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53781. Economic Integration Between the EU and the CEECS: A Sectoral Study

Author:
Francesca di Mauro
Publication Date:
04-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Economic integration between the EU and the CEECs has proceeded at high speed over the 90's, with the main channels of such integration being trade and FDI. Some authors believe that the 'commercial transition' is now complete and that a new, deeper phase of integration has started, with growing flows of FDI in the region. Following a gravity-type approach, in this paper I tackle two difficult issues surrounding the EU-CEECs integration: has FDI in the CEECs region substituted EU exports, therefore harming employment at home? Has FDI in the CEECs region been redirected away from similarly attractive countries, such as Spain and Portugal? By using a unique database on FDI broken down by country and by sector, which allows more detailed qualifications than possible in previous work, the answers to these two questions appear to be negative.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe, Spain, and Portugal

53782. Who Needs an Extenal Anchor?

Author:
Daniel Gros
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper argues that there might be non-monotonic relationship between the strength of the domestic framework for fiscal policy and the interest of a country to use an external anchor to achieve price stability. Countries with a strong domestic framework, e.g. low public debt, little pressure for excessive expenditure and an efficient tax system, would anyway enjoy low inflation rates and therefore have little need for an external anchor. Countries with high debt or very weak institutions would greatly benefit from an external anchor to save them from the extreme inflation rates they would otherwise have to endure because the market knows that the temptation for them to inflate public debt away is so strong. By contrast, countries with moderately weaknesses might be in a situation where they need some inflation to supplement government revenues with seigniorage, but the inflation resulting from the interaction with the market, which knows about this, is still moderate.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

53783. What's Trade Got To Do With It? Relative Demand for Skills within Swedish Manufacturing

Author:
Paul Brenton, Bob Anderton, and Eva Oscarsson
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper seeks to identify the contribution of trade and technological change to the increase in inequality between skilled and unskilled workers in Sweden since the 1970s. An empirical approach is adopted which allows for the outsourcing of the low-skill parts of the production chain within industries to low-wage locations and is applied to detailed industry and trade data, the latter distinguishing between low-wage sources of imports and OECD countries. Another feature of the study is the use of data on patents to capture technological change. The paper finds that, in contrast to previous studies, trade with low-wage countries may have contributed to the rise in inequality in Swedish manufacturing. Here we identify this effect through changes in relative import prices and through changes in import penetration measured in volume terms. Changes in import penetration measured in value terms, which have been used in previous studies, are not found to be significant. In addition imports seem to have had a larger effect on inequality in high-skill intensive sectors rather than the low-skill sectors. The empirical results also suggest that the increased use of technology also played a role in creating greater inequality between skilled and unskilled workers in Sweden with the magnitude of this impact increasing in the 1990s.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe and Sweden

53784. Skill Upgrading and Production Transfer within Swedish Multinationals in the 1990s

Author:
Pär Hansson
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
This paper studies the link between production transfer in Swedish-headquartered multinational enterprises (MNEs) and skill upgrading in Swedish manufacturing in the 1990s. The analysis distinguishes between horizontal and vertical foreign direct investment (FDI). The increased employment share in affiliates in non-OECD countries (vertical FDI) has a non-trivial, significantly positive effect on the share of skilled labour in the Swedish parents. On the other hand, the skill upgrading in the parents is unrelated to employment changes in their affiliates in other OECD countries (horizontal FDI). The latter is consistent with implications of the newly developed horizontal MNE models.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe and Sweden

53785. Just Good Friends? The EU-Russian "Strategic Partnership" and the Northern Dimension

Author:
Marius Vahl
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Contrary to official claims, Russia and the European Union are not strategic partners. The economic and political asymmetries between them and the still divergent normative foundations on which their policies are based constitute considerable obstacles to strategically significant co-operation between the EU and Russia. These obstacles are likely to persist in the foreseeable future, and prevent the emergence of a real strategic partnership.
Topic:
Security, Defense Policy, NATO, and Terrorism
Political Geography:
Russia and Europe

53786. European Labour Markets and the Euro: How Much Flexibility Do We Really Need?

Author:
Michael C. Burda
Publication Date:
03-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Widespread concern over real effects of EMU is consistent with new Keynesian approaches to macroeconomic fluctuations, but more difficult to reconcile with a real business cycle (RBC) paradigm. Using a model with frictions as a point of departure, I speculate that nominal price rigidity in Europe is likely to increase, while real rigidities are likely to decrease, as a consequence of monetary union. This logic implies a new European macroeconomic regime in which monetary policy is increasingly "effective" in influencing output in the short run. Similarly, changes in the nature of real and nominal price determination are likely to increase the volatility of the European business cycle. Empirical evidence of increasing covariation of price inflation and declining correlation of wage inflation and real wage growth within EMU countries in the last decade is consistent with this conjecture. Calls for additional labour market flexibility, given the magnitude of what is already in store for Europe, may be unwarranted.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

53787. The Future of Montenegro: Proceedings of an Expert Meeting

Author:
Nicholas Whyte
Publication Date:
02-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Mr. Emerson, Ladies and Gentlemen, Distinguished Friends of Montenegro, Let me start with my thanks to the Centre for European Policy Studies, the International Crisis Group and the Friedrich Ebert Foundation for organising this conference. The presentations of international and local experts will make a contribution to our consideration of the future of Montenegro. I find it especially important that this debate allows for a wide diversity of political views on the subject of Montenegro's future.
Topic:
Security, Defense Policy, and Nationalism
Political Geography:
Europe

53788. Policy Alternatives to Schengen Border Controls on the Future EU External Frontier: Proceedings of an Expert Seminar

Author:
Joanna Apap, Christopher Mulkins, and Malcolm Anderson
Publication Date:
02-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The seminar brought together 38 distinguished experts from EU countries, candidate and non-candidate countries to discuss the impact of the extension of Schengen border control regimes on EU external relations and the situation of Central and Eastern Europe and to identify alternative policy options.
Topic:
Security, Defense Policy, and Nationalism
Political Geography:
Europe

53789. Fiscal Decentralisation Economic Growth in High-Income OECD Countries

Author:
Ulrich Thießen
Publication Date:
01-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Following a brief review of the benefits and shortcomings of fiscal decentralisation, the paper attempts to empirically analyse for high-income OECD countries the relationship between per capita economic growth, capital formation and total factor productivity growth, on the one hand, and indicators of fiscal decentralisation, on the other hand. The evidence appears to be consistent with the hypothesis that the benefits of fiscal decentralisation on economic growth and capital formation are limited. However, satisfactory indicators of fiscal decentralisation are yet not existing so that the results are subject to serious qualifications.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

53790. Asymmetric Labour Markets in a Converging Europe: Do Differences Matter?

Author:
Ray Barrell and Karen Dury
Publication Date:
01-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Asymmetric economic structures across Europe may result in common shocks having asymmetric effects. In this paper we investigate whether the differences in the structure and dynamics that we observe in the European economies matter for policy design. In particular it is widely believed that labour market responses are different, with the structure of labour demand and the nature of the bargain over wages differing between countries. In addition the European economies move at different speeds in response to common shocks. In this paper we construct three different models of Europe, one where the labour market relationships are separately estimated and assumed to be different, one where the most statistically acceptable commonalties are imposed and one where common labour market relationships are imposed across all member countries. We use panel estimation techniques to test for the imposition of commonalties among countries. We find that it is possible to divide Europe into sub-groups, but it is not possible to have one model of European labour markets. We use stochastic simulation techniques on these different models of Europe and find that the preferred rule for the ECB is a combined nominal aggregate and inflation-targeting rule. We find that while this rule is dominant in all our models, the more inertia that is introduced into the labour markets, the more a nominal aggregate-targeting rule alone may be preferred. However, we conclude, that differences in the labour market transmission mechanisms across the European countries appear to have little influence on the setting of monetary policy for the ECB, although this depends on the relative importance of the different components in the welfare loss function.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

53791. Trade Jobs in Portugal: A Microeconomic Approach

Author:
Ana Rute Cardoso
Publication Date:
01-2001
Content Type:
Working Paper
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
The Portuguese economy presents a low unemployment rate when compared to its European counterparts and it has been claimed that this is partly due to the slow restructuring of the economy, which has been keeping its specialisation in traditional industries, some of them major exporting industries. This study analyses job creation and job destruction at the firm level across skill groups, during the 1980s and the 1990s. The major aim is to explore the role of international trade against alternative explanations of job flows, providing an answer to the question: did international trade help sustain the employment of particular groups of workers, namely the least skilled, in the Portuguese economy? Could conditions in international markets therefore have contributed to keep a low unemployment rate? A matched data set on workers and firms is used, which includes a direct measure of the skill of the worker. Results indicate that technology indicators are more relevant determinants of job flows than conditions in international product markets. Indeed, import prices have no impact on job creation or job destruction for the unskilled or on job creation for the skilled. Higher export prices lead to job creation for the skilled labour force, thus pointing to a certain skill upgrading.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

53792. Friendly Schengen Borderland Policy on the New Borders of an Enlarged EU and its Neighbours

Author:
Michael Emerson, Joanna Apap, Nicholas Whyte, Marius Vahl, Jakub Boratynski, and Grzegorz Gromadzki
Publication Date:
11-2001
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
One often hears the term 'Europe' being used interchangeably with 'European Union', giving the impression that those countries that are not destined to become members of the EU in the near future are not part of the same continent. Even after the forthcoming accession by 13 new countries, a significant part of Europe will remain outside the 'EU club'.
Topic:
Security and NATO
Political Geography:
Europe and Middle East

53793. Our Future Southeastern Turkish Frontiers

Author:
Nathalie Tocci
Publication Date:
10-2001
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Today's southeast Turkey has historically been the homeland of a large number of diverse ethnic groups. Nowadays, in many town and villages of the region the largest ethnic group is Kurdish. Turkish officials under Turgut Özal in the 1990s for the first time admitted there may be around 10 million Kurds living in Turkey. Other estimates indicate a Kurdish population of around 15 million. Adding to this figure the additional 10 million or so Kurds living in Iran, Iraq, Syria and the former Soviet Union, the Kurdish people represent the largest ethnic group in the world without a state of their own.
Topic:
Security and NATO
Political Geography:
Iraq, Europe, Iran, Turkey, Middle East, and Syria

53794. Issues for Europe -- Post-11 September

Author:
Daniel Gros and Michael Emerson
Publication Date:
09-2001
Content Type:
Policy Brief
Institution:
Centre for European Policy Studies (CEPS)
Abstract:
Ten days now after 11 September, the policy agenda becomes a huge set of interlocking issues – political, strategic, economic. The present note makes a first survey of these issues, and expresses opinions on some of them. However the main purpose is to establish a template or framework to help monitor and evaluate the evolution of the world's response to this massive event. It will be updated and revised in further CEPS Policy Briefs as the story unfolds.
Topic:
Security and Terrorism
Political Geography:
Europe

53795. Kosovo: A Strategy for Economic Development

Publication Date:
12-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Kosovo cannot have a stable future without sustainable economic development. This report considers the task of promoting such development. After surveying the present state of the economy, it assesses the international efforts so far to lay the groundwork for future prosperity. It also considers the prospects for the former socially owned sector, including plans for privatisation and prospects for restructuring and investment.
Topic:
Economics, Emerging Markets, and Government
Political Geography:
Eastern Europe and Kosovo

53796. Macedonia's Name: Why the Dispute Matters and How to Resolve It

Publication Date:
12-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
On 16 November 2001, Macedonia's parliament passed a set of constitutional amendments that were agreed in August, when Macedonian and Albanian minority leaders signed the Ohrid Framework Agreement. Later that day, President Trajkovski clarified the terms of an amnesty for Albanian rebels, in line with international requests.
Topic:
Conflict Prevention, Government, and International Cooperation
Political Geography:
Eastern Europe, Macedonia, and Albania

53797. Bin Laden and the Balkans: the Politics of Anti-Terrorism

Publication Date:
11-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
The global focus on Islamist extremist-inspired terrorism resulting from the 11 September atrocities has raised the question of the potential for such terrorist activity in, or emanating from, the Balkans.
Topic:
Politics, Religion, and Terrorism
Political Geography:
Eastern Europe and Balkans

53798. Bosnia: Reshaping the International Machinery

Publication Date:
11-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
After six years and billions of dollars spent, peace implementation in Bosnia and Herzegovina remains far from complete. Reshaping (ërecalibratingí, in local jargon) the international community (IC) presence is vital if the peace process is to have a successful outcome.
Topic:
International Relations, Government, and Politics
Political Geography:
Bosnia and Eastern Europe

53799. Croatia: Facing Up To War Crimes

Publication Date:
10-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
On 8 October 2001, the International Criminal Tribunal for the former Yugoslavia (ICTY) confirmed an indictment charging Slobodan Milosevic, the former president of Serbia and of the Federal Republic of Yugoslavia (FRY), with crimes committed in Croatia. This indictment had been keenly awaited for years in Croatia, where a widespread perception of international indifference to Serb crimes perpetrated against Croats between 1991 and 1995 has been ably encouraged and manipulated by the right wing.
Topic:
Development, Human Rights, and Politics
Political Geography:
Eastern Europe, Yugoslavia, Serbia, and Croatia

53800. Wages of Sin: Confronting Bosnia's Republika Srpska

Publication Date:
10-2001
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
By recognising Republika Srpska (RS) as a legitimate polity and constituent entity of the new Bosnia, the 1995 Dayton Peace Agreement embraced a contradiction. For the RS was founded as a stepping stone to a ëGreater Serbiaí and forged in atrocities against ñ and mass expulsions of ñ non-Serbs.
Topic:
Foreign Policy, Government, and Politics
Political Geography:
Bosnia and Eastern Europe