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on Transition Economics |
| By: | Xiaoming Li; Zheng Liu; Yuchao Peng; Zhiwei Xu |
| Abstract: | We present evidence that monetary policy easing reduces bank risk-taking but exacerbates capital misallocation in China after implementing the Basel III capital regulationsin2013. Thenewregulationstightenedbankcapitalrequirementsandintroduced a new risk-weighting approach to calculating the capital adequacy ratio (CAR). To meet tightened capital requirements, a bank can boost its effective CAR by raising capital or by increasing the share of lending to low-risk borrowers. Using confidential loan-level data from a large Chinese commercial bank, merged with firm-level data on a large set of manufacturing firms, we document robust evidence that a monetary policy expansion raises the share of new bank loans to state-owned enterprises (SOEs) after 2013, but not before, because SOE loans receive high credit ratings under government guarantees. Since SOEs are on average less productive than private firms, shifts in bank lending toward SOEs exacerbate capital misallocations, reducing aggregate productivity. We construct a two-sector general equilibrium model with bank portfolio choices and show that, under calibrated parameters, an expansionary monetary policy shock raises the share of bank lending to SOEs, leading to persistent declines in total factor productivity that partially offset the expansionary effects of monetary policy. |
| Keywords: | risk assessment; Monetary policy - China; risk management; china |
| JEL: | E52 G18 G21 O42 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:88498&r=all |
| By: | Evgeny Yakovlev (New Economic School); Margarita Khvan (New Economic School); Elizaveta Smorodenkova (New Economic School) |
| Abstract: | We assess the short-term effects of the two recent economic crises, the Great Recession and the collapse of the USSR, on the elderly mortality in Russia. According to our study, crises have led to an increase in mortality with quantitatively similar elasticities of death with respect to GDP fall for both events. Further analysis of the Great Recession suggests that income depreciation, limited access to medical services, and an increase in alcohol consumption are responsible for the rise in mortality. While increases at a higher rate compared to overall mortality, alcohol-related mortality explains a relatively small part of total mortality rise. |
| Keywords: | Mortality, health, crisis, RUSSIA, Great Recession |
| JEL: | H1 I1 J1 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:abo:neswpt:w0266&r=all |
| By: | Bachev, Hrabrin |
| Abstract: | This paper gives insight on organization, financing and productivity of agricultural research in Bulgaria during the period after country’s accession to EU. The analysis is predominately based on the research carried out in the Agricultural Academy – the main institutions responsible for the organization of agricultural research in the country. Our analysis has found out that some of the Academy institutes and stations manage significant land and other resources, but the material and technical endowments of the majority of them is outdated, while some have no "critical" mass of human, financial and material resources needed for carrying effective modern research. The number of researchers and experts employed in the Academy is constantly decreasing due to insufficient budget funding, regulatory constraints, restructuring and layoffs, lack of acceptable pay and working conditions, insufficiently qualified candidates in some areas, etc. Since country’s accession to the EU, there has been a significant reduction in the overall expenditure and budget subsidies for agrarian research institutes and centers. Despite multiple "reforms" of the agrarian research system, the country still does not have an effective structure for organization of R&D and public funding systems, coordination and evaluation of research, evaluation and stimulation of researchers and teams, and protection of intellectual agricultural property rights. The trends and problems in the development of agricultural research in universities and Bulgarian Academy of Sciences are similar to those in the Agricultural Academy. There is no aggregated information about the nature and volume of agricultural research conducted by the Bulgarian universities, institutes of the Bulgarian Academy of Sciences, and in the private sector which requires the collection of similar information in the future in order to improve analysis and management. |
| Keywords: | agrarian research, innovation, organisation, financing, efficiency, Bulgaria |
| JEL: | O3 O31 O32 O34 O38 Q1 Q16 Q18 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101231&r=all |
| By: | Le, Kien; Nguyen, My |
| Abstract: | The expropriation of agricultural land to provide new land for industrial and urban expansion, referred to as compulsory acquisition, is prevalent in developing countries. Using Vietnam as a laboratory, this study evaluates the impacts of losing farmland through compulsory acquisition on household welfare and reaches the following findings. A 10 percentage point increase in the proportion of land expropriated results in a 2.2% decrease in household welfare proxied by food expenditure. Besides, politically unconnected and ethnic minority households are disproportionately vulnerable. The adverse welfare effect could take up to 10 years to evaporate. The reduction in household welfare is attributable to the decline in agricultural income and the inability to participate in the non-agricultural labor market. Other aspects of household behavior following compulsory acquisition are also explored, such as saving, social capital, labor, and capital allocation. |
| Keywords: | Land expropriation, rural households, Vietnam |
| JEL: | J22 O12 O13 R28 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:101397&r=all |
| By: | Pawel Bukowski (LSE - London School of Economics and Political Science); Filip Novokmet (PSE - Paris School of Economics, University of Bonn, WIL - World Inequality Lab) |
| Abstract: | How has Polish inequality evolved between communism and capitalism to reach one of the highest levels in Europe today? To address this question, we construct the first consistent series on the long-term distri-bution of income in Poland by combining tax, household survey and national accounts data. We document a U-shaped evolution of inequalities from the end of the 19th century until today: (i) inequality was high before WWII; (ii) abruptly fell after the introduction of communism in 1947 and stagnated at low levels during the whole communist period; (iii) experienced a sharp rise with the return to capitalism in 1989. Between 1989 and 2015 the top 10% income share increased from 23% to 35% and the top 1% income share from 4% to 13%. We find that official survey-based measures strongly under-estimate the rise of inequality since 1989. Our new estimates show that frequently quoted Poland's transition success has largely benefited top income groups. We find that inequality was high in the first half of the 20th century due to strong concentration of capital income at the top of the distribution. The secular fall after WW2 was largely to a combination of capital income shocks fromwar destructions with communist policies both eliminating private ownership and forc-ing wage compression. The rise of inequality after the return to capitalism in the early 1990s was induced both by the rise of top labour and capital incomes. However, the strong rise in inequality in the 2000s was driven solely by the increase in top capital incomes, which is likely related to current globalization forces. Yet overall, the unique Polish inequality history speaks about the central role of policies and institutions in shaping inequality in the long run. |
| Keywords: | Communism,Capitalism,Inequality,Poland,capital income,distribution,concentration,market liberalisation,privatisation,top incomes |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02876995&r=all |
| By: | Michal Franta; Ivan Sutoris |
| Abstract: | We decompose the Czech inflation time series into the trend and short-lived deviations from the trend by means of an unobserved component stochastic volatility model. We then carry out a regression analysis to interpret the two inflation components. The results indicate a fall in the inflation trend since the start of the sample (1998) which coincides with the introduction of the inflation targeting regime and with subsequent changes to the inflation target pursued by the Czech National Bank. Moreover, the regression analysis suggests that inflation expectations play a dominant role in the evolution of the trend. The behavior of the deviations from the trend exhibits features of an open-economy Phillips curve. |
| Keywords: | Czech inflation, inflation trend, Phillips curve, UCSV |
| JEL: | E5 E31 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cnb:wpaper:2020/1&r=all |
| By: | Thomas Gries (Paderborn University) |
| Abstract: | The paper explains the growth — inequality nexus for China’s provinces. The theoretical model of provincial development consists of two regions and studies the interactions of a mutually depending development process. Due to positive externalities, incoming trade and FDI induce imitation and hence productivity growth. The regional government can influence the economy by changing international transaction costs and providing public infrastructure. Due to mobile domestic capital, disparity effects are reinforced. The implications of the theoretical model are tested. As the central intention of the paper is to explain provincial disparity we directly relate income disparity (indicated by the contribution to the per capita income Theil index) to the disparity of selected income determining factors (indicated by the contribution to every other Theil index of the determinants). We examine the determinants of income and inequality for 28 Chinese provinces over the period 1991-2004 and apply a fixed effects panel estimation. Our analysis is based on revised GDP and investment data from Hsueh and Li (1999) and various sources of Chinese official statistics provided by the National Bureau of Statistics (NBS). The results confirm the theoretical framework and suggest a direct linkage between the factors that determine regional income and regional disparity. More specific, it is apparent that trade, foreign and domestic capital and government expenditure have an impact on the provincial inequality. Moreover, it is the success of the coastal regions and hence potentially geography with the low international transaction costs that drives the provincial inequality of China. |
| Keywords: | imperfect markets; market matching; product-variety model; demand-restricted growth; semi-endogenous growth |
| JEL: | O40 E10 D33 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:ciepap:132&r=all |
| By: | Gabriel Di Bella; Oksana Dynnikova; Slavi T Slavov |
| Abstract: | The short answer: The size of the Russian State has not increased much in the last few years, but its economic footprint remains significant. Concretely, the state's size increased from about 32 percent of GDP in 2012 to 33 percent in 2016, not far from the EBRD's estimate of 35 percent for 2005-10. This is different from the mainstream narrative, which contends that the state's size doubled in the last decade. However, a deep state footprint is reflected in a relatively high state share in formal sector activity (close to 40 percent) and formal sector employment (about 50 percent). The deep footprint is also reflected in market competition and efficiency. Although sectors in which the state is present are more concentrated, concentration is large even in sectors where the state's share is low. This suggests the need to protect and promote competition, in particular in state procurement. Finally, state-owned enterprises' performance appears weaker than that of privately-owned firms, which may be subtracting from growth. |
| Keywords: | Economic growth;Social security funds;Total factor productivity;Private investments;Foreign investment;Russian State,State-Owned Enterprises,Transition Economies,state 's share,SOEs,state 's size,economic concentration |
| Date: | 2019–03–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/053&r=all |
| By: | Mariarosaria Comunale (Bank of Lithuania) |
| Abstract: | This article examines possible factors related to the rate of suicide in Lithuania, which is the highest in Europe and one of the highest worldwide. Using statistical methods, we select possible determinants from the literature in the fields of economics, psychology and sociology. We look at annual data from 1994 to 2016 for the Baltic States, with a specific focus on Lithuania. The main factors linked to suicide in the region seem to be GDP growth, demographics, alcohol consumption, psychological factors and global warming. For Lithuania in particular, other macroeconomic variables (especially linked to the labor market) may matter. The percentage of rural population does not seem to be a key robust factor. |
| Keywords: | Lithuania, suicide rates, mortality, socioeconomic factors, WALS method, Bayesian regression, elastic net |
| JEL: | I15 I31 J11 J17 O15 |
| Date: | 2020–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:lie:dpaper:21&r=all |
| By: | Ben Kelmanson; Koralai Kirabaeva; Leandro Medina; Borislava Mircheva; Jason Weiss |
| Abstract: | This paper examines the drivers, and reestimates the size of shadow economies in Europe, with a focus on the emerging economies, and recommends policies to increase formality. The size of shadow economies declined across Europe in recent years but remains significant, especially in Eastern Europe. In the emerging European economies, the key determinants of shadow economy size are regulatory quality, government effectiveness, and human capital. The paper argues that a comprehensive package of reforms, focused on country-specific drivers, is needed to successfully combat the shadow economy. The menu of policies most relevant for Europe’s emerging economies include: reducing regulatory and administrative burdens, promoting transparency and improving government effectiveness, as well as improving tax compliance, automating procedures, and promoting electronic payments. |
| Keywords: | Shadow economy;Labor market reforms;Labor force participation;Labor market regulations;Labor market policy;informal economy,WP,government effectiveness,percent of GDP,formal sector,informality,informal worker |
| Date: | 2019–12–13 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/278&r=all |