|
on European Economics |
|
Issue of 2007‒08‒27
twenty-six papers chosen by Giuseppe Marotta University of Modena and Reggio Emilia |
| By: | William R. Eadington (Department of Economics, University of Nevada, Reno) |
| Abstract: | This study examines the conflicts within the European Union regarding protected status accorded to legal commercial gaming industries and the principles of harmonization that direct EU economic policy. Member States are permitted to constrain competition for gambling services as long as the primary purpose is to protect citizens from unintended negative consequences associated with the activities. Also, because of monopoly status, high tax rates, or government ownership, many EU gaming industries have become major contributors to government coffers or for funding for “good causes.” Legal challenges by private companies trying to participate in these protected markets have led to decisions by the European Court of Justice that have questioned such protected status. A number of key economic metrics for European gaming industries are presented, and competitive dimensions of EU casino industries are examined in comparisons to trends elsewhere. |
| Keywords: | regulation, gambling, European Union, harmonization |
| JEL: | K23 L43 L83 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:unr:wpaper:07-005&r=eec |
| By: | Michiel van Leuvensteijn; Jacob Bikker; Adrian van Rixtel; Christoffer Kok-Sorensen |
| Abstract: | This paper is the first that applies a new measure of competition, the Boone indicator, to the banking industry. This approach is able to measure competition of bank market segments, such as the loan market, whereas many well-known measures of competition can consider the entire banking market only. Like most other model-based measures, this approach ignores differences in bank product quality and design, as well as the attractiveness of innovations. We measure competition on the lending markets in the five major EU countries as well as, for comparison, the UK, the US and Japan. Our findings indicate that over the period 1994-2004 the US had the most competitive loan market, whereas overall loan markets in Germany and Spain were among the best competitive in the EU. The Netherlands occupied a more intermediate position, whereas in Italy competition declined significantly over time. The French, Japanese and UK loan markets were generally less competitive. Turning to competition among specific types of banks, commercial banks tend to be more competitive, particularly in Germany and the US, than savings and cooperative banks. |
| Keywords: | Banking industry; competition; loan markets; marginal costs; market shares. |
| JEL: | C33 G3 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:143&r=eec |
| By: | Roland Straub (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.); Ivan Tchakarov (International Monetary Fund (IMF) Asia and Pacific Department, 700 19th Street NW, Washington, DC 20431, USA.) |
| Abstract: | Despite intense calls for safeguarding public investment in Europe, public investment expenditure, when measured in relation to GDP, has steadily fallen in the last three decades, evoking fears that economic activity may be correspondingly negatively affected. At the same time, however, public consumption in the EU-12 countries has trended up. In this paper, we provide a macroeconomic assessment of the observed change in the composition of public spending in the euro area in a medium-scale two-country dynamic stochastic general equilibrium (DSGE) model. First, we analyze the channels through which, both temporary and permanent public investment shocks generate larger fiscal multipliers than exogenous increases in public consumption. Furthermore, we quantify the negative impact of a change in fiscal stance, characterized by a permanent rise in public consumption and a permanent fall in public investment, keeping thereby the overall level of public spending constant. The key message of the paper is that calls for reversing the observed trend in the composition of public spending are well justified. JEL Classification: F41, F42. |
| Keywords: | Public investment, Public consumption, Euro area, DSGE models. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070795&r=eec |
| By: | Allard Bruinshoofd; Leo de Haan |
| Abstract: | This paper conducts a transatlantic comparison of market timing effects on corporate capital structures, using some 45,000 observations on US, UK, and continental European firms. We confirm the empirical regularity that leverage and historical market-to-book ratios connect negatively in the US, but also document that this result does not extend to continental European and UK firms in general. The latter result is in line with the scarce empirical evidence for a few smaller European countries, and corroborates the enhanced' pecking order hypothesis of Högfeld and Oborenko (2005). The few market timing effects on European firms' capital structures that we find are specific to ICT firms and the ICT boom episode. |
| Keywords: | Market Timing; Capital Structure; ICT. |
| JEL: | C33 G3 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:dnb:dnbwpp:144&r=eec |
| By: | Luca Benati (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.); Giovanni Vitale (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.) |
| Abstract: | We jointly estimate the natural rate of interest, the natural rate of unemployment, expected inflation, and potential output for the Euro area, the United States, Sweden, Australia, and the United Kingdom. Particular attention is paid to time-variation in (i) the data-generation process for inflation, which we capture via a time-varying parameters specification for the Phillips curve portion of the model; and (ii) the volatilities of disturbances to inflation and cyclical (log) output, which we capture via break tests. Time-variation in the natural rate of interest is estimated to have been comparatively large for the United States, and especially for the Euro area, and smaller for Australia and the United Kingdom. Overall, natural rate estimates are characterised by a significant extent of uncertainty. JEL Classification: E31, E32, E52. |
| Keywords: | monetary policy, natural rate of interest, time-varying parameters; Monte Carlo integration, median-unbiased estimation, endogenous break tests, bootstrapping. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070797&r=eec |
| By: | Elke Hahn (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.) |
| Abstract: | This paper investigates the impact of exchange rate shocks on sectoral activity and prices in the euro area. Using a VAR framework it provides evidence on the magnitude and speed of the impact of exchange rate shocks on activity in all main euro area sectors and on activity and producer prices in a large set of sub-sectors of industry (excluding construction). Substantial heterogeneity in the impact of exchange rate shocks across sectors is identified as regards both activity and prices. According to our results, among the main euro area sectors an exchange rate shock has the strongest impact on value added in industry (excl. construction) and trade and transportation services. Within industry (excl. construction), among its main sub-sectors all of the impact on production comes via manufacturing, while among the main industrial groupings (MIGs), capital and intermediate goods production respond most strongly. As regards the impact on prices, among the sub-sectors of industry (excl. construction), the impact is largest on producer prices in electricity, gas and water supply, and in line with this producer prices in MIG energy are most sensitive to an exchange rate shock. JEL Classification: C32, E31. |
| Keywords: | Exchange Rate Pass-Through, Sectoral Activity and Prices, Euro area. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070796&r=eec |
| By: | Matthieu Darracq Pariès (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.); Stéphane Adjemian (CEPREMAP & GAINS, Université du Maine, Avenue Olivier Messiaen, 72085 Le Mans Cedex 9, France.); Stéphane Moyen (Centre d‘Études des Politiques Économiques (EPEE), Université d‘Évry Val d‘Essonne, 4, bld Francois Mitterand, 91025 Évry Cedex, France.) |
| Abstract: | The objective of this paper is to examine the main features of optimal monetary policy within a micro-founded macroeconometric framework. First, using Bayesian techniques, we estimate a medium scale closed economy DSGE for the euro area. Then, we study the properties of the Ramsey allocation through impulse response, variance decomposition and counterfactual analysis. In particular, we show that, controlling for the zero lower bound constraint, does not seem to limit the stabilization properties of optimal monetary policy. We also present simple monetary policy rules which can "approximate" and implement the Ramsey allocation reasonably well. Such optimal simple operational rules seem to react specifically to nominal wage inflation. Overall, the Ramsey policy together with its simple rule approximations seem to deliver consistent policy messages and may constitute some useful normative benchmarks within medium to large scale estimated DSGE framework. However, this normative analysis based on estimated models reinforces the need to improve the economic micro-foundation and the econometric identification of the structural disturbances. JEL Classification: E4, E5. |
| Keywords: | DSGE models, Monetary policy, Bayesian estimation, Welfare calculations. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070803&r=eec |
| By: | Rahel Falk; Werner Hölzl (WIFO); Hannes Leo (WIFO) |
| Abstract: | EU enlargement has increased the diversity of the European Union in a substantial way, in particular with respect to its capacities in the fields of science, technology and innovation (STI). The shares of both gross and business sector expenditures on R&D in GDP are increasingly diverging following EU enlargement pointing at quite different levels of technological opportunities and absorptive capacity. Against this background, this paper tries to disentangle the rationales for STI policies at an EU level. Starting from the different policy rationales we assign different STI policy fields to levels of governance. Our discussion suggests that the European Union plays two quite distinct roles in EU STI policy. The first role is closely related to the assignment of policy competences and establishes the fields where the EU should act as policy maker and program owner. But this alone is likely not enough when it comes to the managing and coordination of complex horizontal policy fields such as STI policy. Here the second role of the European Commission comes into place. This second role is not related to policy making but to the "right" to fuel discussions to find coordinated solutions. This role is essentially political and relates to the job to stimulate activities in areas where the Commission has no mandate (due to missing clear rationales) to act alone. |
| Keywords: | EU enlargement, science, technology and innovation (STI), policy rationales, subsidiarity, policy competences, coordination, horizontal policy fields |
| Date: | 2007–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2007:i:299&r=eec |
| By: | Rita Asplund; Oussama Ben-Abdelkarim; Ali Skalli |
| Abstract: | The failure to achieve equitable access to university studies has turned the focus to the funding of European higher education systems. Since the large amounts of public subsidies injected in tertiary-level education have not succeeded in reducing disparities in access for children from different social backgrounds, this is seen as compelling evidence for there being a need to revise higher education financing not only on efficiency but also on equity grounds. Such policies are already pursued, planned or intensively discussed in most of Europe. More equitable access to and participation in university education through changes in the funding sources and mechanisms is a challenging policy with long-term implications. Hence, it should preferably be based on reliable empirical evidence. This raises the question of what the theoretical and empirical literature actually tells us about these matters. How severe is the under-representation of students from a socially disadvantaged background? Has this inequality changed over time across and within European countries? What role does funding play? Have the changes in funding systems already undertaken in several European countries improved the participation of students from low-income families? This review paper aims to answer these important questions by drawing together the available evidence, by contrasting it against pursued educational policies and by pointing to still existing knowledge gaps. |
| Keywords: | access, equity, financing, tertiary education |
| JEL: | I22 |
| Date: | 2007–08–17 |
| URL: | http://d.repec.org/n?u=RePEc:rif:dpaper:1098&r=eec |
| By: | Gudrun Biffl |
| Abstract: | The increasing employment of women in Europe is not only a result of economic restructuring, but also a consequence of changing family structures, changing expectations, changing wage determination mechanisms and increasing urbanisation. Many of the services which have been outsourced from the household sector to the market sector tend to remain almost exclusively a female employment domain. Thus, the areas of production that constitute the domain of female work in traditional societies remain the same in the developed industrial societies; only the degree of marketisation differs. The extent to which domestic work is outsourced depends upon the welfare model. Thus, it is a different set of taxes, transfer payments and public services in the various models which impacts on the relative efficiency and direct and indirect costs of goods and services which can be produced in the household or the market sector. Different institutional settings impact on the opportunity cost of domestic work and/or the shadow price of the domestic good or service, resulting in a divergence of the employment rate of women between the various models in the EU. |
| Keywords: | Employment rates, models of social organisation, marketisation of household production, time use surveys, gender segregation |
| Date: | 2007–07–06 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2007:i:297&r=eec |
| By: | BOUAMRA-MECHEMACHE, Zohra; RÉQUILLART, Vincent; SOREGAROLI, Claudio; TREVISIOL, Audrey |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7135&r=eec |
| By: | Marius BRÜLHART; Nicole A. MATHYS |
| Abstract: | We estimate agglomeration economies, defined as the effect of density on labour productivity in European regions. The analysis of Ciccone (2002) is extended in two main ways. First, we use dynamic panel estimation techniques (system GMM), thus offering an alternative methodological treatment of the inherent endogeneity problem. Second, the sector dimension in the data allows for disaggregated estimation. Our results confirm the presence of significant agglomeration effects at the aggregate level, with an estimated long-run elasticity of 13 percent. Repeated crosssection regressions suggest that the strength of agglomeration effects has increased over time. At the sector level, the dominant pattern is of cross-sector "urbanisation" economies and own-sector congestion diseconomies. A notable exception is financial services, for which we find strong positive productivity effects from own-sector density. |
| Keywords: | employment density; productivity; european regions; dynamic panel GMM |
| JEL: | R10 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:lau:crdeep:07.04&r=eec |
| By: | Annamaria Conti (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne); Patrick Gaulé (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne); Dominique Foray (Chaire en Economie et Management de l'Innovation, Collège du Management de la Technologie, Ecole Polytechnique Fédérale de Lausanne) |
| Abstract: | This paper is an empirical analysis of the impact that different organisational forms of the Technology Transfer Offices (TTOs) in Europe have on their licensing activity. Given the great diversity of organization forms prevailing across European TTOs, our paper attempts to shed more light on which of those forms might be more efficient. We use as a measure of efficiency and as dependent variable of our model the number of license agreements concluded. Controlling for staff, invention disclosures, quality of the academic institution, life science orientation and demand for technology, we find evidence for the importance of personnel with a PhD in science in the TTO to facilitate communication between academics and the TTO. We find that the age of the TTO has a significant but negative effect. We do not find a positive effect for private organization of the TTO. Our data is derived from the 2004-2005 survey on TTO activities by the Association of European Science and Technology Professionals (ASTP) and information collected from TTO web sites. |
| Keywords: | technology transfer offices, technology licensing, university licensing |
| JEL: | L3 O31 O32 O38 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cmi:wpaper:cemi-workingpaper-2007-001&r=eec |
| By: | Egon Smeral (WIFO); Michael Wüger (WIFO) |
| Abstract: | This study uses time-series techniques and econometric approaches in order to quantify the effects that organising an EU presidency has on the tourism exports of a country. The approach to explain tourism revenues by a time-series intervention model filters out special effects (data discontinuations, exchange rates, events, media reports, etc.) by outlier detection methods, maps influences from trends, the business cycle and seasonal effects in an ARIMA model and depicts the effect of an EU presidency by way of an intervention variable. Using econometric indicator approaches, a country's tourism exports are controlled for seasonal and special influences, habitual effects and demand trends by way of suitable indicators, and a dummy variable is used to test whether the EU presidency made a statistically significant contribution to the revenues from tourism. |
| Keywords: | EU presidency, econometric indicator approach, intervention models, outlier detection |
| Date: | 2006–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2006:i:282&r=eec |
| By: | Nuno Cassola (European Central Bank, Kaiserstraße 29, 60311 Frankfurt, Germany.); Christian Ewerhart (Institute for Empirical Research in Economics (IEW), University of Zurich, Winterthurerstrasse 30, CH-8006, Zurich, Switzerland.); Claudio Morana (Dipartimento di Scienze Economiche e Metodi Quantitativi, Via Perrone 18, 28100, Novara, Italy.) |
| Abstract: | This paper contributes to the existing literature on central bank repo auctions. It is based on a structural econometric approach, whereby the primitives of bidding behavior (individual bid schedules and bid-shading components) are directly estimated. With the estimated parameters we calibrate a theoretical model in order to illustrate some comparative static results. Overall the results suggest that strategic and optimal behavior is prevalent in ECB tenders. We find evidence of a statistically significant bid-shading component, even though the number of bidders is very large. Bid-shading increases with liquidity uncertainty and decreases with the number of participants. JEL Classification: G21, G12, D44, E43, E50. |
| Keywords: | Repo auctions, monetary policy implementation, primary money market market, multi unit auctions, discriminatory auctions, collateral, central bank, nonparametric estimation. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20070793&r=eec |
| By: | Fritz Breuss (WIFO) |
| Abstract: | Germany and Austria, neighbours of different size and with the same language, still have close economic bonds, but the combined effect of Austria joining the EU, the eastern opening and the EU's enlargement has made Austria grow increasingly separate from Germany. Since the early 1990s, Austria's economic growth rate has been surpassing the German equivalent by ½ percentage point per year. The reasons for this are manifold, but appear to be chiefly in the burden attending German reunification. Also, the German business sector seems to have been less able than its Austrian counterpart to tap the new opportunities springing from Europe's progressing integration (internal market and currency union) and the EU's enlargement. Already the eastern opening opened up a new "window of opportunity" for Austria which the economy made full use of. In part, the asymmetric architecture of EMU's macropolicy (excessive real interest rates, fiscal rules of the stability and growth pact) appears to pose greater problems for Germany than for Austria. Lastly, the negative structural effects of globalisation (outsourcing, etc.) may have been a reason for Germany's weak growth. However, since the globalisation effect also applies to Austria, the growth gap between the two countries cannot be explained by this hypothesis. |
| Keywords: | Deutschland, Österreich, Wirtschaftsvergleich, Globalisierung |
| Date: | 2006–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2006:i:280&r=eec |
| By: | Peter Huber (WIFO) |
| Abstract: | This paper analyses the effects of previous enlargements of the European Union on the regional structure of production. Focusing on regional development five years before and seven years after integration, we find relatively small and heterogeneous effects. For enlargement by Greece a robust tendency of decentralisation is found. For Southern Enlargement effects on border regions are significant for wages and employment and for Northern Enlargement no significant effects are found. Finally, for nearby old member states results are contradictory and are not robust to correcting from potential bias arising from serial autocorrelation of the error term. |
| Keywords: | EU-Accession, Regional Effects of Integration |
| Date: | 2007–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2007:i:283&r=eec |
| By: | Christian Fahrholz (School of Business and Economics, Friedrich-Schiller University Jena, Germany.) |
| Abstract: | Following entrance into the European Union, Central Eastern European Countries (CEECs) are expected to join the European Monetary Union (EMU). These countries may incur considerable costs over the course of their passing through the required Exchange Rate Mechanism II (ERM-II). However, with enough bargaining leverage CEECs may be able to pass some of these costs on to current EMU-members. In turn, a CEEC's leverage depends on their ability to wield successful brinkmanship via an exchange-rate policy characterized by a 'threaten-thy-neighbor' strategy. A two-stage Nash-threat game captures the essentials of the CEECs' phase of ERM-II pass through. |
| Keywords: | Threat game, Nash-bargaining solution, exchange-rate policy, EU-enlargement, EMU |
| JEL: | C72 C78 F33 F51 |
| Date: | 2007–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2007-050&r=eec |
| By: | Fritz Breuss (WIFO) |
| Abstract: | Advanced industrial countries have been exhibiting a steady decline of the labor income shares in the last two decades. We explain this phenomenon by resorting to the old Stolper-Samuelson theorem. The conclusions concerning the impact of free trade on the income distribution are unambiguous in a Heckscher-Ohlin world with two countries, two goods and two factors of production (capital and labor). In contrast, the consequences of FDI from the capital abundant country (EU) to the labor abundant CEECs are ambiguous. Both scenarios are investigated theoretically and then simulated with a hypothetical two country CGE model, including the EU and the CEECs. A panel regression for both regions separately, helps to decide empirically which influences on the development of the labor income shares are at work. Globalization, measured by revealed comparative advantage (increase in global net trade) has contributed to a decline in the labor income shares in the EU. Additionally, those countries which are engaged more in trade with the CEECs can expect a sharper decline in the wage share. Global net FDI outflow also exerts a negative influence on the labor income share in the EU. In the CEECs the increase in global net trade had a positive influence on the labor income share, trade with the EU, however, dampened the labor income share. FDI inflow increased the labor income share in the CEECs. |
| Keywords: | Globalisation, EU Enlargement, Income distribution |
| Date: | 2007–06–28 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2007:i:296&r=eec |
| By: | Carmen Lopez Martin; Pedro Pablo Perez Hernandez; Araceli Rios Berjillos |
| Abstract: | Spanish state descentralization is very similar to the most important federal countries. In spite of the advances in the regional financing system it hasn’t been able to give the needed autonomy and financial sufficiency to fund the transferred competencies in the Spanish Autonomies. From 1987 to nowdays four different models of financiation have been implemented. The last one, approved in 2001 and though it seemed to be succesfull, it is going to be remodelled shortly . There are objective reasons to justify the system modification: evolution of the public expenses, inmigration, in general terms, society evolution. However, it is a political reason what has brought this topic on. Last proposal comes from the Catalonian Government. Some parts of the proposal take as model the German länder financial system, specially the basket tax and the interregional solidarity system. The aim of this research is to compare socioeconomic features in regions belonging to Germany and Spain as well as their financial system in order to know what can be useful to Autonomic Spanish financial system taken from the German one. The methodology used is the following one: a) First of all, we have studied the main socioeconomic features of Spanish regions and of German länders. In this part of the work, we have been able to get similarities between regions in both countries. Similarities that can justify directly or indirectly some aspects of the financing. b) Secondly, it has been made a description of the financial system applied in German länders and in the Spanish Autonomies. It has been specially compared the extent of autonomy and solidarity in each system. c) Thirdly, it has been studied the reform proposed by the Catalonian Government identifying its relation to the German regional financial system. d) And finally, it has been made a valoration about the Catalonian Government proposals and some other conclusions have been drawn over the possibility to implement German system to Spanish regions. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p478&r=eec |
| By: | Fulvio Castellacci (Norwegian Institute of International Affairs (NUPI), Oslo.) |
| Abstract: | This paper seeks to shed new light on sectoral patterns of innovation in Norway in a European perspective. It puts forward a theoretical framework based on a new sectoral taxonomy that combines manufacturing and services within the same framework. It then analyses innovative activities in Norway and compare them to other European countries by making use of data from the Fourth Community Innovation Survey (CIS4). Finally, it studies the recent evolution and current characteristics of the industrial structure in Norway and points out its peculiarities vis-a-vis other European economies. The results of this work point to a contrasting pattern. On the one hand, Norwegian sectoral systems appear to be very innovative, often above the European average and, for some of the CIS4 indicators and some of the sectoral groups, they indeed emerge as the most innovative in Europe. This pattern is in fact more evident for those technologically advanced groups that the new sectoral taxonomy points out as the most progressive industries of the ICT-based age. On the other hand, these sectoral groups are relatively small in Norway, accounting for a much lower share of production than their European counterparts. In a nutshell, by focusing on the sectoral characteristics of the Norwegian economy and by analysing them in a European perspective, the paper sheds new light on the so-called Norwegian paradox, according to which Norway is characterized by a peculiar combination of low innovation and high economic performance. The commonly made statement that innovation is low in Norway does in fact hide the contrasting pattern outlined above. The problem is not with innovative activities, as frequently asserted, but it has rather to do with the sectoral composition of the economy. |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:tik:inowpp:20070609&r=eec |
| By: | Aico van Vuuren; Michiel van Leuvensteijn |
| Abstract: | We analyze the impact of homeownership on unemployment duration using a theoretical model of job search. Earlier studies suggest that this relationship should be positive because workers are less mobile when they own a home. Nevertheless, most of the empirical studies in Europe find an opposite relationship. In this paper, we investigate whether this is due to an omission in the original analysis or whether it is due to an endogeneity problem, i.e. those who can leave unemployment easily are more likely to be a homeowner. In our empirical analysis, we use additional information about the differences in unemployment benefits between homeowners and renters. We find that homeowners have higher hazard rates out of unemployment to a job in the local labour market. The impact is significant but not very large. Homeownership has a negative but insignificant impact on the hazard to leave unemployment to the non-local labour market. Finally, we find that homeowners would reduce their probability to receive a job offer from the local labour market when they become renters. The probability to receive a job offer from the non-local labour market would increase for short spells of unemployment when home owners become renters. However, this probability would be reduced for long spells of unemployment. |
| Keywords: | housing market; transaction costs; labor mobility; unemployment |
| JEL: | J60 J61 R23 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:86&r=eec |
| By: | Engelbert Stockhammer (Department of Economics, Vienna University of Economics & B.A.); Stefan Ederer (Department of Economics, Vienna University of Economics & B.A.) |
| Abstract: | This paper aims at empirically estimating the demand effects of changes in functional income distribution for Austria. Based on a Post-Kaleckian macro model, this paper estimates the effects of a change in the wage share on the main demand aggregates. The results for the behavioral functions for consumption, investment, prices, exports and imports are compared with the specifications of the WIFO macro model and the IHS macro model. A reduction in the wage share has a restrictive effect on domestic demand as consumption decreases more strongly than investment increases. Because of the strong effects on net exports the overall effects of a decrease in the wage share are expansionary. However the latter effect operates only as far as the fall in the wage share increases competitiveness. As wage shares were also falling in Austria’s main trading partners, the effect seems to have been neutralized. |
| JEL: | E12 E20 E22 E25 E61 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwwuw:wuwp106&r=eec |
| By: | Jiménez-Rodríguez, Rebeca; Russo, Giuseppe |
| Abstract: | A well-established result in the literature on labour market flexibility is that employment is more volatile in "flexible" labour markets. Over the last 35 years, Italy gives a good example of a transition from an over-regulated labour market into a quite more flexible one. According to the theory, the deregulation should alter the employment volatility. Anecdotal evidence reported in the press shows growing concerns for increased uncertainty, low wages and short-tenured jobs. To check whether institutional reforms have changed the labour market volatility, we test for the existence of changes in the volatility of different employment indicators. We find that while employment has indeed become less volatile, standard units of labour have become more volatile at the same time. We argue that this can be explained by working time adjustment and increased job-to-job mobility, rather than by mobility from employment to unemployment. This seems to confirm the concerns for increased job insecurity and also indicates that the deregulation may have been successful in reducing unemployment. |
| Keywords: | Labour market regulation; institutions; volatility; breaks. |
| JEL: | J23 C22 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:4519&r=eec |
| By: | BEC, Frédérique; GOLLIER, Christian |
| JEL: | G11 |
| Date: | 2007–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:7289&r=eec |
| By: | Andreas P. Cornett; Nils Karl Soerensen |
| Abstract: | A recent study for the Danish government has identified innovation as one of the major drivers of regional competitiveness in Denmark. Innovation and the capacity to innovate are crucial factors in the development of a firm and its ability to adapt to changes in the external environment. In particular changes in the international production system with increasing out-sourcing of physical production from Western Europe has highlighted the need for an alternative economic base in many regions. As a consequence, attention has been on the role of innovation policy in economic policy in general and regional development in particular. The aim of this paper is to analyze the interaction between the actors in the innovative environment (i.e. the firm, advisory and research institution) and the external environment as a part of a broader network of innovative relations covering intra-firm as well as extra-firm relations and processes. The project covers the following aspects: • In the first part of the paper concepts and policies of innovation are discussed with regard to their ability to move the economy toward higher growth. • The second section provides a brief overview of regional convergence and disparities in Denmark in the last decade, and compares with the trends in a broader European perspective. • The next section summarizes the findings of a recent study of the regional system of innovation in Western Denmark, and provides a critical review of the role of innovation in the process of economic restructuring in the perspective of growing internationalization in many branches. Based on this assessment the future perspectives of regional policy in Denmark are discussed on the background of the ongoing reorganization of local and regional government in general, and the introduction of five regional growth-forums in particular. |
| Date: | 2006–08 |
| URL: | http://d.repec.org/n?u=RePEc:wiw:wiwrsa:ersa06p102&r=eec |