Search

Begin New Search Topic International Political Economy Political Geography Europe Content Type Working Paper

11. Estimating Demand Spillovers of EU Cohesion Policy Using European Regional Input-Output Tables

Author:
Roman Römisch
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper develops a simple method to consistently break down world input-output tables to regional input-output tables. They are used to estimate Cohesion Policy-induced demand spillovers in the EU, covering the years 2007-2018. Results indicate that Cohesion spillovers from less developed regions to other regions exceed 40% of their initial EU support in some cases. In addition, spillovers from the more developed regions are equivalent to 24% of their initial EU support. This shows that the existing trade and investment linkages across the EU regions are strong and not only run from less developed to more developed regions but also vice versa. Our results are good news for the net paying regions in the EU. Taking into account capacity growth effects, Cohesion Policy spillovers might well be a multiple of the pure demand spillovers estimated in this paper. Thus, for net paying regions, Cohesion Policy is not only an act of European solidarity but also a rational long-run economic growth policy.
Topic:
Economics, International Political Economy, International Trade and Finance, European Union, Investment, and Economic Cooperation
Political Geography:
Europe

12. The Effects of the EU Cohesion Policy on Regional Economic Growth: Using Structural Equation Modelling for Impact Assessment

Author:
Stefan Jestl, Ambre Maucorps, and Roman Römisch
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
This paper analyses the effects of the EU Cohesion Policy (CP) on the economic growth of 276 European NUTS-2 regions between 2008 and 2016. Using a structural equation model (SEM) consisting of both a measurement component (with two latent variables) and a structural component, we estimate the impact of CP funding on the growth of GDP per capita across EU regions. The estimation also enables us to predict changes in the growth of GDP per capita based on a scenario of CP funding reallocation between member states. Overcoming the limitations of traditional linear regression, SEM modelling proves to be a promising method for impact evaluation, also allowing for the inclusion of indirect causal paths and feedback loops to depict, for example, cross-border economic spillover effects.
Topic:
Economics, International Political Economy, European Union, Economic Growth, Investment, and Economic Cooperation
Political Geography:
Europe

13. Greater than the Sum of its Parts?: How does Austria Profit from a Widening Network of EU Free Trade Agreements?

Author:
Julia Grübler and Oliver Reiter
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Political debates and economic analyses often focus on single free trade agreements and their potential economic effects on participating trading partners. This study contributes to the literature by shedding light on the significance of trade agreements in the context of countries’ positions in worldwide trade agreement networks, by combining network theory with gravity trade modelling. We illustrate, both numerically and graphically, the evolution of the global web of trade agreements in general, and the network of the European Union specifically, accounting for the geographical and temporal change in the depth of agreements implemented. Gravity estimations for the period 1995-2017 distinguish the direct bilateral effects of trade agreements from indirect effects attributable to the scope of trade networks and countries’ positions therein.
Topic:
Economics, International Political Economy, International Trade and Finance, Treaties and Agreements, Profit, and Models
Political Geography:
Europe and Austria

14. Does Asymmetric Nonlinear Approach Explain the Relationship Between Exchange Rate and Trade of Iran?

Author:
Mahdi Ghodsi, Mohammad Sharif Karimi, and Robert Stehrer
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Until 2012, the Central Bank of Iran (CBI) used its policy rate to stabilise the rial’s exchange rate and, given a persistent current-account surplus, had accumulated sizeable currency reserves. In 2012, however, international sanctions against Iran intensified and the value of the rial halved against the US dollar. Since then Iran has followed a dual interest rate policy, with both a market rate and an official rate applied by the CBI to major imports. In recent years, as sanctions have cut access to foreign reserves, the gap between the two rates has widened substantially. Given these important changes in the exchange rate regime, this paper investigates the impact of the real exchange rate on the trade balance in Iran over the period 1997-2017. For this purpose, an asymmetric model is used, as the speed of the effects of changes in the exchange rate can be asymmetric. The results of the nonlinear autoregressive distributed lag model (NARDL) indicate that this is indeed the case. Results are generally consistent with the Marshall-Lerner condition: an exchange rate depreciation improves the trade balance, whereas an appreciation worsens it. However, the trade balance reacts more strongly in the short run to depreciations of the rial than to appreciations. Although the government could easily improve the trade balance in the short run through currency depreciation, policymakers should in the longer run promote non-oil exports to reduce dependency on oil and to diversify the economy.
Topic:
Economics, International Political Economy, International Trade and Finance, Exchange Rate Policy, Central Bank, and Models
Political Geography:
Europe and Iran

15. Refugees’ Integration into the Austrian Labour Market: Dynamics of Occupational Mobility and Job-Skills Mismatch

Author:
Mahdi Ghodsi and Robert Stehrer
Publication Date:
10-2020
Content Type:
Working Paper
Institution:
The Vienna Institute for International Economic Studies (WIIW)
Abstract:
Eight multilateral rounds of negotiations under the General Agreement on Tariffs and Trade (GATT) and international agreements under the World Trade Organisation (WTO) have contributed significantly to the reduction of tariffs among WTO members. However, over the years legitimate reasons for the imposition of non-tariff measures (NTMs) within regulations have triggered their extensive use. Among these measures, technical barriers to trade (TBTs) and sanitary and phytosanitary (SPS) measures allow countries to impose restrictions on the import of low-quality products suspected of harming domestic consumers’ health, plant life or the environment. Such trade policy instruments may lead to higher standards in the import market, in addition to improving market efficiency through information requirements such as mandatory labelling. This paper analyses two types of regulative and standard-like NTMs – TBTs and SPS measures – and the quality improvement of traded products that is driven by their imposition, which might be a general underlying motive for the adoption of such regulations. Based on a model framework involving both the supply and the demand side of trade and using four types of measures of these NTMs, this paper assesses the impact of TBTs and SPS measures on the quality of traded products. A dummy variable measuring the existence of these NTMs and a count variable indicating their stringency are used in the analysis. Moreover, two other variables indicate flows of NTMs imposed in each year and stocks of these NTMs accumulated over years. The results indicate that TBTs and SPS measures do indeed imply a higher quality of traded products, which is also consistent with the model when NTMs enter as a specific trade cost. Stringent TBTs with more regulations imposed in each year (i.e. flows of count TBTs) have the largest impact on the quality of traded products. However, for SPS measures only the existence of a regulation (i.e. the dummy variable on flows of SPS measures) on a traded product has the strongest impact on its quality.
Topic:
Economics, International Political Economy, International Trade and Finance, WTO, Non-Tariff Measures, and GATT
Political Geography:
Europe and Global Focus

16. Extreme weather events and economic activity: The case of low water levels on the Rhine river

Author:
Martin Ademmer, Nils Jannsen, and Saskia Mösle
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
In this paper, we exploit exogenous variation in navigability of the Rhine river to analyze the impact of weather-related supply shocks on economic activity in Germany. Our analysis shows that low water levels lead to transportation disruptions that cause a significant and economically meaningful decrease of economic activity. In a month with 30 days of low water, industrial production in Germany declines by about 1 percent, ceteris paribus. Our analysis highlights the importance of extreme weather events for business cycle analysis and contributes to gauging the costs of extreme weather events in advanced economies. Furthermore, we provide a specific example for an idiosyncratic supply shock to a small sector that amplifies to an economically meaningful effect at the macroeconomic level.
Topic:
International Political Economy, Economic Growth, Macroeconomics, Supply Chains, and Weather
Political Geography:
Europe and Germany

17. Skills in African Labor Markets and Implications for Migration to Europe

Author:
Andreas Backhaus
Publication Date:
04-2020
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper assesses the potential for skilled labor migration from sub-Saharan Africa to Europe. It utilizes representative surveys from Ghana and Kenya to shed light on the quality and distribution of skills in the labor markets of these countries. Skills in both countries are found to be unevenly distributed, with significant parts of the labor force being essentially unskilled. Similarly designed surveys from France, Germany, and the UK further allow comparing skills and formal education between the African and the European countries. On average, the labor force in the sub-Saharan African countries is less skilled and less educated than the European labor force. Importantly, even at the same levels of formal education, workers in Ghana and Kenya are substantially less skilled than workers in Europe. The paper further considers a number of hypothetical scenarios for skilled labor migration from the African to the European countries. It is demonstrated that the European countries would have to recruit workers from the very top end of the African skill distribution to match European demands for skills. In turn, the average worker from the African labor markets would fit only into the low end of the European skill distribution where employment rates are low. Hence, more regular and skilled labor migration from African countries will unlikely be a remedy for skill shortages in Europe unless migrants are positively selected on their skills. In that case, however, additional opportunities for skilled labor migration would risk a brain drain from African countries that could harm economic development there. Improving the quality of education in sub-Saharan Africa on a broad scale remains indispensable for mutually beneficial migration between Africa and Europe.
Topic:
International Political Economy, Migration, Labor Issues, Migrant Workers, and Skilled Labor
Political Geography:
Kenya, Africa, Europe, Ghana, and Sub-Saharan Africa

18. From the EMS to the EMU and...to China

Author:
Joseph Halevi
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The paper highlights the position of German authorities, showing that they were quite lucid about the fundamental weaknesses inherent in a process that separated monetary from fiscal policies by giving priority to the centralization of the former. Instead of repeating the well known critiques levelled against the EMU – for which readers are referred to the unsurpassed treatment by Stiglitz, the essay highlights the splintering of Europe in the way in which it has unfolded during the 1990s and in the first decade of the present millennium. In particular the early economic and political origins of the terminal crisis of Italy are located between the late 1980s and the 1990s. France is shown to belong increasingly to the so-called European periphery by virtue of a weakening industrial structure and persistent balance of payments deficits. The paper argues that France regains its central role by political means and through its weight as an active nuclear military power centered on maintaining its imperial interests and posture especially in Africa. The first decade of the present millennium is portrayed as the period in which a distinct German economic area had been formed in the midst of Europe with a strong drive to the east with an increasingly powerful gravitational pull towards the People’s Republic of China.
Topic:
Economics, International Political Economy, Political Economy, History, and Macroeconomics
Political Geography:
Africa, China, Europe, Asia, Germany, and Global Focus

19. Migration and Post-Conflict Reconstruction: The Effect of Returning Refugees on Export Performance in the Former Yugoslavia

Author:
Dany Bahar, Hillel Rapoport, Cem Özgüzel, and Andreas Hauptmann
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
During the early 1990s Germany offered temporary protection to over 600,000 Yugoslavian refugees fleeing war. By 2000, many had been repatriated. We exploit this natural experiment to investigate the role of migrants in post-conflict reconstruction in the former Yugoslavia, using exports as outcome. Using confidential social security data to capture intensity of refugee workers to German industries –and exogenous allocation rules for asylum seekers within Germany as instrument– we find an elasticity of exports to return migration between 0.08 to 0.24. Our results are stronger in knowledge-intensive industries and for workers in occupations intensive in analytical and managerial skills.
Topic:
Conflict Resolution, Economics, International Political Economy, Migration, Refugee Issues, Refugees, and Exports
Political Geography:
Europe, Yugoslavia, and Germany

20. The Primary Cause of European Inflation in 1500-1700: Precious Metals or Population? The English Evidence

Author:
Anthony Edo and Jacques Melitz
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We perform the first econometric test to date of the influences of inflows of precious metals and population growth on the “Great Inflation” in Europe following the discovery of the New World. The English evidence strongly supports the near-equivalent importance of both influences. For 1500-1700, silver is the only relevant precious metal in the estimates. The study controls for urbanization, government spending, mortality crises and climatic changes. The series for inflows of the precious metals into Europe from America and European mining are newly constructed based on the secondary sources.
Topic:
Economics, Government, International Political Economy, Urbanization, and Inflation
Political Geography:
Europe and England