|
on Transition Economics |
| By: | Popov, Vladimir |
| Abstract: | - Is industrial policy necessary for successful development or the market “knows” better, how to allocate resources? - If industrial policy is needed, how to select industries that need to be supported? - What are the appropriate tools / instruments to support particular industries? Eastern European countries in general did not have any explicit industrial policy, neither via tax concessions and/or subsidies, nor via under/overpricing the exchange rate. Many countries of former Soviet Union carried out large import substitution programs through regulation of domestic fuel and energy prices (directly and via export tax) that subsidized all energy consumers. They also provided subsidies to agricultural enterprises. China and Vietnam (and to some extent Uzbekistan) were carrying out export oriented industrial policy mostly via underpricing the exchange rate. The paper discusses pros and cons, achievements and failures of various models of industrial policy. It is argued that export oriented industrial policy via undervaluation of the exchange rate is the best possible option to promote export oriented catch up development based on export of manufactured goods. It is especially needed for resource rich countries (Azerbaijan, Kazakhstan, Russia, Turkmenistan, Uzbekistan) that are prone to Dutch disease. Assistance to domestic producers via keeping low domestic prices for fuel and energy also helps to stimulate growth, but at a price of very high energy intensity. Industrial policy that is not targeting particular industries (general support for education, research and development and infrastructure) may be reasonable for counties at a higher level of development. |
| Keywords: | Economic growth, economic diversification, industrial policy, exchange rate policy |
| JEL: | O14 O25 O4 |
| Date: | 2019–07–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95332&r=all |
| By: | International Monetary Fund |
| Abstract: | Macroeconomic stability has been maintained with robust economic growth, declining public debt, as well as low and stable inflation. While Serbia continues to address structural challenges, supported by the Policy Coordination Instrument, more determined efforts are needed to ensure faster income convergence with the EU. |
| Date: | 2019–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/238&r=all |
| By: | Juan Carlos Cuestas |
| Abstract: | The aim of this paper is to shed some light on the degree of sustainability of fiscal debt for a group of Central and Eastern European countries. We apply a battery of time series econometrics methods to show how the financial crisis has affected the debt-to-GDP ratio and how the ratio has behaved recently. The results give us important insights into how governments in Central and Eastern Europe have reacted to the accumulation of debt. We distinguish between two groups of countries; one group where the sovereign debt stock stabilised after the crisis, and another where debt has been accumulated more quickly in recent years. The results provide important policy lessons for the authorities responsible |
| Keywords: | Central and Eastern Europe, structural breaks, European integration |
| JEL: | C22 F15 |
| Date: | 2019–01–23 |
| URL: | http://d.repec.org/n?u=RePEc:eea:boewps:wp2018-06&r=all |
| By: | International Monetary Fund |
| Abstract: | Leveraging its location and low-cost skilled labor, Slovakia has attained a very high level of integration with the global value chains, which has proved pivotal to exports growth and income convergence with the European Union. After half a decade of robust growth, the Slovak economy is decelerating. With rising trade tensions and a turning economic cycle, several vulnerabilities are coming to the fore. High dependence on exports combined with a concentrated export structure makes Slovakia particularly vulnerable to external developments. On the domestic front, a prolonged period of double-digit mortgage credit growth and declining bank profit margins have made households and the financial sector susceptible to labor and property market downturns. |
| Date: | 2019–07–12 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/220&r=all |
| By: | International Monetary Fund |
| Abstract: | The economy continued to expand rapidly in 2018, as growth surprised with a strong construction-driven upswing. Fiscal and current account deficits are at manageable levels, as is the public debt. The financial system remains stable, despite a significant balance sheet restructuring of banks servicing foreign clients. The growth outlook is favorable, but risks weigh on the downside due to a less supportive external environment. |
| Date: | 2019–08–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/264&r=all |
| By: | Chen, Xin; Qin, Yaohua; Xiao, He; Zhang, Yifei |
| Abstract: | This paper uses a quasi-natural experiment to study how houseowners’ borrowing costs were affected by the housing value fluctuation in China using a novel micro-level data from an online peer-to-peer (P2P) lending platform. The impacts on other equilibrium loan variables such as borrowing duration and numbers of lenders are also examined. By taking the housing purchase restriction policy shock as an exogenous event, we employ a difference-in-differences (DD) identification strategy. It is found that the equilibrium interest rate decreased, the growth rate of the deal completion time reduced and the number of investors went up for borrowers with house properties from the cities implementing the restriction policy. It echoes from a further triple differences (DDD) when considering city-specific effect based on samples with houseowners and non-houseowners. In addition, we estimate the heterogeneous effect for both household and city-level characteristics. Our dynamic analysis indicates that effects on houseowners’ P2P borrowing activities persist for 9 months. The channel of the effect was from the collateral effect rather than the pure wealth effect. |
| Keywords: | P2P, housing price, home-purchase restriction, collateral effect |
| JEL: | D14 G21 G28 R28 |
| Date: | 2019–07–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:95375&r=all |
| By: | Maria Laura Alzúa (CEDLAS-Facultad de Ciencias Económicas-Universidad Nacional de La Plata, Conicet, PEP); Soyolmaa Batbekh (National university of Mongolia); Altantsetseg Batchuluun (National university of Mongolia); Bayarmaa Dalkhjavd (School of Economic Studies- National university of Mongolia); José Galdo (SPPA and Department of Economics -Carleton University) |
| Abstract: | Because of its high incidence and potential threat to social cohesion, youth unemployment is a global concern. This study uses a randomized controlled trial to analyze the effectiveness of a demand-driven vocational training program for disadvantaged youth in Mongolia. Mongolia, a transitional country whose economic structure shifted from a communist, centrally planned economy to a free-market economy over a relatively short period, offers a new setting in which to test the effectiveness of standard active labor market policies. This study reports positive and statistically significant short-term effects of vocational training on monthly earnings, skills matching, and self-employment. Substantial heterogeneity emerges as relatively older, richer, and better-educated individuals drive these positive effects. A second intervention that randomly assigns participants to receive repetitive weekly newsletters with information on market returns to vocational training shows positive impacts on the length of exposure to and successful completion of the program. These positive effects, however, are only observed at the intensive margin and do not lead to higher employment or earnings outcomes. |
| JEL: | J18 J08 J24 J38 C93 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:dls:wpaper:0249&r=all |
| By: | International Monetary Fund |
| Abstract: | In recent years, the authorities have put in place a sound macroeconomic policy framework that has reduced uncertainty and helped weather external shocks. The current macroeconomic policy mix combines moderately tight monetary policy with a broadly neutral fiscal stance. The medium-term growth outlook remains modest due to structural constraints and sanctions. The authorities have implemented some politically difficult measures in the past year (pension reform and a VAT increase) and have announced plans aimed at raising productivity growth, including higher public spending on infrastructure, health, and education. To significantly increase Russia’s long-term growth prospects and reduce stagnation risks, deeper efforts are needed to address the large footprint of the state, overbearing regulation, and governance and institutional weaknesses. |
| Date: | 2019–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/260&r=all |
| By: | Yang Mestre-Zhou (MRE, Université de Montpellier) |
| Abstract: | In recent years the Chinese government has instituted a series of reforms to restructure and open the Chinese financial system. This paper studies the dynamic correlations and sensitivities between Chinese mainland stock market and five major stock markets with the multivariate t-DCC-GARCH model. We also consider a Normal-DCC model and results show that t-DCC improves slightly the results. The analysis of reforms’ effects on dynamic correlations and sensitivities prove that the Chinese mainland market is more closely tied to Asian stock markets over time, followed by the United States, and with relatively lower correlations with Europe and the United Kingdom. We highlight that the implementation of reforms changes theirs correlations and sensitivities over time. Since the reforms, the correlation between China and international stock markets has been reinforced. |
| Keywords: | DCC-GARCH, bivariate t distribution, Chinese Stock Market, Dynamic Correlation, Timevarying sensitivity, Chinese reforms |
| JEL: | C32 C58 G15 |
| Date: | 2019–08 |
| URL: | http://d.repec.org/n?u=RePEc:shr:wpaper:19-06&r=all |
| By: | Victor Lyashok (National Research University Higher School of Economics) |
| Abstract: | This paper examines the impact of the 34% increase in pensions in Russia at the end of 2009 and the beginning of 2010 on the labor market participation of pensioners. Several particular features of the pension system in Russia allow us to estimate the net effect of income from such a reform. For evaluation, we used a method combining difference-in-difference and regression discontinuity methods. The results showed that real pension growth by a third reduced labor force participation rate by 6–7.1% for men and by 6–6.4% for women. The heterogeneity of the impact of this reform was also investigated. Estimates showed that the effect was lower for more educated people or those living in villages and was completely absent among those who rated their health as poor or very bad |
| Keywords: | pension system, labor force participation, Russia, social security |
| JEL: | H55 J21 J26 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:22/psp/2019&r=all |
| By: | Latukha, M.; Shagalkina, M. |
| Abstract: | Although the problem of talent migration (brain drain) is not new and many countries, especially emerging markets, experience it currently, there is no universal remedy for solving it. Most research connect brain drain with macro-level determinants (institutional, economic, political). Little attention has been paid to firm-level talent management (TM) as a possible tool for overcoming national-level brain drain. Based on existing literature on talent migration and TM, three research questions were derived aiming at identifying factors that influence talent emigration in the Russian context and the role of TM in brain drain prevention. In order to answer the research questions, quantitative study will be conducted. The data will be collected via survey. The respondents of it are graduates of Russian Universities. Expected results imply the possible positive effect of TM development on brain drain problem at a country-level. |
| Keywords: | brain drain, student migration, labor market mobility, talent management, emerging market strategies, Russia, |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:sps:wpaper:16082&r=all |
| By: | International Monetary Fund |
| Abstract: | Rising trade tensions and volatility in emerging economies were felt in Vietnam in 2018. Nevertheless, the real economy remains resilient, the private sector-led expansion is broad-based, and inflation remains muted. The public finances are being consolidated, bank capital rules strengthened, and capital markets are deepening. Risks are related to geopolitics, trade policy uncertainty and domestic reform implementation. Longer term risks relate to aging, climate change and digitalization. |
| Date: | 2019–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/235&r=all |
| By: | International Monetary Fund |
| Abstract: | Lithuania needs sustained productivity gains to ensure higher living standards and convergence with Western Europe. This is the only way to address, or even reverse, negative demographic dynamics. Macroeconomic and financial stability is a pre-requisite for sustained growth and has been achieved through prudent policies and labor market flexibility. Nevertheless, significant and well-identified structural challenges have yet to be addressed with ambitiously designed and decisively implemented productivity-enhancing reforms. The current expansionary cyclical environment as well as strong fiscal and external positions provide an ideal opportunity to address these challenges. |
| Date: | 2019–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:19/252&r=all |
| By: | Jan Baran (Faculty of Economic Sciences, University of Warsaw) |
| Abstract: | The study offers insight into dynamics of overeducation in Poland. The share of overeducated workers among tertiary educated workers grew substantially by about 8 p.p. between 2006 and 2016. In the paper, changing overeducation risk is disentangled into age, period and cohort effects. A strong upward trend in cohort effects is identified for individuals born after 1970, but not for older generations. It suggests that overeducation is a phenomenon which affects more profoundly individuals who entered the labour market after the collapse of the communism. Moreover, the study confirms that overeducation decreases with age, which has been already a well-documented finding in the literature. |
| Keywords: | overeducation, education mismatch, tertiary education, age–period–cohort |
| JEL: | I21 J21 J24 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:war:wpaper:2019-13&r=all |