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on Transition Economics |
| By: | Vasily B. Kashin (National Research University Higher School of Economics); Alexandra D. Yankova (National Research University Higher School of Economics) |
| Abstract: | Interregional and cross-border cooperation between Russia and China is not only an important part of bilateral interactions, but also an incentive for the accelerated development of border territories. Studying the results of Russian-Chinese cross-border cooperation over the past 30 years makes it possible to track the institutional changes of the two countries, as well as the overall dynamics of their foreign trade and investment activities. The main feature of the current state of Russian-Chinese cross-border cooperation is the gradual fading of interest in it on both sides, which is in contradiction with the growing number of state programs, framework agreements and initiatives with serious political support. In order to understand the reasons for such an imbalance, this paper consistently analyzes the main dimensions and indicators of Russian-Chinese cross-border cooperation, as well as the regulatory framework and the results of the implementation of state programs and projects. On the example of successful and failed cases, an attempt is made to identify the deep obstacles to the development of interregional cooperation at different levels and compare them with the problems that Chinese experts highlight |
| Keywords: | cross-border cooperation, regional economy, regulatory framework, local elite, Far East, Russia, China. |
| JEL: | E60 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:42/ir/2021&r= |
| By: | Beetsma, Roel M. W. J. (University of Amsterdam); Komada, Oliwia (GRAPE); Makarski, Krzysztof (Warsaw School of Economics); Tyrowicz, Joanna (University of Warsaw) |
| Abstract: | We analyze the political stability of funded social security. Using a stylized theoretical framework we study the mechanisms behind governments capturing social security assets in order to lower current taxes. The results and the driving mechanisms carry over to a fully-fledged and carefully calibrated overlapping generations model with an aging population. Funding is efficient in a Kaldor-Hicks sense. We demonstrate that, even though we can rationalize the actual introduction of a two-pillar defined-contribution scheme with funding through a majority vote, a new vote to curtail the funded pillar through asset capture or permanent diversion of contributions to the pay-as-you-go pillar always receives majority support. For those alive and thus allowed to vote, the temporary reduction in taxes outweighs the reduction in retirement benefits. This result is robust to substantial intra-cohort heterogeneity and other extensions, and only overturned with a sufficient degree of altruism. Our analysis rationalizes the experience of Central and Eastern European countries, who rolled back their funded pension pillars soon after setting them up. |
| Keywords: | social security, funding, pay-as-you-go, asset capture, majority vote, welfare |
| JEL: | H55 D72 E17 E27 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14765&r= |
| By: | Gani Ramadani (National Bank of the Republic of North Macedonia); Magdalena Petrovska (National Bank of the Republic of North Macedonia); Vesna Bucevska (Faculty of Economics, Ss Cyril and Methodius University) |
| Abstract: | Aggregate demand forecasting, also known as nowcasting when it applies to current quarter assessment, is of notable interest to policy makers. This paper concentrates on the empirical methods dealing with mixed-frequency data. In particular, it focuses on the MIDAS approach and its later extension, the Bayesian MF-VAR. The two strategies are evaluated in terms of their accuracy to nowcast Macedonian GDP growth, using same monthly frequency data set. The results of this study indicate that the MIDAS regressions demonstrate comparable forecasting performance to that of MF-VAR model. Moreover, it is interesting to note that the two approaches are reciprocal, since in general, their combined forecast demonstrates clear superiority in predicting business cycle turning points. Additionally, the MF-VAR model showed higher precision in times of increased uncertainty. |
| Keywords: | MF-VAR, Bayesian estimation, MIDAS, Forecast pooling, Forecast evaluation |
| JEL: | E37 C53 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:mae:wpaper:2021-03&r= |
| By: | Marcin Bielecki (Narodowy Bank Polski); Michał Brzoza-Brzezina (Narodowy Bank Polski); Marcin Kolasa (SGH Warsaw School of Economics) |
| Abstract: | Poland faces a particularly sharp demographic transition. The old-age dependency ratio is expected to increase from slightly above 20% in 2000 to over 60% in 2050. At the same time the country has recently witnessed a huge wave of immigration, mostly from Ukraine. In this paper we investigate how aging and migration will affect the Polish economy and what consequences these adjustments have for its monetary policy. Using a general equilibrium model with life-cycle considerations, we show that the decline in the natural rate of interest (NRI) due to demographic processes is substantial, amounting to more than 1.5 percentage points, albeit spread over a period of 40 years. The impact of migration flows is relatively small and cannot significantly alleviate the downward pressure on the NRI induced by populating aging. If the central bank is slow in learning about the declining NRI, an extended period of inflation running below the target is likely. In this case, the probability of hitting the zero lower bound (ZLB) becomes a major constraint on monetary policy while it could remain under control if the central bank uses demographic trends to update the NRI estimates in real time. |
| Keywords: | aging, monetary policy, migration, life-cycle models |
| JEL: | E43 E52 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:341&r= |
| By: | Michela Giorcelli; Bo Li |
| Abstract: | This paper studies the causal effect of technology and knowledge transfers on early industrial development. Between 1950 and 1957, the Soviet Union supported the “156 Projects” in China for the construction of technologically advanced, large-scale, capital-intensive industrial facilities. We exploit idiosyncratic delays in project completion and the unexpected end of the Sino-Soviet Alliance, due to which some projects received Soviet technology embedded in capital goods and know-how, while others were eventually realized by China alone using domestic technology. We find that receiving both Soviet technology and know-how had large, persistent effects on plant performance, while the effects of receiving only Soviet capital goods were short-lived. The intervention generated horizontal and vertical spillovers, as well as production reallocation from state-owned to privately owned companies since the late 1990s. |
| JEL: | L2 M2 N34 N64 O32 O33 |
| Date: | 2021–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:29455&r= |
| By: | OECD |
| Abstract: | This paper explores the role of social vouchers as a tool for social inclusion and local development. It presents a typology of vouchers and their objectives, governing institutional and regulatory frameworks, use by national and local governments, and the social economy (Section1). It analyses the challenges and opportunities for the development of vouchers in light of the COVID-19 crisis and suggests recommendations to effectively capitalise on social vouchers as a tool to “build back better” (Section 2). Finally, it illustrates and analyses specific cases in Belgium, Brazil, the Czech Republic, France, Mexico, Morocco and Romania (Section 3). |
| Keywords: | culture, local development, social economy, social vouchers, target spending consumption |
| JEL: | D31 I38 D61 E21 E26 |
| Date: | 2021–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:cfeaaa:2021/08-en&r= |
| By: | Krzysztof Kruszewski (Narodowy Bank Polski); Mikołaj Szadkowski (Narodowy Bank Polski, Warsaw School of Economics) |
| Abstract: | This paper presents an analysis of the impact of the central bank’s financial result and its components on the inter-sectoral transfers of benefits and the creation of central bank money. Transfers of benefits depend on the structure of the central bank’s balance sheet and its financial result. The structure of its balance sheet, its financial result as well as profit distribution influence central bank money creation. If the central bank records a profit, fully transferred to the state budget, and its assets are mainly denominated in domestic currency, then the central bank’s financial result can be seen only as a tool for intermediation in the transfer of benefits between different sectors of the national economy. In such a situation, the bank’s financial result does not affect the volume of the central bank’s money. On the other hand, if the central bank records a profit, fully paid to the state budget, and its assets are mainly denominated in foreign currency, then there is a transfer from foreign entities to the domestic economy, and there is simultaneously an increase in central bank money volume. However, if the central bank incurs a loss and the loss is not covered, for example, by the government, then the central bank transfers benefits directly from itself to other sectors of the economy, and regardless of the structure of its balance sheet, there is an increase in the central bank’s money issuance. |
| Keywords: | central bank, financial result, balance sheet, transfers between sectors of the economy |
| JEL: | E51 E58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:nbp:nbpmis:340&r= |
| By: | Madoń, Karol (Institute for Structural Research (IBS)); Magda, Iga (Warsaw School of Economics); Palczyńska, Marta (Institute for Structural Research (IBS)); Smoter, Mateusz (Institute for Structural Research (IBS)) |
| Abstract: | This paper compares the relative effectiveness of selected active labour market policies available to young unemployed people in Poland over the 2015-2016 period. We use rich administrative data and propensity score matching techniques to control for the non-random selection of unemployed individuals into alternative interventions. We find large negative employment effects of participating in public works programmes, particularly among disadvantaged individuals. The differences in effectiveness between other interventions are rather small, and most become insignificant over time. We also show that vouchers that allow unemployed individuals find on-the-job training providers themselves are more effective than on-the-job training schemes in which the unemployed individuals are directed to the training providers by the public employment services (PES). |
| Keywords: | youth unemployment, ALMP, Youth Guarantee, wage subsidies, public works, training vouchers |
| JEL: | J08 J64 J68 |
| Date: | 2021–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14793&r= |
| By: | Guglielmo Maria Caporale; Luis A. Gil-Alana; Pablo Vicente Trejo |
| Abstract: | This paper investigates unemployment persistence in the 27 EU member states by applying fractional integration methods to quarterly data (both seasonally adjusted and unadjusted) from 2000q1 to 2020q4. The obtained evidence points to high levels of persistence in all cases. With seasonally adjusted data, a small degree of mean reversion is found in the case of Belgium, Luxembourg and Malta, but this evidence disappears under the assumption of weakly correlated disturbances. More cases of mean reversion are found instead when analysing the unadjusted series. In particular, countries such as Belgium, France, Croatia, Italy, Luxembourg and Malta display orders of integration significantly lower than 1. In addition, significant negative time trends are found in the case of Bulgaria, Croatia, Malta and Romania, and a positive one for Luxembourg. Finally, the Covid-19 pandemic had mixed effects, with (seasonal) persistence increasing in some countries whilst decreasing in others and not changing in a minority of cases. On the whole, our results support the hysteresis hypothesis for the European economies. |
| Keywords: | unemployment persistence, long memory, Europe, fractional integration |
| JEL: | C22 E24 O52 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9392&r= |