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1061. Institutions Structural Unemployment: Do Capital-Market Imperfections Matter?

Author:
Ansgar Belke and Rainer Fehn
Publication Date:
11-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper analyses whether differences in institutional structures on capital markets contribute to explaining why some OECD-countries, in particular the Anglo-Saxon countries, have been much more successful over the last two decades in producing employment growth and in reducing unemployment than most continental-European OECD-countries. It is argued that the often-blamed labour market rigidities alone, while important, do not provide a satisfactory explanation for these differences across countries and over time. Financial constraints are potentially important obstacles against creating new firms and jobs and thus against coping well with structural change and against moving successfully toward the “new economy”. Highly developed venture capital markets should help to alleviate such financial constraints. This view that labour-market institutions should be supplemented by capital market imperfections for explaining differences in employment performances is supported by our panel data analysis, in which venture capital turns out to be a significant institutional variable.
Topic:
Economics, International Trade and Finance, and Political Economy
Political Geography:
Europe

1062. The Changing Nature and Determinants of EU Trade Policies

Author:
Paul Brenton
Publication Date:
10-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
EU trade policies and the environment in which they are determined are now considerably different from when the EU came into being in the 1950s. With the exceptions of agriculture and textiles and clothing, tariffs and quantitative restrictions on trade in goods have been reduced to historically very low levels. But trade policy is now about much more than border restrictions upon trade in goods. Trade in services and the impact of national differences in regulatory regimes are now firmly on the trade policy agenda. This paper describes the current multilateral and preferential trade policies of the EU. It highlights the increasing importance of regulatory issues and the fact that some of these are being addressed outside of both multilateral and standard bilateral free trade agreements. This reflects the mixed motives behind EU trade policies and that for trade with certain regions the typical political economy factors framing trade policy are no longer relevant. For example, liberalisation of transatlantic trade, in the limited form at present of mutual recognition of conformity assessment, is being strongly driven by large corporate business. This trend suggests that the pyramid of preferences usually used to depict EU trade policies is becoming very distorted.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

1063. One Size Must Fit All: National Divergences in a Monetary Union

Author:
Daniel Gros and Carsten Hefeker
Publication Date:
07-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
What policy objective should a common central bank in a heterogeneous monetary union pursue? Should it base its decisions on the EU-wide average of inflation and growth or should it instead focus on (appropriately weighted) national welfare losses based on national rates of inflation and growth? We find that a central bank that minimises the sum of national welfare losses reacts less to common shocks and that this can lead to higher average union-wide expected welfare, if the variability of common shocks is large relative to the inflation bias. But for countries with a transmission mechanism close to the average, welfare can actually be lower in this case. The inflationary bias depends on the interaction between the transmission mechanism and distortions in labour markets.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

1064. The International Trade of Multinational Firms: The Empirical Behaviour of Intrafirm Trade in a Gravity Equation Model

Author:
Kimberly A. Clausing
Publication Date:
06-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
Multinational firms are an increasingly important part of international economic integration. In recent years, foreign direct investment has been increasing at a rate that exceeds both the rate of growth of international trade and that of income. For many countries, the sales of affiliates of multinational firms have long dwarfed the value of trade. For example, in 1997, European Union country firms exported $283 billion in products to the United States. In the same year, affiliates of E.U.-based multinational firms sold $816 billion worth of products in the United States, almost three times the value of exports.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
United States and Europe

1065. Technical Barriers to Trade in the European Union: Importance for Accession Countries

Author:
Paul Brenton, John Sheehy, and Marc Vancauteren
Publication Date:
04-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
With trade in industrial products between the EU and the CEECs now essentially free of tariff and non-tariff restrictions, the principal impact of accession to the EU on trade flows will be through access to the Single Market of the EU. A key element of this will be the removal of technical barriers to trade. In this paper we try and highlight the importance of technical barriers to trade between the EU and the various CEECs, distinguishing sectors according to the different approaches to the removal of these barriers in the EU: mutual recognition, detailed harmonisation (old approach) and minimum requirements (new approach). We utilise two sources of information on technical regulations: a sectoral classification from a previous study of the impact of the Single Market and our own detailed translation of EU product related directives into the relevant tariff codes. The analysis suggests that the importance of technical barriers varies considerably across the CEECs. The adjustment implications of access to the Single Market are likely to be greatest for those most advanced in their accession negotiations.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe

1066. Goodbye, Agenda 2000, Hello Agenda 2003: Effects of the Berlin Summit on Own Resources, Expenditures, and EU Net Balances

Author:
Michael Emerson and Jorge Núñez Ferrer
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This paper describes the development of the negotiations from the birth of the Agenda 2000 proposals to the end of the Berlin European Council Summit and discusses the consequences of the outcome. The study shows to what extent net contributions to the EU budget and narrow national interests dominated the negotiations, at the expense of the original aims of the reforms (to prepare the Union for enlargement and for the next round of WTO negotiations), which were practically forgotten. This type of behaviour is by no means unique. On the contrary, it has been recurrent in the history of the EU. Estimates of future expenditures and own resources show that the Berlin European Council conclusions will prove to be far from satisfactory.
Topic:
Economics, Government, Human Rights, International Trade and Finance, Migration, and Political Economy
Political Geography:
Europe and Berlin

1067. Consumer Credit in the European Union

Author:
Nuria Diez Guardia
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Centre for European Policy Studies
Abstract:
This report analyses the European consumer credit markets and their regulation at European level. Its findings are as follows: European consumer credit markets are characterised by deep national differences and strong market segmentation. The report finds no generalised model of consumer credit from the analysis of statistical data. An Anglo-Saxon consumer credit model cannot be identified. The weight of consumer credit is far higher in the US economy than in the EU countries, including the UK. In the US, the share of consumer loans made by banks is much lower, securitisation of consumer credit assets is very developed and the share of revolving credit is much greater than in the EU countries. Nor is it possible, on account of the large differences in the use of consumer credit observed across EU countries, to identify a European model of consumer credit. Consumer credit is very widely used in Sweden, whereas it is underdeveloped in Greece and Italy. The use of consumer credit reaches comparatively high levels in Germany and the UK and an intermediate level in France and Spain. Lending to consumers is carried out through bank intermediation, crossborder provision is non-existent.
Topic:
Economics and Political Economy
Political Geography:
United States, United Kingdom, Europe, Greece, France, Germany, Spain, and Italy

1068. Cultural Contradictions of Post-Communism: Why Liberal Reforms Did Not Succeed in Russia

Author:
Nina Khrushcheva
Publication Date:
05-2000
Content Type:
Working Paper
Institution:
Council on Foreign Relations
Abstract:
One goal of Russia's economic reforms during the last ten years has been to establish a new class of businessmen and owners of private property—people who could form the foundation for a new model post-Soviet citizen. However, the experience of this post-communist economic “revolution” has turned out to be very different from the original expectations. For as people became disillusioned with communism due to its broken promises, the words “democracy” and “reform” quickly became equally as unbearable to large sectors of the Russian public after 1991. Such disillusion was achieved in less than ten years—a record revolutionary burnout that would be the envy of any anti-Bolshevik.
Topic:
Communism, Democratization, Development, Economics, and Government
Political Geography:
Russia, Europe, Asia, and Soviet Union

1069. Learning from each other in North and South: Local Agenda 21 in Germany and the Republic of Korea

Author:
Petra Stephan
Publication Date:
09-2000
Content Type:
Working Paper
Institution:
Institute for Development and Peace
Abstract:
This report is based on an international workshop which took place at the Institute of Development and Peace (INEF) in Duisburg/Germany in June 2000. A delegation of the Republic of Korea - including members of local communities and local governments, as well as NGO representatives – on a study trip to Germany - had been invited to exchange experiences and information about Local Agenda 21 processes in Germany and the Republic of Korea. The following papers reflect important issues which have been raised and discussed during the workshop.
Topic:
Economics and Globalization
Political Geography:
Europe, Israel, Germany, and Korea

1070. Behind the Myth of the Mittelstand Economy. The Institutional Environment Supporting Small and Medium-Sized Enterprises in Germany

Author:
Jorg Meyer-Stamer and Frank Waltring
Publication Date:
08-2000
Content Type:
Working Paper
Institution:
Institute for Development and Peace
Abstract:
The existence of highly dynamic and successful small and medium-sized enterprises (SME) is one of the characteristic features of the German economy. They have been, and continue to be, a growth and a job machine. Their strong performance has raised interest in other countries, with less dynamic SME, which are keen to strengthen their SME sector. Learning from the German experience appears as a promising exercise.
Topic:
Economics and Industrial Policy
Political Geography:
Europe and Germany