Financial balances of the private, foreign and public sectors: long-term tendencies for the European Union (by Roman Römisch; pp. 1-6) Keywords: fiscal policy, budget deficits, investments and savings, public-private balances Countries covered: European Union Topics: Macroeconomic Analysis and Policy Labour hoarding during the crisis: Evidence for selected new member states from the Financial Crisis Survey (by Sandra M. Leitner and Robert Stehrer; pp. 7-13) Keywords: labour hoarding, financial crisis, firm-level analysis Countries covered: Bulgaria, Hungary, Latvia, Lithuania, ...more

(Reprint from: WIFO-Monatsberichte, Vol. 85, No. 5, May 2012) Zusammenfassung Die gegenwärtige Wirtschaftskrise weist alle jene Merkmale auf, die mit finanziellen, verschuldungsbezogenen und strukturellen Aspekten von Leistungsbilanzkrisen verbunden werden. Daraus ergeben sich dauerhaft dämpfende Effekte für die Entwicklung der Gesamtnachfrage in den mittel-, ost- und südosteuropäischen Ländern, sodass sich eine nachhaltige Erholung verzögert. Die vorübergehende Belebung 2010/11 war insbesondere vom Export getragen. Deutliche Entwicklungsunterschiede zwischen den einzelnen Ländern Ostmitte...more

For the CESEE countries, wiiw expects 2012 to be a rather disappointing year. GDP growth will be rather slow – at least when judged by the past standards and the ambitions harboured only a few years ago. Some countries (Czech Republic, Hungary, Slovenia, Bosnia and Herzegovina, Serbia) will suffer a mild recession or come close to it (Bulgaria, Romania, Montenegro). 2013 will be characterized by external imbalances developing anew in some countries, although these are not expected to culminate in a repetition of precipitate and disorderly rebalancing crises. The imbalances, if allowed to widen, may come to a sticky end later. The fiscal consolidation in many CESEE countries is pursued despite the revealed weakness of private consumption and investment, amid signs of flagging demand for CESEE exports....more

Following the conclusion of the TRIPS Agreement, much has been written on the potential costs and benefits of stronger Intellectual Property Rights (IPRs) protection in terms of its impact on innovation and technology transfer, as well as economic growth and welfare. This paper documents the development of IPR regimes within countries and internationally, before surveying the theoretical and empirical literature linking the protection of IPRs to economic growth, innovation and technology diffusion....more

During economic downturns, labour hoarding becomes an attractive human resource strategy if sizeable search and training costs render hiring and training new workers too costly. The paper sheds light on the prevalence and extent of labour hoarding in five New EU Member States and Turkey during the global financial crisis, which spread quickly like wildfire after the bankruptcy of Lehman Brothers in September 2008. It applies a unique firm-level panel, constructed by merging the World Bank Financial Crisis Survey (FCS) with the Business Environment and Enterprise Performance survey (BEEPs) and ...more

The transformation of international financial markets and the future of the eurozone (by John Eatwell; pp. 1-6) Keywords: Financial Markets, euro, Debt Crisis Countries covered: European Union Topics: Macroeconomic Analysis and Policy The harmonisation of banking supervision: a chokehold (by Tomasz Chmielewski and Andrzej Slawinski; pp. 7-9) Keywords: Banking Supervision, Harmonisation Countries covered: European Union Topics: Macroeconomic Analysis and Policy The impact of offshoring on the skill structure of labour demand (by Neil Foster and Robert Stehrer; pp. ...more

Interim Romanian government sworn in: any room for manoeuvring? (by Gábor Hunya; pp. 1-4) Keywords: Elections, Fiscal policy Countries covered: Romania Topics: Macroeconomic Analysis and Policy Croatia's EU membership: lessons from earlier accessions (by Hermine Vidovic; pp. 5 7) Keywords: Integration, EU Countries covered: Croatia Topics: Macroeconomic Analysis and Policy The cold civil war in Poland (by Kazimierz Laski and Leon Podkaminer; pp. 8-10) Keywords: Internal politics, Fiscal and Social Policy Countries covered: Poland Topics: Macroeconomic Analysis and Po...more

Technology is a key element for long-term growth and economic development. Given the stark concentration of innovation activities in a few countries most countries have to rely on the international diffusion of newly developed technologies. Some countries may fail to successfully perform the task of technology adaption leading to a tripartite segmentation of countries into an innovation club, an imitation club whose members are capable of absorbing technologies developed by the former and a stagnation group that lack the capability to absorb foreign technologies. We test the role of the techno...more

Slovakia after the elections (by Doris Hanzl-Weiss; pp. 1-3) Keywords: Elections, Fiscal policy Countries covered: Slovakia Topics: Macroeconomic Analysis and Policy Labour market issues in Europe’s Eastern and Western Balkan neighbours (by Hermine Vidovic; pp. 4-9) Keywords: Labour market, Unemployment Countries covered: SEE, CIS Topics: Labour, Migration and Income Distribution Net private savings in relation to the government’s financial balance (by Kazimierz Laski and Leon Podkaminer; pp. 10-13) Keywords: Saving, Investment, Financial balances, Fiscal policy Count...more

The European Union and the MENA countries: fostering North-South economic integration (by Sándor Richter; pp. 1-5) Keywords: North-South, economic integration Countries covered: European Union, MENA Topics: Labour, Migration and Income Distribution Europe's position in trade in knowledge-intensive business services (by Joseph Francois and Olga Pindyuk; pp. 6-12) Keywords: trade, knowledge-intensive business services Countries covered: European Union, OECD, East Asia Topics: International Trade, Competitiveness and FDI What kind of socio-economic order do we need in Euro...more

Main messages: Differentiated economic development in CESEE countries Strength/weakness of export sector is crucial External demand and deleveraging depress domestic demand Labour market problems increase SEE: Persistent solvency and liquidity problems Growth remains below potential absent external and policy improvements ...more

Main messages: Differentiated economic development in CESEE countries Strength/weakness of export sector is crucial External demand and deleveraging depress domestic demand Labour market problems increase SEE: Persistent solvency and liquidity problems Growth remains below potential absent external and policy improvements ...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Fasting or Feasting? Europe - Old and New - at the Crossroads, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. For the CESEE countries, wiiw expects 2012 to be a rather disappointing year. GDP growth will be rather slow – at least when judged by the past standards and the ambitions harboured only a few years ago. Some countries (Czech Republic, Hungary, Slovenia, Bosnia and Herzego...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Fasting or Feasting? Europe - Old and New - at the Crossroads, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. For the CESEE countries, wiiw expects 2012 to be a rather disappointing year. GDP growth will be rather slow – at least when judged by the past standards and the ambitions harboured only a few years ago. Some countries (Czech Republic, Hungary, Slovenia, Bosnia and Herzego...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled New Divide(s) in Europe?, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. The present economic crisis bears all the familiar hallmarks of the financial, debt-related and structural aspects of current account crises. All these aspects have lasting level effects and recovery can be very protracted. Export-led growth was an important feature of the recovery period 2010-2011, yet signi...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Recovery: Limp and Battered, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. In 2011 the recovery will encompass all countries in the CESEE region – even the laggards that did not grow in 2010. However GDP growth will not accelerate much in countries where the recession ended already in 2010. Later on, GDP growth rates will stabilize throughout the whole region at around 4 to 5 pe...more

In a special chapter ("Debt dynamics, flow of funds and deleveraging") of the wiiw Forecast "Recovery: Limp and Battered", the debt developments of the private (households, corporate) and public sectors before and after the start of the financial crisis are examined and compared with those in the GIPS countries (Greece, Ireland, Portugal, Spain). The burden of the build-up of private sector debt before the crisis has important consequences for spending and savings behaviour of households and enterprises and hence for the development of domestic demand (consumption and investment). In this resp...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Recovery: Limp and Battered, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. In 2011 the recovery will encompass all countries in the CESEE region – even the laggards that did not grow in 2010. However GDP growth will not accelerate much in countries where the recession ended already in 2010. Later on, GDP growth rates will stabilize throughout the whole region at around 4 to 5 pe...more

In einem speziellen Kapitel („Debt dynamics, flow of funds and deleveraging“) des Konjunkturberichtes "Recovery: Limp and Battered" wird die Verschuldungsdynamik nach Sektoren (Haushalte, Unternehmen, Staat) vor und nach dem Ausbruch der Finanzkrise untersucht und mit den GIPS-Ländern (Griechenland, Irland, Portugal, Spanien) verglichen. Die Last der privaten Verschuldung hat wichtige Konsequenzen für das Ausgaben- und Sparverhalten des Haushalts- und Unternehmenssektors und damit für die Entwicklung der Inlandsnachfrage (Konsum und Investitionen). Dabei zeigen sich sehr unterschiedliche Muste...more

The free movement of persons is a fundamental right guaranteed to European Union (EU) citizens which is about to change not only the size of migration flows but also the behavior of migrants regarding the duration of stay. In our empirical analysis we show that migrants who intend to live only temporary in Germany are more likely to remit a higher amount of money. As we have seen in the UK, strong remittances flows provoke fears among natives of a loss in domestic purchasing power. Using a general equilibrium model with altruistic households and imperfect labor markets, we show that Germany wi...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Recovery – in Low Gear across Tough Terrain, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe. All Central, East and Southeast European (CESEE) countries will return to growth in 2011. The post-crisis GDP growth will be slower than before and not suffice to generate additional jobs. The role of external demand gradually weakens, while both household consumption and gross fixed inves...more

The Vienna Institute for International Economic Studies (wiiw) has just published its latest Analyses and Forecasts. The report, titled Will exports prevail over austerity?, analyses current economic situation and medium-term forecast for the countries of Central, East and Southeast Europe, and China The Central, East and Southeast European (CESEE) economies will experience on average a minor rebound of economic growth to 1% in 2010 which will speed up to 2.5% in 2011 and 3.5% in 2012. GDP growth will be higher in the CIS countries and in Turkey, about average in the Central European N...more

Bart Los, University of Groningen, Groningen Growth and Development Centre R&D activities by one industry can have positive effects on the productivity performance of other industries, as a consequence of technology spillovers. As revealed by Wolfgang Keller in the late 1990s, severe multicollinearity problems have precluded the identification of industries that have generated the most productive technology spillovers, despite a number of sophisticated attempts. Consequently, we do not know which industries should be targeted for technology policy. This paper proposes an alternative estimat...more

Doris A. Oberdabernig, University of Innsbruck The focus of this work is to measure the effects of Structural Adjustment Programmes (SAPs) of the International Monetary Fund (IMF) on poverty and income distribution. This study tries to estimate the impacts of SAPs on a variety of poverty indicators controlling for nonrandom selection. We make use of the matching method to test for differences in poverty indicators and GINI coefficients for countries participating in IMF agreements and countries which do not. Performing Heckman regressions we study the effects in more detail. We control for ...more

Cyrille Schwellnus, OECD (with Jens Arnold) This paper uses a stratified sample of firms across Western Europe over the period 1996-2004 to test for the existence of a link between corporate taxation and productivity. Corporate taxes may reduce incentives for productivity-enhancing innovations by reducing their post-tax returns, and may reduce incentives for risk taking by firms. In addition, corporate taxes can increase the user cost of capital and reduce incentives to invest in physical capital, which may affect productivity through technological progress embodied in new physical capital...more

Christian Busch ETH Zurich This paper investigates the contributions of institutions and export concentration in determining aggregate volatility. Geographically disadvantaged countries often experience a concentrated export structure which makes them more vulnerable to external shocks. Based on a gravity regression, a measure of export concentration is constructed which is based entirely on geographical characteristics. However, since export concentration ratios are not additively separable across countries we use an inequality decomposition method in order to obtain an aggregate measure o...more

Octavio Fernández Amador (with Jesús Crespo Cuaresma) University of Innsbruck We analyse the dynamics of the standard deviation of business cycles across euro area countries in order to evaluate the patterns of cyclical convergence in the European Monetary Union (EMU) for the period 1960-2008. Based on SVAR models à la Blanchard and Quah (1989), we study the pattern of cyclical synchronization by applying the methodology put forward by Crespo-Cuaresma and Fernández-Amador (2009), which makes use of sigma-convergence methods to identify synchronization patterns in business cycle data. This a...more

Christian Hepenstrick, University of Zurich (UZH) This paper develops a Ricardian trade model that accounts for the empirically observed positive relation between the extensive margin of a bilateral trade flow (measured as the number of goods categories with positive volumes) and the per-capita incomes of the trading partners. The central mechanism is that richer agents consume a wider set of varieties, which leads to a positive relation between per-capita income of the importer and the extensive margin. The positive effect of exporter per-capita income, corresponding to the standard model,...more

Alex Mourmouras, IMF (with Steven H. Russell) Seminar organized in cooperation with the Joint Vienna Institute We study a simple neoclassical model of investment in a developing country, modified to allow for long-term projects and short-term debt. Early signals indicating low productivity of investment may lead creditors to call loans in early. In such a crisis, firms protected by limited liability default and liquidate capital, even though they do so at a loss (a "fire sale"). We show that short-term debt financing is beneficial in good (normal) times: when there is no adverse signal, ...more