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21. What Affects the Main Engine of Growth in the European Economy? Industrial Interconnectedness and Differences in Performance of Business Services Across the EU25

Author:
Grzegorz Poniatowski and Maciej Sobolewski
Publication Date:
06-2013
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
The main purpose of this study is to determine what are the main factors which stand behind the diversity in performance of business services measured by their contribution to growth in the EU Member States. We show that in addition to typical growth factors which enhance labour productivity, also the extent of interconnectedness of business services with upstream industries is important to explain service-based economic growth. The analysis yields two interesting results. Firstly, the authors show that patterns of industrial interconnectedness of business services are considerably diversified across the EU Member States indicating large differences in the integration of services as supplier with other sectors on a country level. Secondly they show that the diversified growth performance of business services across the EU25 countries can be explained by differences in labour productivity and differences in forward linkages. The results indicate the fundamental role of business services as the main engine of growth in the European economy. This service-based growth is channelled mainly through increases in labour productivity and forward interconnectedness of services with downstream industries. On the policy making level the results indicate that investment in human and intangible capital are crucial for the service-dominated economy as they not only enhance economic growth inside knowledge intensive services but also facilitate transmission of growth impulses to downstream industries by increasing diffusion and integration of services as suppliers of high value added inputs to the economy.
Topic:
Development, European Union, Economy, Economic Growth, Services, Innovation, and Private Sector
Political Geography:
Europe

22. Private Sector Development in the South and East Mediterranean Region

Author:
Mehdi Safavi and Richard Woodward
Publication Date:
10-2012
Content Type:
Special Report
Institution:
Center for Social and Economic Research - CASE
Abstract:
This report is concerned with the analysis of privatization and private sector development for the eastern and southern Mediterranean countries partnered with the European Union and collectively known as MED-11. Noting that the analysis applies to the situation prior to the dislocations of the Arab Spring, we review the shift in the relative shares of the public and private sectors in these countries, as well as the business climate affecting the development of the private sector, examine a number of cultural factors that may influence the development of the private sector, and discuss some alternative scenarios for future developments. In the last 20 years, efforts have been made in all countries of the MED-11 to encourage private sector development and, to a greater or lesser extent, privatization of stateowned assets. However, there is a great deal of differentiation among the countries in the group. In the MED-11, Israel has not only the most business-friendly policy environment but also the most developed private sector, accounting for almost 80% of employment. The other countries of the region can be divided into two groups: one, including Algeria, Libya, and Syria, where reforms promoting privatization and private sector development have been very limited, and the rest, in which they have been much more extensive (the Palestine Authority is, for obvious reasons, a rather special case). A generally poor business environment makes for a large informal sector in almost every country in the region; however, generally speaking, we do not find the cultural factors we examine to be hostile to private sector development. Optimistic, reference and pessimistic scenarios are discussed; which of these is realized in any particular MED-11 country will depend greatly on the direction of change following the events of 2011’s Arab Spring.
Topic:
Development, Privatization, Economy, Innovation, and Private Sector
Political Geography:
Europe and Mediterranean

23. Agglomeration in Europe in the Context of Socio-Ecological Transition

Author:
Constantin Zaman and Izabela Marcinkowska
Publication Date:
12-2012
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
This paper analyses the spatial distribution of economic activity in the European Union at NUTS2 level over the 2001-2010 period. The aim of the study is twofold: (i) to provide descriptive evidence of the agglomeration distribution in Europe and its evolution over time across countries; (ii) to identify the nature of agglomeration and the factors that determine its level, with particular attention paid to the socio-ecological transformation occurring in Europe. The study concludes that: a) the changes in agglomeration are sensitive to demographic transformations taking place; b) the ecological transformation has a mixed effect, depending on each country; c) significant differences are observed between new and old Member States; the crisis has had a significant influence on agglomeration but only in Western Europe.
Topic:
European Union, Inequality, Economy, and Agglomeration
Political Geography:
Europe

24. The Impact of Remittances on Poland’s Economy

Author:
Irena Topińska, Katarzyna Pietka-Kosinska, and Luca Barbone
Publication Date:
09-2012
Content Type:
Policy Brief
Institution:
Center for Social and Economic Research - CASE
Abstract:
This E-Brief reports on the results obtained with respect to the macroeconomic impact of remittances (simulated through a macro model of the Polish economy), as well as their effect at the household level and in terms of their regional distribution. The authors show that remittances have had a significant and positive impact on the Polish economy, and that the impact can be expected to increase with the expected rise in labor mobility in Europe over the next few years. This E-Brief is a summary of the report titled “Wpływ przepływów pieniężnych na polską gospodarkę w latach 1992-2012 – raport Western Union, przygotowany przez Centrum Analiz Społeczno-Ekonomicznych - CASE”, (Effects of Remittances on the Polish economy in the years 1992-2012 – report Western Union, prepared by CASE).
Topic:
Finance, Economy, Macroeconomics, and Remittances
Political Geography:
Europe and Poland

25. Egypt: Political Transition vs. Economic Challenges?

Author:
Marek Dabrowski
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
"The revolutionary events of January and February 2011 opened the door for democratic transition in Egypt, but the road to a stable and sustainable democracy will be long and full of challenges. However, the macroeconomic environment post-revolution has become increasingly worrying as a result of past fiscal and monetary imbalances, revolution-induced shocks and unstable politics. This inability to address pressing economic challenges may hurt the nascent and fragile Egyptian democracy."
Topic:
Reform, Economy, Institutions, Macroeconomics, and Political System
Political Geography:
North Africa and Egypt

26. The Impact of the Global Financial Crisis on Public Health Expenditures in the Economies of the Former Soviet Union

Author:
Roman Mogilevsky
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The financial crisis strongly affected the countries of the former Soviet Union1 (FSU) in 2008-2009. All of the countries experienced either a recession or a considerable slowdown in growth. The crisis also adversely affected government budget revenues, so governments had to adjust their expenditures to the falling revenues. Under such conditions, public expenditures on health were at risk of being cut. This brief explores whether or not this actually happened and why or why not.
Topic:
Financial Crisis, Economy, Public Health, and Post-Soviet Space
Political Geography:
Eastern Europe

27. Will the U.S. Dollar Remain the Global Reserve Currency?

Author:
Marek Dabrowski
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
The U.S. economy’s rapidly growing trade and current account deficits (2003-2007) and systematic weakening of the dollar against the Euro and other currencies raised several concerns about its future as the global reserve currency. The global financial crisis of 2007-2009, while reinforcing the U.S. dollar’s role as the most liquid and in demand currency (especially during periods of increased risk aversion) triggered a political debate on how the future global reserve currency system should be shaped.
Topic:
Finance, Economy, Currency, Dollar, and Euro
Political Geography:
Global Focus and United States of America

28. Limits of Quantitative Easing

Author:
Marek Dabrowski
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Center for Social and Economic Research - CASE
Abstract:
"The recent decision of the U.S. Federal Reserve Board (Fed) to increase its assets by purchasing $600 billion worth of Treasury bonds is unlikely to boost economic growth or employment prospects in the U.S. Instead, it will cause damage to the world economy and may even lead to another financial crisis (especially in emerging and developing markets), where the U.S. dollar remains a leading reserve and transaction currency."
Topic:
Financial Crisis, Economy, Macroeconomics, and Currency
Political Geography:
Global Focus and United States of America