commuting time from the respective municipality to the regional centre is linked to a 0.07 percentage point drop in the unemployment rate one year later, in comparison to the control group. The ratio rises over time, after five years, the same one-minute reduction in commuting time, is then related to a 0.19 percentage point drop in unemployment. Therefore, better infrastructure can help to reduce differences in regional rates of unemployment and can justify infrastructure investments. |
| Keywords: | commuting, unemployment, road infrastructure, OSRM, New Economic Geography, inter-regional disparities, regional development |
| JEL: | H54 R41 J61 |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:men:wpaper:94_2024&r= |
| By: | Biswajit Banerjee (Ashoka University); Peter Toth (University of Economics in Bratislava, Slovakia) |
| Abstract: | In recent years, a small number of studies have emphasized that subjective well-being of individuals depends not only on income but also consumption and wealth. However, only a few have examined the influence of all three variables simultaneously. Empirical studies have also analyzed the role of self-centered and community-centered inequalities but the inclusion of both measures in the same specification is scarce. In a departure from much of the existing literature, this paper analyzes concurrently the influence of all three economic well-being indicators and both types of inequalities on subjective well-being. We find that absolute levels of income, consumption and wealth all have a significant positive effect that remains robust even after the inclusion of self-centered and community-centered inequalities in the regression equations. The evidence indicates that both types of inequalities are important considerations for subjective well-being, but with different influences. Self-centered inequality measured using reference group average has a positive signalling effect, while inequality defined by the position of an individual within the distribution of the relevant economic well-being indicator has a negative comparison effect. Whereas community-centered inequality in income has a positive signalling effect, consumption and wealth inequalities have a negative comparison effect. |
| Keywords: | Community-centered inequality; Consumption; Income; Self-centered inequality; Subjective well-being; Wealth |
| Date: | 2023–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:106&r= |
| By: | ORFAO E VALE TABERNERO Guillermo; FERNANDEZ MACIAS Enrique (European Commission - JRC); MALO Miguel Angel |
| Abstract: | This working paper presents a comparative analysis of the role played by occupational changes in recent wage inequality trends in six European countries between 2002 and 2018. Using the European Union Structure of Earnings Survey, the analysis shows two patterns in the share of wage inequality explained by between-occupation differentials: while the relative importance of between-occupation trends has grown in Finland and the UK, it has diminished in Spain, France, Poland and Romania. Although between-occupation differentials account for a great share of total wages’ variance, changes in the occupational structure (in particular, the patterns of job polarisation and upgrading widely discussed in the literature) have not driven recent wage inequality trends in Europe. Wage inequality, instead, has been mostly driven by changes in wage differentials within occupations. Finally, we found that occupations effectively account for the distribution of wages, yet their explanatory significance markedly declines at the highest wage tiers. This work contributes to a better understanding of how within- and between-occupation differences have influenced wage inequality trends in Europe. Consequently, our results add significant value to the debate about recent stratification theory, which has challenged the idea that occupations structure economic disparities and wage inequality as importantly as they once did. |
| Keywords: | Europe, jobs, occupational structure, occupations, wage inequality |
| Date: | 2024–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:laedte:202401&r= |
| By: | Biswajit Banerjee (Ashoka University; National Bank of Slovakia); Jelena Ćirjaković (Bank of Slovenia) |
| Abstract: | Using annual firm-level data for Slovenia, this paper examines the impact of the Covid-19 pandemic on firm exit, sales, employment and take-up of different types of government financing support. The outcomes in the pandemic year are compared with those in the pre-Covid and post-Covid periods. The firm exit rate did not increase during the pandemic period. The process of cleansing out of less productive firms was still at work during the pandemic but did not intensify. Small and young firms were not impacted disproportionately more from the pandemic shock compared to the pre-Covid period. Government financing support had a strong positive effect on facilitating employment growth. Such support went to firms with greater need. There was little evidence of misallocation of resources towards zombie firms and low productivity firms. |
| Keywords: | COVID-19; Firm exit; FTE employment; government financing support; sales outcome |
| Date: | 2023–11–13 |
| URL: | http://d.repec.org/n?u=RePEc:ash:wpaper:108&r= |
| By: | Delia Sanchez Trancon; Guy Halpern |
| Abstract: | This paper is part of a subset of working papers within the Environment Working Paper series, presenting research on the enabling environment for investment in water security. The subset includes country and regional projects aimed at pilot testing the Scorecard, designed to assess the enabling environment for investment in water security. The paper “Assessing the Enabling Conditions for Investment in Water Security: Scorecard Pilot Test in Asian Countries” delineates the findings from the initial phase. This paper marks the commencement of the second round of pilot tests in the EU’s Eastern Partnership Countries. It presents the results obtained from assessing the enabling environment for investment in water security in Armenia, using the Scorecard. It also presents policy recommendations based on the priority investment barriers identified during stakeholder consultations in the country, involving representatives from various Ministries engaged in water security and international donors. The assessment and recommendations cover the public investment framework and its impact on water-related sectors, the water investment framework, project bankability and sustainability, as well as the contribution of other economic sectors to water security. |
| Keywords: | Armenia, data, enabling environment, investment, irrigation, policy, public and private finance, regulation, sanitation, tool, wastewater, water resource management, water security, water supply |
| JEL: | H23 H41 H51 H54 L32 L38 L50 L95 L98 Q25 Q53 Q54 Q58 |
| Date: | 2024–05–29 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:241-en&r= |
| By: | Beier Liu; Haiyun Zhu |
| Abstract: | In this study, we utilize the Kalman-Filter analysis to assess market efficiency in major stock markets. The Kalman-Filter operates in two stages, assuming that the data contains a consistent trendline representing the true market value prior to being affected by noise. Unlike traditional methods, it can forecast stock price movements effectively. Our findings reveal significant portfolio returns in emerging markets such as Korea, Vietnam, and Malaysia, as well as positive returns in developed markets like the UK, Europe, Japan, and Hong Kong. This suggests that the Kalman-Filter-based price reversal indicator yields promising results across various market types. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2404.16449&r= |