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on European Economics |
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Issue of 2024‒09‒02
27 papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Nauro F. Campos; Corrado Macchiarelli; Fotios Mitropoulos |
| Abstract: | This paper provides new estimates of Okun’s unemployment-output relationship in euro area countries between 1979 and 2019. We find our structural estimates are stable but substantially lower than the reduced-form estimates that tend to characterise the literature and that the responsiveness of output to unemployment is driven by idiosyncratic factors in both euro core and periphery countries. The results are robust to conditioning on wage bargaining institutional set-ups and, yet, in the euro periphery, we find product market regulation as playing a major role in explaining the significance of Okun’s law estimates across countries. |
| Keywords: | economic growth; unemployment; Okun’s Law; Panel VAR |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/172 |
| By: | Glas, Alexander; Schölkopf, Julius |
| Abstract: | On 6 June 2024, the European Central Bank (ECB) lowered the main refinancing operations (MRO) rate from 4.5% to 4.25%. This decision followed a period of elevated interest rates intended to combat high inflation in the euro area, which peaked at 10.6% in October 2022 in the aftermath of the COVID-19 pandemic and the Russian invasion of Ukraine. Although inflation levels are now closer to the ECB's medium-term target of 2%, some doubt remains on whether the inflationary pressure has truly abated, since the last mile of the inflation cycle is often perceived as challenging. Indeed, inflation increased again in May 2024 to 2.6%, from 2.4% in April, and the ECB has not committed itself to a certain interest rate path. Instead, it follows a data-dependent meeting-by-meeting approach for further interest rate decisions. In this policy brief, we analyse whether and how much professional forecasters and market analysts disagree on the nature and speed of future interest rate decisions by the ECB. We also consider the role of uncertain dynamics of future inflation and the economic recovery in the euro area to explain the dispersion of interest rate expectations. For this purpose, we asked the participants in the June 2024 wave of the ZEW's Financial Market Survey for their expectations regarding interest rate decisions at upcoming Governing Council meetings. We condition the individual responses on the respondents' short- and medium-term inflation and GDP growth expectations and supplement our findings with similar evidence for the US. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:300832 |
| By: | Palenzuela, Diego Rodriguez; Saiz, Lorena; Stoevsky, Grigor; Tóth, Máté; Warmedinger, Thomas; Grigoraș, Veaceslav |
| Abstract: | The monitoring and analysis of the business cycle is a central element of inputs to monetary policy decision-making. This report contributes to the analysis of business cycles in the euro area in three dimensions. First, in terms of business cycle dating, it proposes automated procedures to characterise the business cycle situation of the euro area and its main components, across countries and sectors. Second, it investigates how business cycle synchronisation has evolved over the last 20 years. Third, it analyses business cycle drivers from several perspectives, including the financial and international dimension, interconnectedness, demand and supply. It also features an early analysis of the economic implications of the COVID-19 pandemic. Rather than reaching strong conclusions on the history of the euro area business cycle, the primary aim of the report is to promote sound methods and approaches that are part of ongoing enhancements of the analytical infrastructure designed to analyse hard-to-ascertain questions on the nature and characteristics of euro area business cycle dynamics. JEL Classification: C10, E32, E37 |
| Keywords: | business cycle dating, characteristics, drivers, synchronisation |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbops:2024354 |
| By: | Philipp Engler; Gianluigi Ferrucci; Pawel Zabczyk; Tianxiao Zheng |
| Abstract: | We provide new evidence on the spillover effects of ECB monetary policy shocks to emerging European economies, using a combination of empirical methods and model-based simulations and focusing on spillovers from interest rate and balance sheet policies implemented by the ECB. We consider an event study set around the ECB policy announcement in June 2022 and also use local projections to estimate regional spillovers in a panel of 16 Emerging European countries spanning 1999 to 2022. Identifying ECB monetary policy shocks as the unexplained component of changes in the three-month Euribor futures rate, we find that ECB monetary policy tightening induces more than one-for-one changes in government bond yields in Emerging Europe, as well as sizable increases in sovereign spreads, domestic currency depreciations, and significantly lower output. Model simulations using a two-country DSGE calibrated to the euro area and its Eastern European neighbors reveal that a conventional tightening, achieved through interest rate increases, provides a more favorable inflation-output trade-off compared to balance sheet tightenings. The extent of spillovers from quantitative tightening depends on the speed of balance sheet reduction, and it is larger under a fixed exchange rate regime. |
| Keywords: | Monetary Policy; Quantitative Easing; International Spillovers |
| Date: | 2024–08–09 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfwpa:2024/170 |
| By: | Eickmeier, Sandra; Petersen, Luba |
| Abstract: | We examine public trust in the European Central Bank (ECB) and its determinants using data from the Bundesbank Household Panel survey for Germany. Employing an interdisciplinary approach that integrates insights from political science and psychology, we offer a fresh perspective on the factors influencing central bank trust that is more holistic than the conventional one. Our primary findings can be summarized as follows. Households who state that competence, which we define as the ECB's performance in maintaining stable prices and making decisions grounded in rules, science, and data, matters for their trust in the ECB, tend to express higher trust in the ECB. Conversely, those who place greater importance on values, particularly the integrity of top central bankers, honest communication and broader concern, tend to trust the ECB less. Trust in the ECB also hinges on trust in political institutions more generally and, to a lesser extent, on generalized trust (i.e. trust in others). |
| Keywords: | Central banks, trust, survey, central bank communication, values, competence, experiences, credibility |
| JEL: | E7 E58 E59 C93 D84 Z13 Z18 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:bubdps:300702 |
| By: | Georg Schneider; Frank Stähler; Georg U. Thunecke |
| Abstract: | Border adjustment taxes like the value-added tax (VAT) are commonly regarded as establishing a level-playing field for international competition. We employ a structural gravity model in order to analyse the effects of the VAT on trade in final goods in the European Union (EU). We find that the VAT is de facto non-neutral. A one percentage point VAT increase reduces aggregate imports and internal trade by 3.1% and implies a 1.8 to 5.4% reduction of imports relative to internal trade. Based on these findings, we conduct a counterfactual analysis and illustrate that VAT rate changes simply substantial welfare effects for an average country in the European Union. |
| Keywords: | Structural gravity, value-added taxation, neutrality, discrimination, border adjustment |
| JEL: | F10 F14 H24 |
| URL: | https://d.repec.org/n?u=RePEc:mpi:wpaper:tax-mpg-rps-2023-20 |
| By: | Charles Yuji Horioka; Luigi Ventura |
| Abstract: | In this paper, we analyze the saving motives of European households using micro-data from the Household Finance and Consumption Survey (HFCS), which is conducted by the European Central Bank. We find that the rank ordering of saving motives differs greatly depending on what criterion is used to rank them. For example, we find that the precautionary motive is the most important saving motive of European households when the proportion of households saving for each motive is used as the criterion to rank them but that the retirement motive is the most important saving motive of European households if the quantitative importance of each motive is taken into account. Moreover, the generosity of social safety nets seems to affect the importance of each saving motive, with saving for the retirement motive being less important in countries with generous public pension benefits and saving for the precautionary motive being less important in countries with generous health systems. These findings suggest that the retirement motive and the precautionary motive are the dominant motives for saving in Europe partly because social safety nets are not fully adequate. Our finding that saving motives that are consistent with the selfish life-cycle model as well as saving motives that are consistent with the altruism model are important in Europe implies that the two models coexist in Europe, as is the case in other parts of the world. However, our finding that the retirement motive, which is the saving motive that most exemplifies the selfish life-cycle model, is of dominant importance in Europe strongly suggests that this model is far more applicable in Europe than is the altruism model. Moreover, our finding that the intergenerational transfers motive, which is the saving motive that most exemplifies the altruism model, accounts for only about one-quarter of total household wealth in Europe provides further corroboration for this finding. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:dpr:wpaper:1251 |
| By: | López, Lucia; Odendahl, Florens; Parrága, Susana; Silgado-Gómez, Edgar |
| Abstract: | This paper uses a Bayesian Structural Vector Autoregressive (BSVAR) framework to estimate the pass-through of unexpected gas price supply shocks on HICP inflation in the euro area and its four largest economies. In comparison to oil price shocks, gas price shocks have approximately one-third smaller pass-through to headline inflation. Country-specific results indicate gas price increases matter more for German, Spanish and Italian inflation than for French inflation, hinging on the reliance on energy commodities in consumption, production, and different electricity prices regulation. Consistent with gas becoming a prominent energy commodity in the euro area, including time-variation through a time-varying parameter BVAR demonstrates a substantially larger impact of gas price shocks on HICP inflation in recent years. The empirical estimates are then rationalized using a New Keynesian Dynamic Stochastic General Equilibrium (NK-DSGE) model augmented with energy. In the model, the elasticity of substitution between gas and non-energy inputs plays a critical role in explaining the inflationary effects of gas shocks. A decomposition of the recent inflation dynamics into the model structural shocks reveals a larger contribution of gas shocks compared to oil shocks. JEL Classification: C11, C32, E31, Q41 |
| Keywords: | Bayesian VARs, inflation, natural gas and oil shocks, new Keynesian DSGE |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20242968 |
| By: | Marzi, Marta Serena Liliana; Marini, Alessandra; Cherchi, Ludovica; Cenedese, Francesco |
| Abstract: | Across European Union (EU) countries, the institutional design of Minimum Income (MI) programs varies widely in terms of the benefits and services provided to recipients, despite significant convergence toward a similar MI model and shared common approaches. This discussion paper investigates the delivery of social inclusion pathways, i.e., non-monetary support components to foster MI recipients’ social inclusion and highlights common challenges and good practices across eight EU case study countries (Belgium, France, Germany, Greece, Italy, Portugal, Spain, and Sweden). The paper shows that while some countries prioritize labor activation for workforce reintegration of MI recipients, others aim for broader social inclusion, recognizing the challenges in integrating such recipients into the labor market due to their complex needs. Moreover, the paper examines how the social inclusion pathway and case management interventions in MI programs affect recipient’s welfare within poverty-targeted programs. It notes the lack of evidence on the effectiveness and impact of social inclusion pathways within MIs and mentions ongoing evaluations in Spain, Italy, and France to address this gap. |
| Date: | 2024–07–30 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:hdnspu:193099 |
| By: | Adam Bahelka; Harmen de Weerd |
| Abstract: | Inflation is one of the most important economic indicators closely watched by both public institutions and private agents. This study compares the performance of a traditional econometric model, Mixed Data Sampling regression, with one of the newest developments from the field of Artificial Intelligence, a foundational time series forecasting model based on a Long short-term memory neural network called Lag-Llama, in their ability to nowcast the Harmonized Index of Consumer Prices in the Euro area. Two models were compared and assessed whether the Lag-Llama can outperform the MIDAS regression, ensuring that the MIDAS regression is evaluated under the best-case scenario using a dataset spanning from 2010 to 2022. The following metrics were used to evaluate the models: Mean Absolute Error (MAE), Mean Absolute Percentage Error (MAPE), Mean Squared Error (MSE), correlation with the target, R-squared and adjusted R-squared. The results show better performance of the pre-trained Lag-Llama across all metrics. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.08510 |
| By: | Feld, Lars P.; Hassib, Joshua |
| Abstract: | Cohesion policy in the European Union (EU) has been widely accepted as a tool to advance the catch-up process, i.e., helping member countries with lower GDP per capita to grow faster economically in order to arrive at similarly high-income levels as member countries with higher GDP per capita. However, empirical studies provide contradicting evidence as to the success of structural funds in this regard. From a political economics perspective, EU structural funds and their instruments of cohesion policy, but also EU agricultural policy, are interpreted as providing for a compensation for poorer member countries' agreement on additional steps of European integration. In recent times, climate policy has entered the cohesion strategy of the EU as higher energy costs due to carbon pricing may require programs for transformation of the existing carbon intensive capital stock to a carbon-neutral capital stock. Structural funds should thus help countries in the transformation process to carbon neutrality such that they do not fall behind. An example is Next Generation EU (NGEU) that is aiming at member countries' transition to carbon neutrality. In this paper, the goals of EU cohesion policy are contrasted with the necessities of climate policy in order to fight climate change. Potential conflicts between the goals of cohesion policy and climate policy are highlighted. |
| Keywords: | Cohesion policy, Climate policy, Common market, Currency union, Multi-level governance, European Union |
| JEL: | F42 F55 Q58 R58 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewdip:300672 |
| By: | Erdinc Akyildirim (University of Zurich); Shaen Corbet (Dublin City University ; University of Waikato - Management School); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); David Staunton (Central Bank of Ireland) |
| Abstract: | This study examines the financial impact of Corporate Social Irresponsibility (CSI) events on European banks. Exploiting a dataset of 11, 832 reputational shocks from 2007 through 2023, we find evidence of significant negative abnormal stock returns and increased volatility following CSI media coverage. High-severity media coverage, as well as the reporting of previously unknown problems, increases the magnitude of the shock. We complement the main analysis with a rich dataset of bank characteristics to explain variations in the results, finding that proactive ESG engagement buffers against reputational risks. European banks with higher deposit instability exhibit especially negative short-term returns, reflecting the interconnections between investor and depositor behaviour. Changes in total deposits that coincide with negative CSI news magnify the effect on stock prices and volatility. A range of placebo testing procedures are employed to demonstrate that these effects are specific to the bank-level CSI events in our data and not caused by general market noise. The findings underscore the importance of ESG risk management strategies in foreseeing and mitigating adverse reactions from investors and depositors. |
| Keywords: | Banking, Reputation, Sentiment, ESG, Abnormal Returns, Volatility |
| JEL: | G14 G21 G32 M14 Q56 |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2439 |
| By: | Guarascio, Dario; Reljic, Jelena; Zezza, Francesco |
| Abstract: | This paper analyses energy vulnerability and resilience in the EU. First, a comprehensive review of the relevant literature is carried out, discussing key concepts and indicators used to assess countries' relative positioning vis-à-vis energy shocks. Second, we rely on a large set of indicators (i.e., share of energy intensive industries, import dependency and market concentration, productive and technological capabilities in the renewables domain, policy efforts to increase energy resilience) to provide a thorough mapping of the EU Member States positioning in terms of energy vulnerability and resilience. Third, we assess industrial and energy policy actions put in place at both the EU and the national level, highlighting relevant heterogeneities and discussing whether policy efforts are consistent with the degree of vulnerability of Member States. |
| Keywords: | Energy vulnerability, resilience, Europe, industrial policy |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:oefsew:300845 |
| By: | International Monetary Fund |
| Abstract: | The euro area economy has been resilient in the face of multiple, large shocks, including the pandemic, Russia’s gas shut-off, and fallout from the war in Ukraine. Nonetheless, the adverse shocks have had persistent effects which shape economic prospects. Energy-intensive industries, in particular, have struggled to adjust to higher input costs and continue to underperform. Despite subdued overall activity, employment growth remains robust. Inflation has declined significantly from its late-2022 peak in response to the ECB’s policy tightening and the decline in commodity prices. |
| Date: | 2024–07–30 |
| URL: | https://d.repec.org/n?u=RePEc:imf:imfscr:2024/248 |
| By: | Zareh, Asatryan; Birkholz, Carlo; Heinemann, Friedrich |
| Abstract: | Cohesion Policy (CP) has been a central economic policy tool of the EU for several decades. In the current context of fundamental challenges facing the EU, and ahead of the next seven-year budgetary cycle, Europe has the opportunity to rethink and reform the EU budget and CP in particular. This policy brief condenses the insights from a large research project on CP aiming to contribute to this reform debate. The report was prepared by a group of European experts with the support of the German Federal Ministry of Finance and consists of 14 stand-alone chapters. These chapters contribute to the following three broad questions: What are the fundamental rationales for CP today and what should the future path of this policy look like in a changing environment? What do we know about the impact of over 30 years of CP in the light of its objectives? And what are the key constraints and enablers for a successful CP? |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:300830 |
| By: | Dylla, Carolin; Ries, Dorothea; Schütt, Karolina |
| Abstract: | As European pension systems are struggling to provide financial security in retirement under the pressure of demographic change, poverty in old age disproportionally affects women. Given these developments, private investment is becoming ever more important to securing financial means after retirement. Therefore, this paper investigates which factors determine female and male investment behaviour in Germany regarding different asset classes? It is hypothesised that (i) differences in investment behaviour are mainly driven by wealth and income. (ii) However, even after controlling for income, there are still gender differences in investment behaviour. We conduct a thorough literature review and empirical analysis based thereon, using the 2017 data wave of the ECB's Household Finance and Consumption Survey (HFCS) for German single households. Controlling for selected socio-economic variables, we find that women have significantly less holdings in risky assets. This observation holds even when adding gross household income as further control variable. However, no difference between male and female investment behaviour can be detected in relatively risk-free asset classes. The findings in this paper contribute to existing and future research - its literature points out the ambiguity and lack of coherence in existing research in the topic of gendered investment behaviour. Further, its empirical analysis provides new insights using the updated 2017 HFCS dataset, with most previous research based on 2010/14 HFCS data. Lastly, we are drawing attention to the unequal strategies of wealth accumulation between men and women and their ramifications for wealth distribution providing important contextualisation for future policy-making. |
| Keywords: | Gender, Inequalities, Finance, Portfolio Choices, Assets, HFCS |
| JEL: | D31 G11 J16 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ipewps:300843 |
| By: | Brückbauer, Frank; Kirschenmann, Karolin |
| Abstract: | Ongoing global trends like climate change require firms to invest in projects that support their transformation. In order to unlock the huge sums of private capital necessary for these investments, the engagement of institutional investors appears to be crucial. In a project funded by ZEW's Sponsors' Association, we investigate whether and how a better integration of the European banking system and capital markets can be an effective short- and medium-term solution to unleash the financial sector's potential in supporting the green transformation. Capital markets can support bank lending by financing assets on- and off-balance-sheet. Securitizations allow institutional investors to directly invest into cash flows from specific assets. Our analysis shows that the current market potential of European securitizations is much smaller than wished for and that the securitization model envisaged by the Capital Markets Union (CMU) project does not seem to fit the European context. Instead, policymakers should embrace a realistic view on the market potential of European securitizations. They also need to be clear in their communication about the trade-offs between unconventional central bank policies and the development of securitization markets. Additionally, they should closely watch the incentives that come with the new non-financial reporting indicators for banks regarding securitization. Most importantly, to accelerate the green transition, policymakers need to encourage the necessary private real investments in the first place by creating a conducive economic environment and the right incentives. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:zewpbs:300833 |
| By: | Blockeel, Johan; Grovermann, Christian; Finger, Robert |
| Abstract: | The European Union (EU) aims to increase the adoption of organic farming as part of its Farm to Fork Strategy. However, farmers face various adoption hurdles, such as the efficacy of crop protection, as well as implications for crop yields, costs, labour and ultimately farm income. Yet, we currently lack comprehensive large-scale empirical evidence on the economics of organic farming in the EU. Therefore, this study assesses the economic performance of organic farming in the EU using a large-scale cross-country dataset. It consists of an unbalanced panel of 151, 560 non-organic and 10, 531 organic farms from the European Farm Accountancy Data Network, covering seven different farm types and 16 EU countries. Our analysis specifically focuses on crop protection expenditures, total crop specific costs, as well as labour and gross farm income on a per hectare basis. We find that organic farming adoption significantly reduces crop protection expenditures as well as total crop specific costs across all farming types. Differences in farm-level labour inputs between organic and non-organic farms turned out to be only minor. Farm income is smaller for organic farms without subsidies but higher when accounting for subsidies. However, all effects are highly heterogeneous across farm types and across space. Our study contributes to a better understanding of the economic implications of organic farming within the EU. These insights can inform both practitioners and policy decision-makers and facilitate the achievement of regional organic farming targets. |
| Keywords: | Farm Management |
| Date: | 2024–08–07 |
| URL: | https://d.repec.org/n?u=RePEc:ags:cfcp15:344254 |
| By: | Skyrman, Viktor |
| Abstract: | To address Europe's environmental, economic, and geopolitical challenges, the European Commission has decided to proactively accelerate digital transformation and decarbonization through industrial policies. As the annual green investment gap exceeds 2 percent of the EU's GDP, of particular relevance is not least how the EU's industrial programs will be financed. Amid scarce fiscal resources and public sector austerity, paradigmatic cases of (financial) derisking aiming to "escort" private finance to green but unprofitable investments have been key to European policymakers' aim to accelerate the green transition. This paper offers two contributions in this context. Firstly, it examines to what extent and how finance for industrial policy has been provided in Europe since the early 2020s. Secondly, it conceptually advances the political economy of derisking literature by elaborating on progressive derisking and Big Green State policies as alternative industrial policy financing programs, and discusses those programs in relation to Europe's macrofinancial regime. |
| Keywords: | Industrial policy, derisking, macrofinancial regimes, climate change, the green transition, digital transformation, European policy studies, political economy, development finance, financialization |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:oefsew:300846 |
| By: | Hurlin, Christophe (University of Orleans); Pérignon, Christophe (HEC Paris) |
| Abstract: | This survey proposes a theoretical and practical reflection on the use of machine learning methods in the context of the Internal Ratings Based (IRB) approach to banks' capital requirements. While machine learning is still rarely used in the regulatory domain (IRB, IFRS 9, stress tests), recent discussions initiated by the European Banking Authority suggest that this may change in the near future. While technically complex, this subject is crucial given growing concerns about the potential financial instability caused by the banks' use of opaque internal models. Conversely, for their proponents, machine learning models offer the prospect of better measurement of credit risk and enhancing financial inclusion. This survey yields several conclusions and recommendations regarding (i) the accuracy of risk parameter estimations, (ii) the level of regulatory capital, (iii) the trade-off between performance and interpretability, (iv) international banking competition, and (v) the governance and operational risks of machine learning models. |
| Keywords: | Banking; Machine Learning; Artificial Intelligence; Internal models; Prudential regulation; Regulatory capital |
| JEL: | C10 C38 C55 G21 G29 |
| Date: | 2023–06–25 |
| URL: | https://d.repec.org/n?u=RePEc:ebg:heccah:1480 |
| By: | D'Al, Francesco; Santarelli, Enrico; Vivarelli, Marco |
| Abstract: | In this paper we integrate the insights of the Knowledge Spillover Theory of Entrepreneurship and Innovation (KSTE+I) with Schumpeter's idea that innovative entrepreneurs creatively apply available local knowledge, possibly mediated by Marshallian, Jacobian and Porter spillovers. In more detail, in this study we assess the degree of pervasiveness and the level of opportunities brought about by AI technologies by testing the possible correlation between the regional AI knowledge stock and the number of new innovative ventures (that is startups patenting in any technological field in the year of their foundation). Empirically, by focusing on 287 Nuts-2 European regions, we test whether the local AI stock of knowledge exerts an enabling role in fostering innovative entry within AI-related local industries (AI technologies as focused enablers) and within non AI-related local industries, as well (AI technologies as generalised enablers). Results from Negative Binomial fixed-effect and Poisson fixed-effect regressions (controlled for a variety of concurrent drivers of entrepreneurship) reveal that the local AI knowledge stock does promote the spread of innovative startups, so supporting both the KSTE+I approach and the enabling role of AI technologies; however, this relationship is confirmed only with regard to the sole high-tech/AI-related industries. |
| Keywords: | KSTE+I, Artificial Intelligence, innovative entry, enabling technologies |
| JEL: | O33 L26 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:glodps:1473 |
| By: | Obst, Thomas; Stockhausen, Maximilian; Metzger, Arthur |
| Abstract: | Die Inflation in der Eurozone befindet sich auf dem Rückzug. Ein Aufatmen wäre aber verfrüht. Zweitrundeneffekte im Arbeitsmarkt sind im vollen Gange und setzen die Geldpolitik weiter unter Druck. |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:iwkkur:300823 |
| By: | Lionel Fontagn\'e; Francesca Micocci; Armando Rungi |
| Abstract: | This paper introduces a causal machine learning approach to investigate the impact of the EU-Canada Comprehensive Economic Trade Agreement (CETA). We propose a matrix completion algorithm on French customs data to obtain multidimensional counterfactuals at the firm, product and destination levels. We find a small but significant positive impact on average at the product-level intensive margin. On the other hand, the extensive margin shows product churning due to the treaty beyond regular entry-exit dynamics: one product in eight that was not previously exported substitutes almost as many that are no longer exported. When we delve into the heterogeneity, we find that the effects of the treaty are higher for products at a comparative advantage. Focusing on multiproduct firms, we find that they adjust their portfolio in Canada by reallocating towards their first and most exported product due to increasing local market competition after trade liberalization. Finally, multidimensional counterfactuals allow us to evaluate the general equilibrium effect of the CETA. Specifically, we observe trade diversion, as exports to other destinations are re-directed to Canada. |
| Date: | 2024–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2407.07652 |
| By: | Kohnert, Dirk |
| Abstract: | L'Union européenne (UE) se trouve confrontée à un besoin critique de terres rares, en particulier de produits raffinés essentiels à la production de voitures électriques, de turbines et d'autres applications technologiques. Cependant, le processus de raffinage est non seulement énergivore, mais pose également des risques environnementaux importants. Par conséquent, les communautés locales, comme en témoignent les exemples en Espagne et au Portugal, s'opposent avec véhémence à de telles opérations dans leur voisinage, préconisant une politique du « chacun pour soi ». L’UE dépend actuellement fortement de la Chine, qui contrôle la majorité de la transformation mondiale, avec 90 % de toutes les terres rares et 60 % du lithium. En réponse à ces défis, l’UE a franchi une étape cruciale en novembre 2023 en concluant un accord préliminaire sur la loi européenne sur les matières premières critiques (CRMA). Cette initiative législative vise à améliorer et à diversifier l'approvisionnement de l'UE en matières premières critiques (CRM), à favoriser l'économie circulaire, à renforcer l'autonomie stratégique de l'Europe et à explorer des alternatives pour atténuer la dépendance. Les récentes crises transnationales, notamment les perturbations des chaînes d'approvisionnement lors de la pandémie de COVID-19 et l'invasion de l'Ukraine par la Russie, soulignent l'impératif de garantir des chaînes d'approvisionnement sécurisées dans tous les secteurs économiques. Ces crises soulignent également l’influence considérable exercée par les principales économies émergentes, notamment les pays BRICS (Brésil, Russie, Inde, Chine et Afrique du Sud), qui dominent les principales chaînes d’approvisionnement mondiales, notamment celles des matières premières critiques (CRM). La Russie joue un rôle central en tant que l'un des plus grands fournisseurs mondiaux de palladium (40 % de l'offre mondiale), le deuxième fournisseur de platine (13 %) et de nickel (12 %) et un contributeur substantiel d'aluminium et de cuivre. En outre, la Russie possède le potentiel de devenir un acteur majeur sur le marché des terres rares grâce à ses vastes réserves. Le pays représente également une part considérable des acquisitions de l'UE, notamment le palladium (41 %), le platine (16 %), le cobalt (5 %) et le lithium (4 %). La Russie est notamment la principale source de l'UE pour la transformation des métaux du groupe du platine (iridium, platine, rhodium, ruthénium ; 40 %), l'extraction de la roche phosphatée (20 %), la transformation du lithium (4 %) et la transformation du scandium (1 %). Pour parvenir à une plus grande indépendance en matière de fourniture externe de CRM, l’UE doit réaliser des investissements importants dans ses installations d’extraction et de transformation. Cependant, l’exploitation minière ne représente que la phase initiale ; les étapes suivantes impliquent la séparation des éléments de terres rares (REE) des oxydes, le raffinage et le forgeage d'alliages, un processus complexe, hautement spécialisé et en plusieurs étapes. À cet égard, les nouveaux arrivants comme l’Europe sont à la traîne, la Chine ayant consolidé sa position dominante à chaque étape grâce à une stratégie industrielle concertée à long terme soutenue par des subventions publiques. |
| Abstract: | The European Union (EU) finds itself in a critical need for rare earths, particularly the refined products essential for the production of electric cars, turbines, and other technological applications. However, the refining process is not only energy-intensive but also poses significant environmental risks. Consequently, local communities, as evidenced by instances in Spain and Portugal, vehemently oppose having such operations in their vicinity, advocating a "beggar thy neighbour" policy. The EU currently relies heavily on China, which controls the majority of global processing, commanding 90% of all rare earths and 60% of lithium. In response to these challenges, the EU took a crucial step in November 2023 by reaching a preliminary agreement on the European Critical Raw Materials Act (CRMA). This legislative initiative aims to enhance and diversify the EU's supply of critical raw materials (CRM), foster the circular economy, fortify Europe's strategic autonomy, and explore alternatives to mitigate dependence. Recent transnational crises, including disruptions to supply chains during the COVID-19 pandemic and Russia's invasion of Ukraine, underscore the imperative of secure supply chains across all economic sectors. These crises also underscore the significant influence wielded by major emerging economies, notably the BRICS countries (Brazil, Russia, India, China, and South Africa), which dominate key global supply chains, including those for critical raw materials (CRMs). Russia plays a pivotal role as one of the world's largest suppliers of palladium (40% of global supply), the second-largest supplier of platinum (13%) and nickel (12%), and a substantial contributor of aluminium and copper. Furthermore, Russia possesses the potential to emerge as a major player in the rare earths market due to its extensive reserves. The country also accounts for a considerable share of the EU's acquisitions, including palladium (41%), platinum (16%), cobalt (5%), and lithium (4%). Notably, Russia serves as the primary EU source for platinum group metals processing (iridium, platinum, rhodium, ruthenium; 40%), phosphate rock extraction (20%), lithium processing (4%), and scandium processing (1%). To attain greater independence in external CRM provision, the EU must make significant investments in its mining and processing facilities. However, mining represents merely the initial phase; subsequent steps involve the separation of rare earth elements (REE) from oxides, refining, and alloy forging a complex, highly specialized, multi-stage process. In this regard, relative newcomers like Europe lag behind, as China has solidified its dominant position in each phase through a concerted, long-term industrial strategy supported by state subsidies |
| Keywords: | terres rares, transition énergétique, changement climatique, pollution |
| JEL: | D24 D43 D52 E23 F18 Q53 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:300883 |
| By: | Roussel, Yannick; Audi, Marc |
| Abstract: | The paper delves into the intricate relationship between economic growth, tourism arrivals, and climate change, focusing specifically on the European economy over the period 1990-2019 using panel data analysis. The empirical framework examines the interplay between these variables and sheds light on their implications for environmental sustainability and economic development. The econometric analysis reveals several noteworthy findings. Firstly, the equation assessing economic growth underscores the positive correlation between tourist arrivals, energy consumption, carbon dioxide emissions, openness to trade, and economic growth. These results align with the prevailing literature, highlighting the multifaceted drivers of economic expansion in the context of tourism and trade. However, the study diverges from conventional wisdom by challenging the notion of a strictly positive correlation between tourism and climate change. While previous research predominantly suggests a positive association, our findings suggest an alternative hypothesis, wherein tourist arrivals exhibit a negative correlation with climate change indicators. This nuanced perspective underscores the complex dynamics at play and emphasizes the need for further investigation into the environmental implications of tourism. Furthermore, the application of fixed effects and GMM-system techniques provides additional insights into the determinants of carbon dioxide emissions. Income per capita and energy consumption emerge as significant drivers of CO2 emissions, highlighting the role of economic prosperity and energy consumption patterns in shaping environmental outcomes. Interestingly, tourism arrivals and squared income per capita demonstrate a negative correlation with CO2 emissions, suggesting that higher levels of tourism and income per capita may mitigate environmental pressures. Additionally, the analysis of tourism arrival determinants reveals that income per capita, openness to trade, and energy consumption exert a positive effect on tourism arrivals. These findings underscore the role of economic prosperity, trade openness, and energy infrastructure in driving tourist inflows, highlighting the interconnectedness of economic and tourism dynamics. The paper contributes to the growing body of literature on the nexus between economic growth, tourism, and climate change, offering valuable insights for policymakers and stakeholders. By elucidating the complex relationships between these variables, the study informs evidence-based policy interventions aimed at promoting sustainable tourism practices and mitigating the environmental impact of economic growth. Ultimately, a holistic approach that balances economic development objectives with environmental stewardship is essential for fostering long-term prosperity and sustainability in the European economy and beyond. |
| Keywords: | Carbon Dioxide Emissions, Energy Consumption, GMM-System Techniques, Income Per Capita |
| JEL: | C33 O13 Q56 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:121529 |
| By: | Regina T. Riphahn; Irakli Sauer |
| Abstract: | We investigate the wage assimilation of East Germans who migrated to West Germany after reunification (1990-1999). We compare their wage assimilation to that of ethnic German immigrants from Eastern Bloc countries and international immigrants to West Germany who arrived at the same time. The analysis uses administrative as well as survey data. The results suggest that East Germans faced significant initial earnings disadvantages in West Germany, even conditional on age and education. However, these disadvantages were smaller than those of international immigrants, supporting the beneficial role of cultural similarity. The earnings gap relative to West German natives narrowed over time for all immigrants. These findings are robust to controlling for potentially endogenous return migration and labor force participation. Controls for fixed effects reveal that positive assimilation for East German and international immigrants was concentrated among highly educated immigrants. |
| Keywords: | migration, earnings assimilation, internal migration, labor market integration, cultural similarity, Germany, reunification |
| JEL: | F15 J31 J61 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11233 |
| By: | Krahé, Max |
| Abstract: | Seit einigen Jahren wird diskutiert, wie Europas Souveränität gestärkt werden kann. Dieses Papier bringt drei Punkte in die Debatte ein. Erstens: Es gibt einen guten Grund, weswegen diese Absicht seit 2017 intensiv debattiert wird. Europas jüngere politische Ordnung, die Maastricht-EU, zielte auf die Überwindung von Souveränität, nicht auf deren Stärkung. In den 1990ern war dieses Ziel vielleicht plausibel. In einer Welt von Krieg und Industriepolitik, Putin und Trump ist es überholt. Ein Paradigmenwechsel ist notwendig. Souveränität liegt jenseits von Maastricht. Zweitens: Die bisherige Souveränitätsdebatte berührt wichtige Felder, würde aber von einer engeren Verbindung mit institutionellen Reformdebatten profitieren. Ohne klare Entscheidungsstrukturen führt auch eine starke materielle Basis weder zu Selbstbestimmung noch zu Sicherheit. Drittens: Eine Klärung von Entscheidungsstrukturen ist politisch herausfordernd. Um hier Fortschritte zu erzielen, liegen ehrliche Kuhhandel nahe: das Verschieben, Teilen oder Abgeben von Kompetenzen aus kalkuliertem Eigeninteresse. Solche Kuhhandel sind komplex und werden erschwert durch Vertrauensdefizite auf verschiedenen Ebenen. Zivilgesellschaft und Wissenschaft könnten einen konstruktiven Beitrag leisten, indem sie mögliche Elemente solcher Verhandlungen ausleuchten, insbesondere in Bereichen mit stabilen mitgliedsstaatlichen Präferenzen, zum Beispiel Energie, Finanzen oder Verteidigung. |
| Keywords: | Souveränität, Europa, Fiskal, Energie, Sicherheit |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:dzimps:300903 |