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on European Economics |
| By: | Christoffer Kok Sørensen (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); David Marqués Ibáñez (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Carlotta Rossi (Corresponding author: Banca d’Italia, via Nazionale 91, I-00184 Roma, Italy.) |
| Abstract: | We model the determinants of loans to non-financial corporations in the euro area. Using the Johansen (1992) methodology, we identify three cointegrating relationships. These relationships are interpreted as the long-run loan demand, investment and loan supply equations. The short-run dynamics of loan demand for the euro area are subsequently modelled by means of a Vector Error Correction Model (VECM). We perform a number of specification tests, which suggest that developments in loans to non-financial corporations in the euro area can be reasonably explained by the model. We then use the estimated model to analyse the impact of permanent and temporary shocks to the policy rate on bank lending to nonfinancial corporations. JEL Classification: C32, C51. |
| Keywords: | Bank credit, euro area, non-financial corporations, cointegration, error-correction model. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20090989&r=eec |
| By: | Alessandro Innocenti; Francesco Molinari |
| Abstract: | This paper provides evidence of the positive correlation between participation in the European ICT-RTD Programmes, the innovation capacity of the EU regions and the growth of regional added value adjusted by worked hours, We also offer additional support to the findings of previous studies concerning the raionale of the geographical concentration of innovation activities in some core areas of Europe. This evidence calls for a further integration of EU ICT-RTD policies at regional rather than national level, particularly encouraging the participation of regional organizations in multiple and related instruments. |
| Keywords: | regional innovation systems, regional growth, European policies, ICT RTD programmes. |
| JEL: | C23 E62 O38 R58 |
| Date: | 2008–12 |
| URL: | http://d.repec.org/n?u=RePEc:usi:depfid:1208&r=eec |
| By: | Ignacio Hernando; María J. Nieto; Larry D. Wall |
| Abstract: | This paper analyzes the determinants of bank acquisitions both within and across 25 members of the European Union (EU-25) during the period 1997–2004. Our results suggest that poorly managed banks (those with a high cost-to-income ratio) and larger banks are more likely to be acquired by other banks in the same country. The probability of being a target in a cross-border deal is larger for banks that are quoted in the stock market. Finally, banks operating in more concentrated markets are less likely to be acquired by other banks in the same country but are more likely to be acquired by banks in other EU-25 countries. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2008-26&r=eec |
| By: | Keith Kuester; Volker Wieland |
| Abstract: | In this paper, the authors aim to design a monetary policy for the euro area that is robust to the high degree of model uncertainty at the start of monetary union and allows for learning about model probabilities. To this end, they compare and ultimately combine Bayesian and worst-case analysis using four reference models estimated with pre-EMU synthetic data. The authors start by computing the cost of insurance against model uncertainty, that is, the relative performance of worst-case or minimax policy versus Bayesian policy. While maximum insurance comes at moderate costs, they highlight three shortcomings of this worst-case insurance policy: (i) prior beliefs that would rationalize it from a Bayesian perspective indicate that such insurance is strongly oriented toward the model with highest baseline losses; (ii) the minimax policy is not as tolerant of small perturbations of policy parameters as the Bayesian policy; and (iii) the minimax policy offers no avenue for incorporating posterior model probabilities derived from data available since monetary union. Thus, the authors propose preferences for robust policy design that reflect a mixture of the Bayesian and minimax approaches. They show how the incoming EMU data may then be used to update model probabilities, and investigate the implications for policy. ; Forthcoming in the Journal of the European Economic Association. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedpwp:08-29&r=eec |
| By: | František Turnovec (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic) |
| Abstract: | The concept of fair representation of voters in a committee representing different voters’ groups, such as national representations in union of states, is discussed. This concept, introduced into discussion about voting rights in the Council of European Union in 2004, was narrowed to proposal of distribution of voting weights among the member states proportionally to square roots of population. Such a distribution should guarantee the same indirect voting power to each EU citizen, measured by Penrose-Banzhaf index of voting power. In this paper we attempt to clarify this concept. |
| Keywords: | Council of Ministers, indirect voting power, Penrose-Banzhaf power index, Shapley-Shubik power index, square root rule, simple voting game |
| JEL: | C71 D72 H77 |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2009_01&r=eec |
| By: | Rebecca Ray; Janet C. Gornick; John Schmitt |
| Abstract: | This report examines the parental leave policies in 21 high-income nations and identifies five "best practices" for parental leave policies. The study shows that the U.S. has the least generous leave policies of the 21 countries examined in the report. The states exhibiting the five best practices include Finland, France, Greece, Norway, Spain, and Sweden. |
| Keywords: | parental leave |
| JEL: | J J1 J16 J18 J8 J88 J3 J33 J38 |
| Date: | 2008–09 |
| URL: | http://d.repec.org/n?u=RePEc:epo:papers:2008-23&r=eec |
| By: | António Afonso (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ricardo M. Sousa (University of Minho, Department of Economics and Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 - Braga, Portugal; London School of Economics, Department of Economics and Financial Markets Group, Houghton Street, London WC2 2AE, United Kingdom.) |
| Abstract: | This paper investigates the link between fiscal policy shocks and movements in asset markets using a Fully Simultaneous System approach in a Bayesian framework. Building on the works of Blanchard and Perotti (2002), Leeper and Zha (2003), and Sims and Zha (1999, 2006), the empirical evidence for the U.S., the U.K., Germany, and Italy shows that it is important to explicitly consider the government debt dynamics when assessing the macroeconomic effects of fiscal policy and its impact on asset markets. In addition, the results from a VAR counter-factual exercise suggest that: (i) fiscal policy shocks play a minor role in the asset markets of the U.S. and Germany; (ii) they substantially increase the variability of housing and stock prices in the U.K.; and (iii) government revenue shocks have apparently contributed to an increase of volatility in Italy. JEL Classification: C32, E62, G10, H62. |
| Keywords: | Bayesian Structural VAR, fiscal policy, housing prices, stock prices. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20090990&r=eec |
| By: | António Afonso (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Ricardo M. Sousa (University of Minho, Department of Economics and Economic Policies Research Unit (NIPE), Campus of Gualtar, 4710-057 - Braga, Portugal; London School of Economics, Department of Economics and Financial Markets Group, Houghton Street, London WC2 2AE, United Kingdom.) |
| Abstract: | We investigate the macroeconomic effects of fiscal policy using a Bayesian Structural Vector Autoregression approach. We build on a recursive identification scheme, but we (i) include the feedback from government debt (ii); look at the impact on the composition of output; (iii) assess the effects on asset markets (via housing and stock prices); (iv) add the exchange rate; (v) assess potential interactions between fiscal and monetary policy; (vi) use quarterly data, particularly, fiscal data; and (vii) analyze empirical evidence from the U.S., the U.K., Germany, and Italy. The results show that government spending shocks, in general, have a small effect on GDP; lead to important “crowding-out” effects; have a varied impact on housing prices and generate a quick fall in stock prices; and lead to a depreciation of the real effective exchange rate. Government revenue shocks generate a small and positive effect on both housing prices and stock prices that later mean reverts; and lead to an appreciation of the real effective exchange rate. The empirical evidence also shows that it is important to explicitly consider the government debt dynamics in the model. JEL Classification: C11, C32, E62, H62. |
| Keywords: | Fiscal policy, Bayesian Structural VAR, debt dynamics. |
| Date: | 2009–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20090991&r=eec |
| By: | Robert Orlowski; Regina T. Riphahn |
| Abstract: | We extend the literature on transition economies¿ wage structures by investigating the returns to tenure and experience. This study applies recent panel data and estimation approaches that control for hitherto neglected biases. We compare the life cycle structure in East and West German wages for fulltime employed men in the private sector. The patterns in the returns to seniority are similar for the two regional labor markets. The returns to experience lag behind in the East German labor market, even almost 20 years after unification. The results are robust when only individuals are considered who started their labor market career in the market economy and they hold across skill groups. |
| Keywords: | wage structure, life cycle earnings, returns to tenure, returns to experience |
| JEL: | J31 J24 |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp148&r=eec |