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on Transition Economics |
| By: | Ertl, Martin; Rabitsch, Katrin |
| 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 find 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 incorporate convergence effects and estimate it using Bayesian techniques for four emerging economies in Central and Eastern Europe: Poland, Czech Republic, Hungary and Romania. Empirical evidence of the rapid catching-up of our sample economies during the period from 2003 to 2019 assists in specifying the model estimation. Our findings confirm a decline in r* over the past decades. Accounting for capital deepening reveals meaningful differences in estimated r*, with non-negligible implications for monetary policy in emerging economies. |
| Keywords: | natural rate of interest; convergence; New Keynesian DSGE model; Central and Eastern Europe |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:wiw:wus005:72533822 |
| By: | Strelnyk, Olena Oleksandrivna; Yuzva, Liudmyla; Zlobina, Tamara |
| Abstract: | The research in this discussion paper explores the significant role of feminist perspectives and actions in fostering sustainable gender-transformative changes within Ukraine, particularly during the ongoing defence against Russian aggression. It highlights the ability of feminist movements to catalyse long-term shifts towards gender equality and social inclusion, with a focus on women's and LGBT+ rights. Despite the challenges of war, feminist activists continue to push for transformative policies that not only address immediate wartime needs, but also lay the foundation for gender-responsive defence, inclusive recovery and post-war reconstruction. This study examines the impact of feminist actions and perspectives on various sectors of Ukrainian society, the barriers they face and the opportunities that remain for strengthening feminist policies during and after the war. The research timeline spans 2014-2024, corresponding to the duration of Russia's war against Ukraine, with a particular emphasis on the period of the full-scale invasion from 2022 to 2024. |
| Keywords: | Gender, Ukraine, Feminism |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:313627 |
| By: | Irto, Giuseppe; Kharitonov, Ivan; Nishikawa, Taro; Trebesch, Christoph |
| Abstract: | We study how Europe could replace US support for Ukraine both (i) financially, in terms of the fiscal effort required, and (ii) militarily, in terms of weapon production. Financial effort: The financial challenge of replacing US aid is limited. Currently, European governments are spending just 0.1% of their annual GDP on bilateral aid for Ukraine - a minor effort To replace US aid flows and keep total support at the same level: Europe needs to double its yearly support to an average level of 0.21% of GDP. This is less than half of what Denmark and the Baltics are already doing and on a level of what Poland and the Netherlands do. In short: Europe as a whole would need to follow Scandinavia's or Poland's example. In absolute terms (billions of Euro), the biggest European countries and the EU Institutions will be decisive. To replace US aid and get to 0.21% of GDP, Europe as a whole needs to increase its yearly aid flow from currently €44 bn per year to €82 bn per year. The biggest donors for that effort will be the EU institutions (Commission and EIB), who will need to increase their annual support from currently €16 bn to €36 bn per year. Next comes Germany (from currently €6 billion to at least €9 billion per year), then Great Britain (from €5 to € 6.5 bn per year), then France (from currently just €1.5 bn to €6 bn per year), Italy (from currently just €0.8 bn to €4.5 bn) and Spain (from just €0.5 bn to €3 bn per year). All remaining European donors would need to move from €14 bn to €16.5 bn per year. To avoid freeriding, we recommend offering financial incentives to those countries giving aid to Ukraine. Big Ukrainian donors (in % of GDP) could get priority access to any new EU-level defense financing scheme. Large Ukraine aid could also be exempt from EU fiscal rules, or deducted from each nations' contributions to the EU budget. (...) |
| Keywords: | Military aid, Foreign aid, War, Ukraine, Europe, Russia, Arms Trade, United States, US, Geoeconomics, Militärhilfe, Auslandshilfe, Krieg, Ukraine, Europa, Russland, Waffenhandel, Vereinigte Staaten, USA, Geo-Ökonomie |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkpb:313634 |
| By: | Martin Cesnak (National Bank of Slovakia); Andrej Cupak (National Bank of Slovakia); Pirmin Fessler (Oesterreichische Nationalbank); Jan Klacso (National Bank of Slovakia) |
| Abstract: | This paper examines the impact of borrower-based macroprudential policy tightening on mortgage lending in Slovakia, focusing in particular on the role of financial advisors in shaping loan characteristics. Using a comprehensive loan-level dataset from Slovak banks, weanalyzetheeffectsofkeyregulatorytools—Loan-to-Value(LTV), Debt-to-Income(DTI), and Debt Service-to-Income (DSTI) limits — on mortgage risk profiles. Our contributions include: (1) showing that restrictive borrower-based measures (BBMs) reduce the riskiest loans but push lower-risk segments toward regulatory thresholds, thus increasing portfolio risk; (2) demonstrating that advisor-mediated loans tend to have higher amounts, LTVs, DTIs, and longer maturities, raising their riskiness; and (3) finding that strict enough DSTI limits not only reduce DSTI but may also indirectly effect other loan characteristics, such as DTI, LTV ratios, and loan volumes, suggesting broader policy impacts. Additionally, we identifysignificantfront-loadingbehaviorfollowingpolicytighteningannouncements, par-ticularly for advisor-mediated loans. These findings highlight the importance of detailed micro-level data in capturing policy effects and informing more effective macroprudential regulation. |
| JEL: | G21 D18 D12 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:svk:wpaper:1118 |
| By: | Matteo Ferrazzi; Francesca Guadagno (The Vienna Institute for International Economic Studies, wiiw); Doris Hanzl-Weiss (The Vienna Institute for International Economic Studies, wiiw); Jochen Schanz; Tomáš Slačík; Robert Stehrer (The Vienna Institute for International Economic Studies, wiiw) |
| Abstract: | The Draghi Report recommended actions to secure the long-term EU competitive position but did not discuss the challenges related to specific countries or regional groups, including those of Central and Eastern European (CEE) countries. While CEE economies remain focused on manufacturing, especially the automotive industry, they are gradually shifting from being the EU's manufacturing hub to developing higher value-added activities. However, income convergence has slowed, suggesting the need to rethink their growth model. Our research highlights growth opportunities and suggests ways to reduce barriers to innovation. Policy should focus on three areas strengthening human capital, fostering innovation, and addressing energy intensity and its relatively high costs. Key actions include increasing labour market participation, ensuring access to start-up finance and risk capital, and reducing the region’s reliance on brown energy, particularly through grid and generation investment and the development of greener businesses. |
| Keywords: | Competitiveness, trade, innovation, Central Eastern Europe |
| JEL: | F14 F15 O11 O47 O52 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:93 |
| By: | Fazekas, Mihaly; Poltoratskaya, Viktoriia; Marc Tobias Schiffbauer; Tóth, Bence |
| Abstract: | This paper assesses the impact of favoritism in public procurement on private sector productivity growth. To this end, it combines three novel microeconomic data sets: administrative data on firms, including more than 4 million firm-year observations and rich financial and ownership information; public procurement transaction data for 150, 000 published contracts and their tenders; and a newly assembled data set on firms’ political connections, drawing on asset declarations, sanction lists, and offshore leaks. This comprehensive data set allows tracing the impact of favoritism in allocating government contracts to economic growth. The findings show that politically connected firms are 18 to 32 percent more likely to win public procurement contracts due to their preferential access to uncompetitive tenders. Public procurement results in higher subsequent productivity and employment growth only if it has been awarded through competitive tenders. Firms winning contracts through uncompetitive procedures have flat growth but higher profit margins. Consistent with these findings, the paper shows that firms that are awarded uncompetitive public procurement contracts obtain rents of 9 to 11 percent from overpaid contracts. The results suggest that aggregate annual total factor productivity growth would have been 8 percent higher in the absence of favoritism in public procurement. |
| Date: | 2025–03–13 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:11085 |
| By: | Dragan Dživdžanovic (National Bank of Serbia) |
| Abstract: | This paper examines a phenomenon known as cheapflation on the example of Serbia in the 2022-2024 period. Cheapflation is the tendency of prices of cheaper brands to rise at a higher rate than those of more expensive brands of the same products during the periods of increased inflationary pressures. For research purposes, we used monthly microdata on the prices of various brands of a wide range of food and beverage products. Based on this data, brands within products were classified into quartile groups, from the cheapest to the most expensive ones. Synthetic consumer price indices were then created, consisting only of the cheapest and most expensive brands. The results show that Serbia experienced cheapflation, as the prices of the cheapest brands rose 4.5 pp faster than the the prices of the most expensive brands, on average, over the three-year period. The paper also confirmed an accompanying tendency: in the beginning, significant inflationary pressures are dominantly driven by the price increases of the cheapest brands, while the gap between the prices of cheaper and more expensive brands widens the most during the period of the strongest inflationary pressures. Examining this phenomenon is important because of the redistributive effects of inflation, as well as because of the impact that public perception of price increases can have on monetary policy through the expectations channel. |
| Keywords: | cheapflation, inflation, demand elasticity, quartile, brands, cumulative growth |
| JEL: | F21 G15 G24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:28 |
| By: | Emilija Jankovic, Stojan Jankovic and Andrea Jovic; Emilija Jankovic (National Bank of Serbia); Stojan Jankovic (National Bank of Serbia); Andrea Jovic (National Bank of Serbia) |
| Abstract: | Following S&P’s decision in October 2024 to raise Serbia’s credit rating to investment grade (BBB–) for the first time in its history, the question arises regarding the manner in which changes in the credit rating level and outlook may impact key macroeconomic indicators. For this purpose, we conducted research analysing the short- and long-run impact of change in the rating awarded by the three leading international agencies (S&P, Fitch and Moody’s) on FDI inflow and economic activity in Serbia (approximated by the industrial production index). For the econometric analysis, we used linear and non-linear autoregressive distributed lag models ((N)ARDL) confirming the initial thesis that an improvement in the credit rating can have a significant impact on higher FDI inflow and industrial production growth in Serbia in both short and long run. This supports a more favourable investment and business environment, and a better living standard for citizens, contributing to sustainable economic growth over the long term. |
| Keywords: | credit rating, investment grade, FDI, industrial production, ARDL |
| JEL: | F21 G15 G24 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:30 |
| By: | Branimir Jovanović (The Vienna Institute for International Economic Studies, wiiw); Sonja Stojadinović |
| Abstract: | This note examines the grants and loans provided by the European Union (EU) and China to the Western Balkan economies. The EU remains dominant in grant funding, with annual Instrument for Pre-accession Assistance (IPA) grants averaging 0.8% of the region’s GDP, far above the 0.02% of GDP from Chinese grants. In terms of loans, however, China has nearly caught up with the EU. On an annual basis, the EU has committed loans equal to approximately 1.5% of the region’s GDP, while China has provided loans in the amount of 1.2%. Notably, in Serbia, China’s loan portfolio now exceeds the size of the EU’s. EU loans are cheaper and more transparent but come with stricter conditions for implementation and requirements for institutional reforms. In contrast, Chinese loans are more flexible and quicker to implement, making them appealing to Western Balkan politicians. However, this flexibility comes at a cost, as Chinese loans are significantly more susceptible to corruption, often deliver questionable quality, and have been linked to various drawbacks, such as workers’ rights violations and environmental degradation. |
| Keywords: | EU, China, Western Balkans, grants, loans, investment |
| JEL: | F21 F35 H81 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:wii:pnotes:pn:92 |
| By: | Ana Vujovic (National Bank of Serbia) |
| Abstract: | The paper presents the Naive Bayes classifier (NBC), one of the standard models used for solving classification problems, in the context of textual analysis. The model is examined first from a theoretical perspective and then from a practical one. An empirical study was conducted with the aim of carrying out a thematic classification of news articles using the NBC. The results of our research confirm that the NBC has a high predictive power despite the simplified assumptions on which it is based. These findings suggest a potential for further application of the NBC in the thematic classification of texts, which may have significant implications for economic research. |
| Keywords: | Naive Bayes classifier, thematic classification, natural language processing |
| JEL: | C13 E37 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:27 |
| By: | Filip Krvavac (National Bank of Serbia) |
| Abstract: | The paper presents the Naive Bayes classifier (NBC), one of the standard models used for solving classification problems, in the context of textual analysis. The model is examined first from a theoretical perspective and then from a practical one. An empirical study was conducted with the aim of carrying out a thematic classification of news articles using the NBC. The results of our research confirm that the NBC has a high predictive power despite the simplified assumptions on which it is based. These findings suggest a potential for further application of the NBC in the thematic classification of texts, which may have significant implications for economic research. |
| Keywords: | public debt, sustainability, fiscal policy, European Commission, DSA |
| JEL: | E60 E62 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:nsb:bilten:26 |
| By: | Abu Sayed Toyon, Mohammad |
| Abstract: | Juggling work, personal responsibilities, and academic obligations can be challenging for many students, who work while studying, potentially leading to difficulties in adapting to the academic demands and compromising academic success. This study aims to evaluate the relationship between life domain (e.g., work, personal, and university) obstacles and academic adaptation among working university students in Estonia. Using the data from the Eurostudent-VII survey, the study estimated quantitative measures of association. The findings suggest that work-related issues negatively affect academic adaptation, while concerns related to childcare and the financial situation did not have any statistically significant impact. In contrast, issues with unsuitable and demanding academic programmes were found to significantly affect academic adaptation for working students. This study sheds light on the challenges faced by working students and the manner in which these obstacles can affect academic experiences, underscoring the need for support for employed university students in Estonia. Such knowledge can be put to further research use, and it can also inform initiatives aimed at assisting students, who are simultaneously working and pursuing higher education. |
| Date: | 2023–04–29 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:af8rw_v1 |
| By: | Götze, Jacqueline; Klingebiel, Stephan; Khalid, Maryam |
| Abstract: | The significance of gender equality needs to be spotlighted since women and LGBTQIA* communities are prone to become victims of violence and have limited participation in political and decision-making processes. The approaches of feminist development policies and feminist foreign policies have been criticised for their potential inapplicability to diverse contexts and for perpetuating paternalistic or neo-colonial behaviours. The global rise of right-wing policies has influenced politics, prompting researchers on feminist policies to critically examine their limitations and the ways they have been institutionalised. The present study builds on the expertise, knowledge and experiences of partners from Ghana, India and Ukraine. It introduces local feminist perspectives as levers for transformative change for greater gender equality that can produce context-specific alternative approaches to development processes by addressing prevailing norms and practices, and thereby enhance access to resources and improve the political participation of women, girls and members of the LGBTQIA* communities. This synthesis study identifies common themes, challenges and opportunities across the three case studies prepared by the partner organisations through a combination of deductive and inductive processes. We have developed a matrix of 13 criteria, which can be categorised into five thematic clusters that include: intersectionality, special characteristics of local feminisms and gender (in)equalities, multi-directional flow of norms, challenges and opportunities for gender-transformative change, and future of gender-transformative policies. Key findings reveal persistent barriers faced by local feminist perspectives in influencing policy, decision-making and gender norms due to limited possibilities and restricted opportunities. |
| Keywords: | Gender, multilateral development policy |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:diedps:313629 |