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162. The War in Ukraine: The Challenge of Shaping an Endgame
- Author:
- Udi Dekel
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- Although nearly three weeks have passed since Putin invaded Ukraine, there is no framework for an endgame on the horizon. While the United States and the West would like to bring Putin to his knees as he sinks deeper in the Ukrainian mud, Washington must recognize that the longer the war continues, the chances increase for escalation to new levels that neither side wants. Therefore, before the situation is completely out of control, there must be a dialogue with Russia that can lead to an end to the war.
- Topic:
- Diplomacy, Military Strategy, Conflict, Peace, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
163. Is Ukraine Poised to Join NATO and the European Union?
- Author:
- Oden Eran and Shimon Stein
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- Following the Russian invasion of Ukraine, there are more and more voices in the West calling for Kiev’s acceptance into NATO and the European Union. However, this is not the time for rapid measures. Now that Putin has backed himself int a corner, the United States and Europe, in parallel with the harsh sanctions imposed on Russia and the assistance to Ukraine, must leave Moscow a way out
- Topic:
- Defense Policy, NATO, International Cooperation, and European Union
- Political Geography:
- Europe, Ukraine, and North America
164. Putin’s Dilemma
- Author:
- Ofer Shelah
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- After more than two weeks of war in Ukraine, initial conclusions can already be drawn. Chief among these is the realization that force application in complicated conditions can confront a decision maker with a serious dilemma, in which precisely a military achievement may destroy any possibility of scoring a political achievement
- Topic:
- Military Strategy, Leadership, Conflict, and Russia-Ukraine War
- Political Geography:
- Russia and Europe
165. Germany and the Ukraine Crisis: End of the Age of Illusions
- Author:
- Shimon Stein
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- Russia’s invasion of Ukraine has sent shockwaves through Germany’s political-security approach of the last decades, and recent speeches in the Bundestag reflect the government’s intention to make system-wide changes in security orientation. Germany must also understand how it missed warning signs from Russia over the years, and formulate a clear policy that addresses the emerging worrisome trends
- Topic:
- Security, Conflict, Strategic Interests, and Russia-Ukraine War
- Political Geography:
- Europe, Ukraine, and Germany
166. The Russian Invasion of Ukraine: Legal Aspects
- Author:
- Pnina Sharvit Baruch and Ori Beeri
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- Since Russia invaded Ukraine, it has been the object of significant legal pressure. While the various legal measures have no power to stop the bloody war, they deliver a powerful, unequivocal message: any state that flagrantly violates international world and undermines the world order will suffer isolation, condemnation, sanction, and criminal investigations. Israel, which has seemed to lean to sitting on the fence, must join the international efforts against Russia, Otherwise it is liable to find itself on the wrong side of history
- Topic:
- Military Strategy, Law, Conflict, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
167. The Ukraine Crisis: An Interim Analysis
- Author:
- Eldad Shavit, Zvi Magen, and Shimon Stein
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Institute for National Security Studies (INSS)
- Abstract:
- Although Russia’s invasion of Ukraine began only days ago, it is already clear that with this belligerence Putin has upset the world order that has existed since the Second World War. The Western bloc has already begun to realign and is presenting a unified and forceful stance vis-à-vis Moscow. Israel can no longer avoid taking a clear stand and siding fully with the countries opposing Russia
- Topic:
- Military Strategy, Conflict, Strategic Interests, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
168. FDI Spillover Effects on Innovation Activities of Knowledge-using and Knowledge-creating Firms: Evidence from an Emerging Economy
- Author:
- Iraj Hashi, Mehtap Hisarciklilar, Slavo Radošević, Nebojša Stojčić, and Nina Vujanović
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- The beneficial effects of innovation for firms’ performance and competitiveness are well documented, but it has been suggested in recent years that innovation regimes differ between advanced and emerging economies. While advanced economies rely on knowledge generation, their emerging counterparts follow mainly a knowledge-use regime through the application of existing knowledge and technology. Climbing up the technological ladder can be helped through spillovers from foreign investors to local firms. We investigate whether FDI spillovers influence different phases of the innovation process (from decision to innovate to productivity) among knowledge-using and knowledge-creating firms in an emerging European economy. The results show that the innovation process in emerging economies is closer to the imitation than the creation of novel products. Local firms benefit from foreign counterparts in the early phase of the innovation process. Stronger FDI effects are found among firms that undertake innovation through knowledge use rather than through knowledge generation.
- Topic:
- Emerging Markets, International Trade and Finance, Foreign Direct Investment, Economy, Investment, and Knowledge Systems
- Political Geography:
- Europe
169. Industrial Robots, and Information and Communication Technology: The Employment Effects in EU Labour Markets
- Author:
- Stefan Jestl
- Publication Date:
- 06-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper explores the effects of industrial robots and information and communication technology (ICT) on regional employment in EU countries. The empirical analysis relies on a harmonised comprehensive regional dataset, which combines business statistics and national and regional accounts data. This rich dataset enables us to provide detailed insights into the employment effects of automation and computerisation in EU regions for the period 2001-2016. The results suggest relatively weak effects on regional total employment dynamics. However, employment effects differ between manufacturing and non-manufacturing industries. Industrial robots show negative employment effects in local manufacturing industries, but positive employment effects in local non-manufacturing industries. While the negative effect is concentrated in particular local manufacturing industries, the positive effect operates in local service industries. IT investments show positive employment effects only in local manufacturing industries, while CT investments are shown to be irrelevant for employment dynamics. In contrast, software and database investments have had a predominantly negative impact on local employment in both local manufacturing and non-manufacturing industries.
- Topic:
- Labor Issues, European Union, Employment, Industry, Robotics, and Labor Market
- Political Geography:
- Europe
170. Does my Computer Protect me from Burnout? Cross-country Evidence on the Impact of ICT use within the Job Demands-Resources Model
- Author:
- Sandra Leitner and Roman Stöllinger
- Publication Date:
- 06-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper uses a large sample of employees from 35 European countries to study the direct and indirect effects of ICT use on burnout and work engagement as two opposite poles of employee psychological health, where the former comprises the three dimensions of exhaustion, cynicism and professional efficacy. It applies the Job Demands-Resources (JD-R) model and analyses the mediating role of three job demands (work extensity, work intensity, social demands) and four job resources (social support from management or colleagues, job control, rewards) on workers’ psychological health. It accounts for the importance of the place of work for the effect of ICT use on workers’ psychological health by differentiating between four types of workers: home-based workers, highly mobile workers, occasionally mobile workers, and workers who always work at the employer’s premises. The results show that ICT use is associated with lower levels of exhaustion but is unrelated to work engagement. Furthermore, work intensity, work extensity, social demands and rewards mediate the effect of ICT use on exhaustion, while job control and rewards mediate the effect of ICT use on work engagement. Our multi-group analysis attributes the negative effect of ICT use on exhaustion mainly to occasionally mobile workers and to workers who always work at the employer’s premises and highlights that the factors that mediate the effect of ICT use on workers’ psychological health differ across the four types of workers. Home-based workers stand out in two important respects: first, ICT use per se is unrelated to burnout; second, only one factor – work intensity – mediates the effect of ICT use on burnout, but its effect is especially strong.
- Topic:
- Labor Issues, Work Culture, Engagement, Computers, and Burnout
- Political Geography:
- Europe
171. Comparative Advantages in the Digital Era – A Heckscher-Ohlin-Vanek Approach
- Author:
- Dario Guarascio and Roman Stöllinger
- Publication Date:
- 07-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper revisits the Heckscher-Ohlin-Vanek (HOV) theorem and investigates its fit for digital tasks and ICT capital, which both represent endowment factors that are expected to shape the digital transformation. We use a theory-consistent methodology for calculating the measured net factor content of trade (Trefler and Zhu, 2010) and apply it to a unique dataset on digital and non-digital tasks performed in detailed occupations, as well as recent data on ICT capital stocks. Equipped with these data we provide new evidence on the factor-based trade patterns for 25 EU countries and use it to test the HOV theorem. Overall, the performance of the sign test and the rank test is good if not impressive. In 83% of the cases countries are net exporters of those factors with which they are abundantly endowed, with a higher score achieved for digital tasks than for ICT capital. We conclude that the fit of the HOV theorem for highly relevant endowments of the digital era is as good as that of traditional endowment factors.
- Topic:
- European Union, Business, Trade, and Digital Transition
- Political Geography:
- Europe
172. The Impact of ICT and Intangible Capital Accumulation on Labour Demand Growth and Functional Income Shares
- Author:
- Robert Stehrer
- Publication Date:
- 07-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper investigates whether the diffusion of tangible IT and CT capital and intangible capital asset types has an impact on labour demand growth and the share of labour income in total income at the industry and country level. The econometric analysis is derived from a Cobb-Douglas production function taking empirical stylized facts into account. The effects of technical progress embodied in the various forms of capital impact along inter-industry and intercountry production linkages, which are considered by using global value chain indicators. The analysis is broken down to examine the influence on different types of labour, including the dimensions of gender, age, and educational attainment. Accumulation of ICT assets have generally insignificant and in some cases small positive effects on labour demand and income shares, though patterns differ across types of labour. Intangible assets show a positive relation with respect to labour demand growth.
- Topic:
- Labor Issues, European Union, Capital, Income, and Capital Accumulation
- Political Geography:
- Europe
173. Salmonella Program in the European Union and the Trade Dispute with Brazil at the World Trade Organisation: A Partial Equilibrium Framework
- Author:
- Mahdi Ghodsi
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This contribution provides a cost-benefit analysis in a partial equilibrium framework to investigate the welfare consequences of a prohibitive regulatory non-tariff measure (NTM) in the form of a sanitary and phytosanitary (SPS) measure aimed at a foreign product with perceived negative characteristics. Two groups of consumers are distinguished: one that is indifferent to the foreign product’s negative attributes, and another that is concerned about them. Different scenarios concerning the welfare gains from the introduction of an NTM are explored. The results depend on consumer awareness and information policies pursued by the government of the importing country or group of countries. The theoretical model is illustrated with data on the production and importation of prepared poultry in the EU. This paper focusses on the recent Dispute Settlement (DS) case 607 at the World Trade Organization (WTO) that was initiated by Brazil in November 2021 to consult with the EU on restrictive measures imposed on the importation of prepared and preserved poultry. These restrictions are in line with the comprehensive and restrictive programme legislated by the EU to combat salmonella spp. The findings suggest that the consumer surplus may be reduced after the imposition of prohibitive SPS measures because the market structure changes from a duopoly to a monopoly. However, when the perceived harm of the bad product increases and the portion of the concerned population in society regarding the bad product increases, the change in the consumer surplus also increases.
- Topic:
- World Trade Organization, European Union, Welfare, Trade Policy, and Disputes
- Political Geography:
- Europe, Brazil, and South America
174. The Cyclical Behaviour of Fiscal Policy During the Covid-19 Crisis
- Author:
- Philipp Heimberger
- Publication Date:
- 09-2022
- Content Type:
- Working Paper
- Institution:
- The Vienna Institute for International Economic Studies (WIIW)
- Abstract:
- This paper analyses the cyclicality of fiscal policy (discretionary versus automatic) for 28 advanced economies over 1995-2021 by paying special attention to the Covid-19 crisis. We find evidence that discretionary fiscal policy during the Covid-19 crisis (2020-2021) was significantly more countercyclical than before – in particular in the Eurozone. We do not find comparable evidence for more counter-cyclicality during the financial crisis or Euro crisis, which lends support to the argument that discretionary fiscal policy responded especially forceful to stabilise the economy during the Covid-19 crisis. Furthermore, automatic fiscal stabilisers contributed significantly to counter-cyclical stabilisation, although their performance over 2020-2021 was more in line with the past than for discretionary fiscal policy. Overall, fiscal policy in non-Eurozone advanced countries is more countercyclical than in the Eurozone. However, the cyclicality varies markedly across countries. Our findings shed light on how the cyclical behaviour of fiscal policy varies across countries and time.
- Topic:
- Financial Crisis, European Union, Fiscal Policy, and COVID-19
- Political Geography:
- Europe
175. German Economy Summer 2022: Slowly progressing recovery
- Author:
- Jens Boysen-Hogrefe, Nils Jannsen, Saskia Meuchelbock, Dominik Groll, Stefan Kooths, and Nils Sonnenberg
- Publication Date:
- 06-2022
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- The German economy navigates troubled waters. The catch-up process in the contact-intensive service industries is continuing at a fast pace and companies in the manufacturing sector are sitting on well-filled order books. However, high inflation is reducing the purchasing power of disposable incomes and thus dampening the recovery in consumption. In addition, supply bottlenecks have recently worsened again due to the war in Ukraine. As a result, the recovery will regain strength only in the second half of the year, when prices will no longer rise as rapidly and supply bottlenecks will begin to ease. Overall, we expect GDP to increase by 2.1 percent this year, as in our spring forecast. In 2023, GDP will grow by 3.3 percent (spring forecast: 3.5 percent). At 7.4 percent, inflation in the current year will be higher than ever before in reunified Germany. Next year, inflation will probably remain high with 4.2 percent. The recovery in employment continues. Effective earnings will rise strongly, also because labor shortages have reached an all-time high. In the current year, however, the increase of about 5 percent will lag behind the rate of inflation. Public budget deficits will decline as revenues increase strongly and pandemic-related expenditures are reduced. In 2023, public debt in relation to GDP is expected to be slightly above 60 percent.
- Topic:
- Economics, GDP, Inflation, and Russia-Ukraine War
- Political Geography:
- Europe and Germany
176. German Economy Spring 2022: Recovery at risk – Soaring Inflation
- Author:
- Jens Boysen-Hogrefe, Nils Jannsen, Saskia Meuchelbock, Jan Reents, Dominik Groll, Stefan Kooths, Martin Ademmer, and Nils Sonnenberg
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- The German economy is once again facing strong headwinds. The war in Ukraine is leading to rising commodity prices, new supply bottlenecks and dwindling sales opportunities. These factors will affect the German economy in different ways. Higher commodity prices reduce the purchasing power of disposable incomes and thus dampen private consumption. Moreover, new supply bottlenecks will dampen industrial production in the coming months. Finally, sales opportunities will deteriorate at least temporarily due to the sanctions and the increased uncertainty caused by the war. All this is hitting the economy in a phase in which the dampening effects of the pandemic are fading out and a strong recovery has begun to emerge. The dampening factors are cushioned because private households have accumulated large amounts of extra savings since the beginning of the pandemic, so that high inflation does not fully impact private consumption. In addition, industrial firms have an unusually high stock of orders, which will cushion the temporarily lower sales opportunities. As a result, the recovery is likely to continue this year, albeit at a noticeably slower pace than expected in winter. Overall, we now expect GDP to rise by 2.1 percent in this year (winter forecast: 4 percent) and by 3.5 percent in 2023 (winter forecast: 3.3 percent). With 5.8 percent inflation is likely to be higher this year than ever before in reunified Germany. Even if commodity prices stop rising and supply bottlenecks gradually ease, inflation is still likely to be unusually high at 3.4 percent next year, also because recent producer price increases are only gradually being passed through to consumers. The labor market is expected to remain robust. Public spending will rise in response to the war and its economic consequences, so that budget deficits will remain at elevated levels for a longer period.
- Topic:
- Economics, GDP, Inflation, and Purchasing Power
- Political Geography:
- Europe and Germany
177. Russia-Ukraine: Dangerous Stalemate
- Author:
- European Institute of Peace
- Publication Date:
- 02-2022
- Content Type:
- Working Paper
- Institution:
- European Institute of Peace (EIP)
- Abstract:
- Seven years have passed this month since the Package of Measures for implementation of the Minsk agreements called for an “immediate and comprehensive ceasefire in certain areas of the Donetsk and Luhansk regions of Ukraine and its strict implementation…”. Despite endorsement by the UN Security Council Resolution 2202 (February 2015), little or no progress was made in implementing the Minsk agreements, with continued conflict and violations of the ceasefire reported by the OSCE Special Monitoring Mission to Ukraine (SMM) on an almost daily basis. Almost 14.000 Ukrainians lost their lives, thousands more were injured, and millions displaced. With no effective ceasefire in place, this is not a “frozen conflict,” and violent escalation may happen by intent, misunderstanding or miscalculation. Today an even more dangerous stalemate has emerged. Deep international concerns have been raised about the reported Russian military build-up along the country’s borders with Ukraine. Further raising the stakes, broader security issues have re-surfaced with Moscow demanding inter alia guarantees from the US and NATO to refrain from any further enlargement of the alliance, including the accession of Ukraine and other states. Despite intensive and on-going international consultations at all levels, there are no signs yet of de-escalation of the crisis. This report has been prepared in consultation with a group of Ukrainian and Russian experts who have been conducting quiet discussions during the past two years on the Minsk peace process and, more broadly, relations between the Russian Federation and Ukraine. These talks are held under the auspices of the European Institute of Peace.[1] Out of deep concern with present developments, it was decided to share more widely the broad consensus among the participants about the urgent need for a sustainable and durable ceasefire as a prerequisite for implementing the Minsk agreements. In a recent encouraging development, the advisers to the Normandy Four (N4) heads of state and government have supported in a joint statement after their meeting in Paris “unconditional observance of the ceasefire of 22 July 2020 regardless of differences on other issues of the implementation of the Minsk agreements.”[2] Reportedly, a follow-up meeting in Berlin on 10 February 2022 yielded no tangible results yet. Even if the Minsk peace process has come to a ground halt at present, it should be realized that the same political and security issues will have to be addressed in any renewed peace efforts in whatever format to restore peace in east Ukraine. This report highlights that any attempt to overcome the current political stalemate needs to be supported by concrete steps to establish a sustainable ceasefire at the ground-level of the conflict. The report analyses the major reasons for why a sustainable ceasefire was not implemented thus far, and offers a ceasefire management tool referred to as a “Coordination and Verification Mechanism” (CVM).
- Topic:
- Military Strategy, Violence, Peace, and Russia-Ukraine War
- Political Geography:
- Russia, Europe, and Ukraine
178. Cutting through the Value Chain: The Long-Run Effects of Decoupling the East from the West
- Author:
- Gabriel Felbermayr, Alexander Sandkamp, and Hendrik Mahlkow
- Publication Date:
- 03-2022
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- With ever-increasing political tensions between China and Russia on one side and the EU and the US on the other, it only seems a matter of time until protectionist policies cause a decoupling of global value chains. This paper uses a computable general equilibrium trade model calibrated with the latest version of the GTAP database to simulate the effect of doubling non-tariff barriers - both unilateral and reciprocal - between the two blocks on trade and welfare. Imposing trade barriers almost completely eliminates bilateral imports. In addition, changes in price levels lead to higher imports and lower exports of the imposing country group from and to the rest of the world. The targeted country group increases exports to the rest of the world and reduces imports. Welfare falls in all countries involved, suggesting that governments should strive to cooperate rather than turning away from each other. By imposing a trade war on Russia, the political West could inflict severe damage on the Russian economy because of the latter’s smaller relative size.
- Topic:
- International Cooperation, International Trade and Finance, European Union, Conflict, Trade Wars, Protectionism, and Rivalry
- Political Geography:
- Russia, China, Europe, Asia, North America, and United States of America
179. Exchanging Money for Love? A Regional Analysis of EU Cohesion Policy on Euroscepticism
- Author:
- Michael Bayerlein and Matthias Diermeier
- Publication Date:
- 04-2022
- Content Type:
- Working Paper
- Institution:
- Kiel Institute for the World Economy (IfW)
- Abstract:
- In the past, the European Union seems to have been able to tame Euroscepticism through regional 'convergence' funding. After the Eastern enlargement of the Union, however, this relationship needs to be put to the test. Not only have the new member states become the main recipients of EU funding, Eastern Europe has also changed from once being the most integration-friendly region to displaying the most integration-hostile attitudes in the EU. Motivated by this empirical puzzle, we revisit the relationship between structural 'convergence' funding and Euroscepticism and ask where - if at all - is the EU's convergence spending still able to tame Euroscepticism. Most surprisingly, correlation analyses reveal that between 2006 and 2018 larger regional subsidies go along with increasing opposition to EU integration. We can rebut this counterintuitive finding by a Diff-in-Diff approach that reveals an increasing Euroscepticism in Eastern European regions between 2006 and 2014. Nevertheless, also these more advanced models fail to establish a positive relationship between regional funding eligibility and pro-integrationist attitudes. Finally, fuzzy RDD models exploit the funding assignment rule and corroborate that the EU is no longer able to pacify integration-critical regions by their simply increasing 'convergence' funding. Nevertheless, the EU has won support in Eastern Europe where EU investments are perceived (positively). In designing a strategy to win back support for EU integration, Brussels does not need more fiscal capacity but rather has to design 'convergence' funding that is visible as well as clearly attributable to its donor.
- Topic:
- Economics, Regional Cooperation, Foreign Aid, European Union, and Eurocentrism
- Political Geography:
- Europe
180. A Primer on the 2022 National Security Strategy
- Author:
- Peter Juul and Heba Malik
- Publication Date:
- 10-2022
- Content Type:
- Working Paper
- Institution:
- Center for American Progress - CAP
- Abstract:
- The 2022 National Security Strategy introduces new ideas on navigating strategic competition with China and Russia, investing at home, and a renewed focus on the fight against climate change.
- Topic:
- Security, Climate Change, National Security, Rivalry, and Strategic Interests
- Political Geography:
- Russia, China, Europe, Asia, North America, and United States of America