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on Transition Economics |
| By: | Linda Kadriji (South East European University, North Macedonia, Faculty of Business and Economics) |
| Abstract: | The main objective of this paper is to empirically investigate the impact of income inequality on economic growth and its determinants in transition countries (Albania, Kosovo, Serbia, Hungary, Estonia, Czech Republic, Poland, Russia, and North Macedonia) during the period 2000-2020. This research employs econometric methods, including Ordinary Least Squares (OLS) with robust standard errors, random and fixed effects models, and the Hausman-Taylor model with instrumental variables (IV). The findings from this empirical research highlight two key conclusions: first, that reducing income inequality positively influences economic growth; and second, that subsidies and transfers play a crucial role in decreasing income inequality, which in turn fosters economic growth in transition countries. |
| Keywords: | sGini index, economic growth, subsidies and transfers |
| JEL: | B41 D63 H20 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:sko:wpaper:bep-2024-04 |
| By: | Konstantinos Mavrigiannakis; Stelios Sakkas |
| Abstract: | This paper aims at assessing quantitatively the macroeconomic impact of EU sanctions against Russia for the economy of Cyprus. To this end, we use a medium-scale micro-founded DSGE model of a small open economy participating in a currency union like the euro area calibrated to the economy of Cyprus. The model features two sectors of production, namely the tradable and the non-tradable one. In this model, EU sanctions influence the sanctioning economy (i.e. Cyprus) through a mix of foreign shocks that hit in principle the tradable sector. In particular, to mimic the economic environment (namely, how all this started in 2022), we analyse first the effects of an energy-type shock modelled as a standard cost-push shock on imported goods. In turn, we add to this economic environment the impact of policy reactions like EU sanctions against Russia. In this context and given the strong trade ties of Cyprus with Russia we model sanctions as two simultaneous negative exogenous shocks, that is, a temporary decrease in the exported goods reflecting primarily reductions observed in tourism and financial services, and inward foreign direct investment (FDI). Contrary to the mild impacts reported in the literature for the majority of EU countries we find non negligible adverse effects for the economy of Cyprus which range from -1.28% to -3.36% in terms of average output loss in the short run. Given Cyprus’s vulnerable external position we show that the impact of sanctions depend crucially on the degree of tightening financing conditions which are likely to hit particularly more countries with high initial current account deficits and debt stocks. |
| Keywords: | Cyprus, economic sanctions, trade disintegration |
| Date: | 2024–09 |
| URL: | https://d.repec.org/n?u=RePEc:hel:greese:200 |
| By: | Marketa Mala (Institute of Economic Studies, Charles University, Prague, Czech Republic) |
| Abstract: | This paper explores foreign engagements of socialist enterprises in non-socialist countries during the late stage of socialism in Central Europe. It shows that, contrary to popular belief, phenomena such as Foreign Direct Investment (FDI) and Multinational Enterprises (MNEs) were relevant in the context of former socialist countries. Using Å koda Works as a case study and drawing upon previously unused archival data, this paper outlines an alternative model of international expansion of firms that prioritizes securing future export markets over the typical capitalist focus on equity and profit. This paper also highlights country-level differences of Skoda Works´ activities, the bonuses tied to export quotas and profit targets incentivizing managers to pursue foreign activities, or the considerable autonomy of the enterprise in its foreign operations despite the overarching control of the socialist state, which influenced its activities through high-level bilateral agreements, financing, and foreign exchange targets. By employing the approach of a detailed case study placed within the broader context of the era and the region, the paper contributes to a more comprehensive and nuanced understanding of the subject and it enriches the predominantly Hungaryand Poland-focused literature with insights from Czechoslovakia. Additionally, the paper contributes to the ongoing critical debate on the challenges and impacts associated with the operations of international businesses and offers valuable perspectives for future research in this area. |
| Keywords: | International Business under Socialism, Foreign Direct Investment (FDI), Socialist Multinational Enterprises (MNEs), Socialist Central Europe, Non-equity Foreign Operations, Skoda Works |
| JEL: | F23 N74 N84 P31 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:fau:wpaper:wp2024_27 |
| By: | Kosyakova, Yuliya (Institute for Employment Research (IAB), Nuremberg, Germany ; Univ. Bamberg); Brücker, Herbert (Institute for Employment Research (IAB), Nuremberg, Germany ; Humboldt-Universität zu Berlin, BIM) |
| Abstract: | "Since the onset of Russia's war against Ukraine, the number of Ukrainian nationals in Germany has risen from 156, 000 to 1, 240, 000. Although many plan to return to Ukraine after the war, the duration of the conflict is leading an increasing number of them to consider staying in Germany for an extended period or permanently. Against this backdrop, this research report simulates various scenarios of labor market integration for Ukrainian refugees, based on the employment trajectories of previous refugees and migrants from the former Soviet Union. The scenarios aim to establish realistic expectations about the progress of labor market integration for Ukrainian refugees and to quantitatively assess the impact of specific factors. However, these conditional scenarios should not be misunderstood as forecasts, as they are based on strong assumptions and do not fully control for many relevant factors. In the baseline scenario, which is based on what we believe are the most realistic assumptions regarding demographic factors, family configurations, education, language skills, and institutional and economic conditions, the average employment rate for Ukrainian refugees is projected to be 45 percent after five years and 55 percent after ten years. Gender composition and family configuration have a dampening effect on employment rates, while education level and expected language skills development have a positive impact. The comparatively poor health of Ukrainian refugees also dampens employment rates. Conversely, institutional conditions, particularly the absence of asylum procedures, have a positive impact. Economic conditions, measured by labor market tightness, also have a strong influence. The current economic downturn has a negative effect, but the picture could quickly improve with an economic recovery due to increasing labor market tension amid demographic changes, which would likely increase employment rates compared to the baseline scenario. A key finding for integration policy is that language courses not only enhance language development but also significantly boost employment rates." (Author's abstract, IAB-Doku) ((en)) |
| Keywords: | Bundesrepublik Deutschland ; Sowjetunion ; Ukraine ; Asylverfahren ; Aufenthaltsdauer ; IAB-Open-Access-Publikation ; ausländische Frauen ; IAB-BiB/FReDA-BAMF-SOEP-Befragung ; Auswirkungen ; berufliche Integration ; ausländische Männer ; Bildungsniveau ; Einwanderer ; Erwerbsquote ; Geflüchtete ; Gesundheitszustand ; Herkunftsland ; institutionelle Faktoren ; allein Erziehende ; Mütter ; IAB-SOEP-Migrationsstichprobe ; Sprachförderung ; Sprachkenntnisse ; IAB-BAMF-SOEP-Befragung von Geflüchteten ; Szenario ; 1991-2022 |
| Date: | 2024–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:iab:iabfob:202409(en) |
| By: | Ibadoghlu, Gubad |
| Abstract: | This article examines the challenges Azerbaijan faced on the Eve of COP29. Assessing the situation in Azerbaijan regarding energy, ecology, and climate finance issues, the author systematizes the critical problems to be solved in this field and draws attention to Azerbaijan's policy on the Eve of COP29. |
| Keywords: | COP29, Azerbaijan, oil, gas, energy, ecology, climate change, climate finance, green growth, environmental security |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:301995 |
| By: | Hoang, Trang (Oregon State University); Mitra, Devashish (Syracuse University); Pham, Hoang (Oregon State University) |
| Abstract: | This paper examines the impact of an export market expansion created by the US-Vietnam Bilateral Trade Agreement (BTA) on competition among manufacturing firms in Vietnam's local labor markets. Using a nonparametric production function approach, we measure distortionary wedges between equilibrium marginal revenue products of labor (MRPL) and wages. We find that the median manufacturing firm pays workers 59% of their MRPL. Following the BTA, which significantly reduced US import tariffs for Vietnamese products, firms in industries exposed more to the tariff reductions saw faster employment growth and faster declines in their MRPL-wage wedge. We find that the BTA permanently decreases labor market distortion in manufacturing by 3.4%, and the effect concentrates on domestic private firms with a magnitude of 4.9%. We exploit information on the gender composition to estimate the MRPL-wage wedges separately for men and women. We find that the median distortion is 26% higher for women relative to men, and the decline in distortion for women, amounting to more than 12%, is the driver of the overall reduction in labor market distortion attributable to the BTA. Our theory and empirics suggest that the entry of FDI firms combined with differential aggregate labor supply elasticities explains these results. |
| Keywords: | international trade, export market access, labor market distortion, misallocation, income distribution, labor share, gender inequality, monopsony, oligopsony |
| JEL: | F16 F63 O15 O24 J42 J16 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp17196 |
| By: | Váry, Miklós |
| Abstract: | This paper investigates whether there have been time periods between 1999 and 2019 in Hungary when government spending has been self-financing, i.e., when the government has faced a fiscal free lunch. By self-financing, it is meant that government spending, initially financed by issuing bonds, does not lead to an increase in the debt-to-GDP ra-tio due to improvements in the budget balance resulted in by stimulated economic activity. Some macroeconomists think that while gov-ernment spending is arguably not self-financing in normal times, it could have become self-financing in the United States (US) during the Global Financial Crisis (GFC) due to 1) stronger fiscal multipliers, 2) stronger hysteresis effects, and 3) lower interest rates than usu-ally. This paper estimates the parameters of a simple model of debt dynamics on Hungarian data to study whether these arguments also hold for an emerging small open economy, like Hungary, in which fiscal multipliers are thought to be weaker, and where interest rates in-creased during the GFC. It is found that government spending has not been self-financing in the short run before the GFC (1999Q1–2008Q3), has been at the edge of being expected to be self-financing in the long run, but has not actually turned out to be. During the GFC (2008Q4–2012Q4), it cannot be excluded to have been self-financing in the long run, and might have already been self-financing in the short run, as well. However, these findings are much less robust than those for the US. Between the GFC and the COVID recession (2013Q1–2019Q4), government spending was not self-financing in the short run, but was expected to be self-financing in the long run. |
| Keywords: | fiscal free lunch, fiscal policy, government spending multiplier, hysteresis, Hungary |
| JEL: | E12 E32 E62 H63 N14 |
| Date: | 2024–09–04 |
| URL: | https://d.repec.org/n?u=RePEc:cvh:coecwp:2024/02 |
| By: | Dagiene, Eleonora (Mykolas Romeris University); Waltman, Ludo; Dix, Guus |
| Abstract: | This mixed-methods study examines the complex interplay of actors and factors shaping research assessment policies in Lithuania in the period 1996–2008, a period of transition towards Western practices. Analysing policy documents, bibliometric data, interviews, and grey literature, we focus on the interactions between policymakers, international experts, providers of publication data, and researchers. Our findings reveal the significant influence of international networks on Lithuanian policymakers, leading to the adoption of quantitative assessment and reliance on Web of Science data. However, this narrow focus, coupled with existing power dynamics and top-down decision-making, led to unintended consequences and conflicts among disciplines, culminating in a Constitutional Court challenge. This research also highlights the substantial role of journal publishers and data providers in influencing policy shifts. We underscore the need for international organizations to adopt open data sources that encompass a wider array of scholarly outputs. Additionally, national policymakers must consider disciplinary differences and research capacity when designing assessment policies. The Lithuanian experience serves as a cautionary tale, emphasizing the importance of context-specific, inclusive, and flexible research assessment systems, particularly relevant for ongoing reforms such as the Coalition for Advancing Research Assessment (CoARA). |
| Date: | 2024–07–28 |
| URL: | https://d.repec.org/n?u=RePEc:osf:osfxxx:pqusk |