Suchergebnisse

The financial crisis of 2008 has rekindled interest in sovereign debt crises among policy makers and scholars. History shows that lending booms typically end in busts, with the beneficiaries of debt in the upswing often forced to default or reschedule their debts in the downswing (Sturzenegger and Zettelmeyer 2006). The impact of the first financial crisis of the 21st century on capital flows to developing countries and the signs of stress in debt markets of several European countries in the first half of 2010 raise the inevitable question, Are author about to witness a new generation of sovereign debt crises? This book addresses this question. It adopts an integrated approach by drawing on both theoretical research and experience from professionals involved in technical assistance in this area. It documents recent improvements in macroeconomic policies and debt management practices, which to a large extent explain the resilience of developing and emerging economies, and identifies challenges ahead and areas that require special attention from policy makers.

AbstractWe use Bayesian model averaging techniques to assess the role of different types of structural and institutional variables and their interaction with specific characteristics of the economy, as determinants of employment dynamics for 30 economies in Europe and Central Asia. We find that, once short‐run dynamics are controlled for, common structural determinants for the employment rate emerge, including tax rates, human capital, availability of technology, labour market regulation and trade openness. The results show that the effect of labour market regulation on employment outcomes is affected by other characteristics, such as trade openness. Focusing on the trade–labour link, we find that labour market reforms toward a more flexible labour market have a positive impact on employment ratios, and this effect is stronger for economies characterised by relatively low level of trade barriers. In addition, the positive employment effects from labour market regulation reforms are stronger; the less flexible is the initial labour market regulatory framework. These findings bring important policy insights related to the employment potential of further structural reforms and trade integration for the countries in the region.

The current and projected low fertility levels for Europe and the continuous increases in life expectancy imply that the region will go through an unprecedented process of population aging, leading to sizeable changes in the age structure of European societies. After reviewing the existing literature on the role played by demographic change as a determinant of economic growth and income convergence, with a focus on the European experience, we analyze the quantitative impact of the projected changes in the age and education composition of the labor force. Using newly available demographic projections, we show that the current demographic trends are expected to cause a slowdown in the speed of income convergence across European countries. Our projection exercise suggests that policies aimed exclusively at improving labor force participation do not appear to be sufficient to counteract the negative effects of aging on income convergence. Instead, we show that reducing the educational attainment gap between Central and Eastern European member states and the rest of the European Union in addition to increasing labor force participation leads to an accelerated pace of income convergence.

The current and projected low fertility levels for Europe and the continuous increases in life expectancy imply that the region will go through an unprecedented process of population aging, leading to sizable changes in the age structure of European societies. After reviewing the existing literature on the role played by demographic change as a determinant of economic growth and income convergence, with a focus on the European experience, we analyze the quantitative impact of the projected changes in the age and education composition of the labor force. Using newly available demographic projections, we show that the current demographic trends are expected to cause a slowdown in the speed of income convergence across European countries. Our projection exercise suggests that policies aimed exclusively at improving labor force participation do not appear to be sufficient to counteract the negative effects of aging on income convergence. Instead, we show that reducing the educational attainment gap between Central and Eastern European member states and the rest of the European Union in addition to increasing labor force participation leads to an accelerated pace of income convergence.

Abstract
Using information from the Amadeus dataset and the Business Environment and Enterprise Performance Survey, we provide an empirical investigation of the industry and firm-specific determinants of the intensive margin (i.e., within existing firms) job creation process in eleven Central and Eastern European economies during the period 2002–2009. Our results indicate that during the years prior to the global financial crisis, traditional industries were crucial for the net intensive margin creation of jobs in the region but, by contrast, services firms were less vulnerable to the economic downturn. At the firm level, small and young already existing firms and subsidiaries of multinational corporate groups tended to register the highest employment growth rates. The empirical results also indicate that more productive surviving firms tended to be less vulnerable to the economic downturns in terms of employment change. The perceived quality of the business climate by enterprises of the region is robustly correlated with intensive margin employment growth both before and during the recent global financial crisis. Interestingly, the best performing surviving firms are estimated to be most negatively affected by a poor business environment. Institutional barriers thus appear as an important factor hampering firm growth in Central and Eastern Europe. These findings hold for the group of high-growth surviving firms (gazelles) that disproportionately accounted for the creation of new jobs in these economies.

JEL classification

L16; L21; L25; L51; L53

This paper investigates the drivers of growth and prosperity in a group of eleven European countries -- Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovenia, and Slovakia (the EU11). Since the EU11 began the transformation process, this group of emerging countries has made impressive strides as developing market economies and is anchoring development in European Union institutions. There are reasons to believe that the convergence of EU11 income per capita to Western European levels will continue, but will proceed more slowly. The paper concludes that trade and financial integration have sped along at a spectacular pace in the EU11 in the recent past, although trade in modern services and the integration of government bond and equity markets are somewhat behind. As in the rest of Europe, demographic developments will pose huge challenges for the sustainability of public finance in the EU11 economies. In the next several decades, the EU11 labor force is expected to contract more than labor forces in the rest of the European Union, making it even more urgent that countries in the region reform pension systems, change migration policy, and find incentives to attract talent to the region. Closing the gap with the rest of the European Union in educational attainment levels and improving education quality might significantly soften the constraints imposed by the demographic threats and produce sizable returns in terms of additional income convergence.