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on European Economics |
| By: | King Banaian; Artatrana Ratha (Department of Economics, St. Cloud State University) |
| Abstract: | While the empirical literature on money demand is vast by any standards, it is relatively silent when it comes to the Euro, a major currency in the world. This hampers efforts, for example, to determine whether or not the European Central Bank can target monetary aggregates for inflation control. The difficulty has come from the lack of information about euro-wide monetary behavior, relying instead on speculative techniques for aggregating country-level data from previous periods of the European exchange rate mechanism. Now that we have six years of monthly data points, we investigate the stability of various Euro-zone monetary aggregates using the Bound Testing Procedure of Cointegration proposed by Pesaran et al. (2001) and study their policy implications. |
| Keywords: | money demand, euro, cointegration |
| JEL: | E41 |
| Date: | 2007–08 |
| URL: | http://d.repec.org/n?u=RePEc:scs:wpaper:0801&r=eec |
| By: | Frej Ohlsson, Lena (Department of Economics, School of Business, Economics and Law, Göteborg University) |
| Abstract: | This study covers the relation between the political and accounting implications of the Stability and Growth Pact, which entered into force in 1996. It describes the underlying legal framework and accounting rules and the role of the European Commission and Eurostat in this respect. Additionally, a complete description of the work in the context of the excessive deficit procedure is provided, including the provision of data by Member States, the validation process by Eurostat, the procedures in case of disagreements and the main methodological decisions taken by Eurostat in recent years. Furthermore, the implementation of the statistical framework and rules by the Member States is analysed in detail. Apart from a general chapter on the concept and use of creative accounting, a range of case studies are presented, based on the national accounts framework ESA95. The countries included in the study are Portugal, Italy, France, Germany and Sweden. A separate chapter is devoted to Greece, due to the importance and consequence of the case. The results of the analysis in the case studies show not only the complexity of the statistical framework as such and its implementation, but also the political influence. Finally, as an outcome of the developments in some countries, and in particular in Germany and France in 2003, as well as the Greek tragedy, the SGP was revised. The content and outcome of this revision are also covered.<p> |
| Keywords: | Stability and Growth Pact; SGP; excessive deficit; creative accounting; Eurostat; European Union |
| JEL: | E01 E62 E63 |
| Date: | 2007–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0268&r=eec |
| By: | Wim Fonteyne |
| Abstract: | This paper explains the continuing success of European cooperative banks through evolving comparative advantages. It points out that a cooperative is built around an intergenerational endowment without final owners, which creates particular governance challenges. Risks include the use of the endowment for purposes other than members' best interest, such as empire-building, and attempts at appropriation. The risk of empire-building is reinforced by mechanisms that foster capital accumulation and asymmetric opportunities for consolidation. The paper concludes that some form of independent external oversight of corporate governance is warranted and that cooperatives need mechanisms enabling them to better manage their capital. |
| Keywords: | Working Paper , Banks , Europe , European Union , Bank supervision , Profits , Financial stability , Financial systems , Governance , |
| Date: | 2007–07–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/159&r=eec |
| By: | Monica Billio (Department of Economics, University Of Venice Cà Foscari); Massimiliano Caporin (Dipartimento di Scienze Economiche “Marco Fanno”, University of Padova); Guido Cazzavillan (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | This paper aims at the production of a chronology for the EU15 business cycle by comparing parametric and non-parametric procedures on monthly and quarterly data as well in a combined approach. The main innovation is the joint use of the monthly series for the EU15 Gross Domestic Product (GDP) and the EU15 Industrial Production Index (IPI) from 1970 to 2003. The monthly IPI and the quarterly GDP at the EU15 level have been reconstructed starting from the available national series. The monthly GDP has then been computed using temporal disaggregation techniques. The obtained chronology is directly comparable to ones produced by several authors for the euro area. |
| Keywords: | Business cycle, Chronology, Historical reconstruction, Monthly GDP |
| JEL: | E32 C82 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:19_07&r=eec |
| By: | Anneli Kaasa; Eve Parts |
| Abstract: | This paper investigates the effect of various individual-level determinants on social capital in Europe, in order to find out whether there are differences between the transition and non-transition countries. The novelty lies in more comprehensive sets of both determinants and dimensions of social capital covered. Data from World Values Survey for 31 European countries (including 16 transition countries) are analysed. Based on the estimation results of the measurement and structural model for all countries separately, the countries are clustered into three groups to complement the comparison of transition and non-transition countries. Differently from the previous results, the findings of this study provide support for the argument that the sources of social capital are remarkably different in transition and non-transition countries. Moreover, the results indicate that within both of these country groups subgroups have to be distinguished. |
| Keywords: | social capital, European regions |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:mtk:febawb:56&r=eec |
| By: | Tim Krieger (University of Paderborn); Steffen Minter (University of Paderborn) |
| Abstract: | The question of how to proceed with illegal immigrants arriving in the southern EU member states is one of the pressing policy issues for the EU. In our article we will provide a thorough analysis of immigration policy and immigration amnesties from an economist’s perspective. In particular, we are interested in answering questions such as why (at all) some states legalize irregular immigrants and what effects unilateral policy measures in this field have in an economic union such as the EU. While most of the work in the area of immigration amnesties focuses on the single country case we extend this scenario to the case in which the legalizing country is part of a federation and spillover effects between different states may occur. Several interesting aspects will be considered in this context, in particular, potential changes of the policy mix between internal and external enforcement on the one hand and legalization on the other hand when a federal setting is considered instead of a single country. |
| Keywords: | illegal migration, immigration policy, regularization, amnesties, enforcement, interregional transfers, European Union |
| JEL: | J61 F22 R50 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:wpaper:6&r=eec |
| By: | Gaétan de Rassenfosse (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and ECARES, Université Libre de Bruxelles, Brussels.); Bruno Van Pottelsberghe (Centre Emile Bernheim, Solvay Business School, Université Libre de Bruxelles, Brussels and DULBEA, Université Libre de Bruxelles and ECARES, Université Libre de Bruxelles.) |
| Abstract: | This paper analyzes the role of patent filing fees requested by the member states of the European Patent Convention (EPC). We provide a first empirical evidence showing that the fee elasticity of the demand for priority applications is negative and significant. Given the strong variation in absolute fees and in fees per capita across countries, this result witnesses a suboptimal treatment of inventors across European countries and suggests that fees should be considered as an integral part of an IP policy, especially in the current context of worrying backlogs. In addition, we show that the transfer rate of domestic priority filings to the EPO increases with the duration of membership to the EPO and the GDP per capita of a country, suggesting that member states experience a learning curve within the EPC. The high heterogeneity in the transfer rates casts some doubts on the practice that consists in relying on filings at the EPO or at the USPTO to assess innovative performance of countries. |
| Keywords: | fees, patent filing, price elasticity. |
| JEL: | O30 O31 O38 O57 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:sol:wpaper:07-022&r=eec |
| By: | Rebeca Jiménez-Rodríguez (University of Salamanca) |
| Abstract: | Most of the studies existing in theoretical and empirical understanding of the macroeconomic consequences of oil price shocks have been focused on US aggregate data. In contrast to these studies, this paper assesses empirically the dynamic effects of oil price shocks on the output of the main manufacturing industries in six OECD countries using an identified vector autoregression for each economy. The pattern of responses to an oil price shock by industrial output is diverse across the four European Monetary Union (EMU) countries under consideration (France, Germany, Italy, and Spain), but broadly similar in the UK and the US. Evidence on cross-industry heterogeneity of oil shock effects within the EMU countries is also reported. Moreover, our baseline results are quite robust with respect to changes in the number of lags, identification assumptions, and real oil price definition. |
| Keywords: | oil price shock, identified VAR, manufacturing industries |
| JEL: | E32 Q43 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:0731&r=eec |
| By: | Simona Rasciute (Dept of Economics, Loughborough University); Eric J. Pentecost (Dept of Economics, Loughborough University); Helena I. Marques (Dept of Economics, Loughborough University) |
| Abstract: | This paper employs a novel multi-level data set and a multinomial logit model - to examine the factors explaining 1,223 foreign investment location decisions by firms in the EU(15), Japan, Norway, Russia, Switzerland and the US in 12 Central and Eastern European countries (CEECs). The highly significant empirical results, based on a general underlying model of imperfect competition, show that the responsiveness of foreign direct investment in the CEECs to country-level variables differs significantly both across sectors and across firms of different sizes and profitability. In particular, in addition to the traditional importance of market size and distance, firm size and the effective corporate tax rate are also important for the location of investment. |
| Keywords: | Multi-level data, foreign direct investment, multinomial logit model |
| JEL: | F23 P33 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_22&r=eec |
| By: | Tatiana Fic (National Bank of Poland); Ray Barrell (National Institute of Economic and Social Research, London); Dawn Holland (National Institute of Economic and Social Research, London) |
| Abstract: | New member states will join the EMU in the coming years. Setting the central parity has been and will be a challenging task, as there is a considerable amount of uncertainty, both from a theoretical and an empirical perspective, surrounding the determination of the optimal exchange rate. In effect, the probability of misalignment of the entry rate can be a non-zero one. Given the possible - if not inevitable - misspecification of the equilibrium rate it is thus advisable to focus on the effects of a misalignment of the entry rate for the economy, as it has implications for countries’ both real and nominal convergence. An overvalued exchange rate would have an adverse impact on a country’s competitiveness and its growth, while an undervalued currency would contribute to an overheating of the economy and an excessive inflation. The objective of this paper is to better understand the role of the entry rates for short run inflation and GDP developments and their implications for the inflation criterion and the real convergence process. Having estimated equilibrium exchange rates for the eight out of ten countries that entered the EU in May 2004: Czech Republic, Estonia, Hungary, Lithuania, Latvia, Poland, Slovenia and Slovakia we conduct simulations showing what their adjustments to equilibrium would be if their entry rates deviated from the optimal ones. |
| URL: | http://d.repec.org/n?u=RePEc:wse:wpaper:14&r=eec |
| By: | Cees van Beers; Elina Berghäll; Tom Poot |
| Abstract: | This paper investigates innovating firms’ determinants of R&D collaboration with domestic universities and public knowledge institutes in Finland and the Netherlands. Three questions – relevant for innovation policies - constitute the central part of this paper. First, are innovating foreign firms less or more involved in R&D co-operation with domestic public knowledge institutions than innovating domestic firms? Second, do innovating firms that are open to their external knowledge environment have a higher probability to co-operate with public partners than firms that are not or less open? Third, are public knowledge institutions in Finland and the Netherlands attractive R&D partners to innovative firms? Based on data from Community Innovation Surveys we find that foreign firms in the Netherlands are less likely to co-operate with domestic public knowledge institutions than domestic firms, while in Finland no significant difference can be detected. With regard to the second question our findings show that openness of innovating firms is an important determinant of R&D collaboration in both countries. Finally, the empirical results show that knowledge of public partners is considered useful by innovating firms to transform own ideas into concrete innovations in Finland, but not in the Netherlands. However, the type of knowledge – fundamental or applied - is important for R&D collaboration with Dutch public partners, but not for co-operating with Finnish public partners. This raises the issue whether Finnish innovation policies with a strong focus on R&D co-operation provide incentives for domestic public partners to put more emphasis on applied research. |
| Keywords: | Multinational enterprises; innovation; R&D collaboration; public knowledge institutions; national innovation systems |
| JEL: | O32 O38 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:aal:abbswp:07-12&r=eec |
| By: | Ben Hunt |
| Abstract: | In this paper, the IMF's new Global Economy Model (GEM) is used to estimate the relative importance of a number of factors argued to explain the differences in the trends in core inflation and relative prices in the United Kingdom, the Euro Area and the United States. The simulation results indicate that while the direct effect of globalization has had a larger effect in the United Kingdom than in either the United States or the Euro Area, it explains only a portion of the developments and U.K. specific factors played an important role. |
| Keywords: | Inflation , United Kingdom , Prices , Globalization , Economic models , Working Paper , |
| Date: | 2007–08–30 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:07/208&r=eec |
| By: | Pierre Billet-Legros (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Annie Delort (SESP - Service économie, statistiques et prospective - [Ministère de l'écologie, du développement et de l'aménagement durables]) |
| Abstract: | En 2005, la part du cabotage reste limitée en Europe par rapport à l’ensemble de l’activité du transport routier de marchandises : elle représente seulement 0,9 % des tonnes-kilomètres réalisées par les pavillons des vingt-six pays (pays de l’Europe des 25 à l’exception de Malte, plus la Norvège et le Liechtenstein) et 0,2 % de l’activité du pavillon français. Sur l’ensemble des pays, 1,1 % du transport national est réalisé par un transporteur étranger ; en France cette proportion atteint 2,7 %. Le cabotage en France reste effectué essentiellement par des transporteurs du Luxembourg, de Belgique, d’Espagne et d’Allemagne, même si la part de marché de certains diminue, au profit de pavillons de l’Est. |
| Keywords: | Transport routier de marchandises ; pavillon routier ; cabotage ; Europe |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00175820_v1&r=eec |
| By: | Pierre Billet-Legros (LET - Laboratoire d'économie des transports - [CNRS : UMR5593] - [Université Lumière - Lyon II] - [Ecole Nationale des Travaux Publics de l'Etat]); Annie Delort (SESP - Service économie, statistiques et prospective - [Ministère de l'écologie, du développement et de l'aménagement durables]) |
| Abstract: | En 2005, se dessine une Europe du transport routier de marchandises à deux vitesses : l’une dynamique, notamment à l’international, avec les pavillons allemand, espagnol, italien, portugais, des pays baltes, polonais ; l’autre avec les pavillons français, britannique et belge, qui perdent des parts de marché et de l’activité.<br />Les pavillons de l’Est, principalement de la Pologne et des pays baltes, développent le transport entre pays tiers au détriment du pavillon luxembourgeois dont l’activité diminue.<br />Le pavillon allemand progresse, appuyé sur son activité de transport entre pays tiers, sans doute favorisée par la place géographique centrale de ce pays dans l’Europe élargie. L’Espagne reste le pays qui a la plus grande croissance depuis 2000 mais dont le rythme ralentit cependant en 2005.<br />L’évolution de l’activité nationale du pavillon reste fortement liée à la croissance économique du pays. L’Italie, quant à elle, doit sa croissance à ses gains de parts de marchés, notamment face à la France, la Belgique et l’Allemagne. |
| Keywords: | Transport routier de marchandises ; pavillon routier ; Europe |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00175812_v1&r=eec |
| By: | Yuji Tamura (Department of Economics, Trinity College Dublin) |
| Abstract: | This paper examines whether or not being an employer was an important determinant of individual preferences for immigration restriction in the EU member states in the eve of the 2004 enlargement. Our results do not confirm that employers were more pro-immigration than the rest by expecting a reduction in the cost of labor except in the following sector: sanitation-related activities such as refuse disposal and recreational, cultural and sports activities. On the contrary, we find that employers were more likely to be anti-immigration than the rest in sectors where foreign workers were highly present, such as household activities, construction, wholesale, hotels and restaurants. |
| Keywords: | individual attitudes toward immigration, employer, EU |
| JEL: | F22 J23 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep1107&r=eec |
| By: | Marit Rønsen and Torbjørn Skarðhamar (Statistics Norway) |
| Abstract: | This paper presents results from an evaluation of a Norwegian initiative to combat poverty launched in 2003. Central to the plan is a broad spectrum of rehabilitation and activation measures intended to help long-term social security recipients from welfare to work. We illuminate short-term effects up to the end of 2004, taking a dual approach: First, we analyse transitions to work among participants in the programme and study the determinants of this process by means of survival analysis and multivariate hazard rate regression. Second, we address the question of programme effects adopting a quasi-experimental design based on propensity score matching. We find that the mean programme effect is positive, but only when work is defined fairly broadly. However, the impact varies by target group. For immigrants and single mothers, there is no impact whether we use a strict or less strict definition of work. For youth, the effect is even estimated to be negative, implying that they would have been better off without this initiative. The only significant effect in the desired direction is found among other long-term social security recipients, and applies for both the strict and less strict definition of employment. Moreover, this effect is fairly large. |
| Keywords: | Active labour market programmes; social security recipients; programme evaluation; propensity score matching. |
| JEL: | C41 H55 I38 J64 |
| Date: | 2007–10 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:519&r=eec |
| By: | Marco Francesconi; Helmut Rainer; Wilbert van der Klaauw |
| Abstract: | This paper examines the effects of theWorking Families’ Tax Credit (WFTC) on couples in Britain. We develop a simple model of household decisions which explicitly accounts for the role played by the tax and benefit system. Its main implications are then tested using panel data from the British Household Panel Survey collected between 1991 and 2002. Overall, the financial incentives of the reform had negligible effects on a wide range of married mothers’ decisions, such as eligible (working at least 16 hours per week) and full-time employment (working at least 30 hours per week), employment transitions, childcare use, and divorce rates. Women’s responses, however, were highly heterogeneous, depending on their partners’ labour supply and earnings. Mothers married to low- income men showed larger responses in employment, especially if they had younger children. They were more likely to remain in the labour force and had higher rates at which they entered it. While more likely to receive the tax credit, they also experienced a greater risk of divorce. We find virtually no effect for women with higher-income husbands. Likewise, there are no statistically significant responses among married men. |
| Keywords: | Tax credit, household labour supply, intrahousehold bargaining, divorce |
| JEL: | D19 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:san:crieff:0709&r=eec |
| By: | Tuysuz, Sukriye |
| Abstract: | This paper investigates the impact of British macroeconomic and monetary news on English interest rates level and volatility. These news correspond to Bank of England (BoE) target variables news and to unexpected monetary policy rate changes. It analyzes whether the market rate response to these news has changed since the Bank of England (BoE) was granted operational independence in May 1997. It also checks if this credibility measure has increased the predictability of BoE decisions by the market. The results reveal that after May 1997, financial markets appears better able to anticipe BoE policy decisions than before May 1997. However, Bank of England target variable news announcements and policy rate changes diffusion influence more English interest rate volatility after May 1997. This results suggests that the credibility and/or transparency of BoE might have decreased after 1997. However, the closer evolution of the realized inflation around the target fixed by the BoE and the evolution of the transparency and credibility index suggest that the BoE transparency and credibility degree increase since 1997 compare to the period prior to 1997. One possible explanation of this last results rests on uncertainty created by the several financial crises (the Asian crisis (July 1997), the Russian crisis (August 1998), the bursting of the technology and internet bubble in 2002 in USA). |
| Keywords: | Monetary policy; announcements; news; credibility; transparency; term structure of interest rates; GARCH |
| JEL: | E44 C5 E43 |
| Date: | 2007–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5263&r=eec |
| By: | Strawinski, Pawel |
| Abstract: | In the article private rate of return to higher education in the 1998-2004 period is considered. The model is based on comparative advantage theory and extended Mincerian wage equation. The extension is made to account for non-random decision to undertake studies at university level. The estimate of private rate of return in Poland is roughly 9.5%, and it is among the highest in Europe. In addition, the unexpected rise in rate of return is observed. This change has been linked to labour market transformation and Skill Bias Technological Change phenomenon. Also the influence of financing tertiary education is considered. The rate of return to higher education has risen and graduation has positively affected the obtained wages. |
| Keywords: | Return to education; private returns; skill biased technical change; sample selection |
| JEL: | I22 |
| Date: | 2007–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:5185&r=eec |
| By: | Corinne Perraudin (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I], CEE - Centre d'Etudes de l'Emploi - [Ministère de la Recherche][Ministère chargé de l'emploi]); Héloïse Petit (CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Antoine Rebérioux (EconomiX - [CNRS : UMR7166] - [Université de Paris X - Nanterre]) |
| Abstract: | Cet article étudie l'influence de la structure de propriété du capital social (cotation et identité des actionnaires) sur la gestion de l'emploi. Nous utilisons l'enquête REPONSE 2004-2005, fondée sur un échantillon de 2 930 établissements de 20 salariés et plus, représentatif du secteur marchand français. L'analyse économétrique confirme l'importance de la propriété comme déterminant de la gestion de l'emploi, que ce soit en termes de formes de mobilisation du travail (recours à l'intérim, aux CDD et à la sous-traitance), de politique salariale (niveau des rémunérations et usage de primes), de variation d'effectifs ou de formation. |
| Keywords: | Gouvernance d'entreprise, propriété sociale, gestion de l'emploi. |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00175873_v1&r=eec |