Independent State Aid Control in the Enlarged European Union
Jens Hölscher, Nicole Nulsch, Johannes Stephan
Unabhängige staatliche Organisationen in der Demokratie. Schriften des Vereins für Socialpolitik Bd. 337,
2013
Abstract
State aid and its control within the European Union have a long and controversial history. This study looks at the effects and implications of the independence of state aid control arising with the Eastern enlargement process of the EU. Qualitative analysis in case studies is used to supplement a quantitative description of state aid levels in East and West. Findings suggest that in recent years a level playing field across the EU has indeed emerged. In fact, the most pronounced differences in this respect are not observed between CEECs and the EU-15 but rather between Northern and Southern member states. However, the strong and independent status of the EU Commissioner from national influence could be shown clearly – apart from some exceptions.
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Effects of Specification Choices on Efficiency in DEA and SFA
Michael Koetter, Aljar Meesters
Efficiency and Productivity Growth: Modelling in the Financial Services Industry,
2013
Abstract
This chapter assesses the sensitivity of bank cost-efficiency scores obtained with stochastic frontier analysis and data envelopment analysis. We compare CE scores of either type for a large cross-country sample of EU banks from 1996 until 2010. The results show that CE measures differ considerably depending on specification choices across parametric and nonparametric methods. The chapter documents the reasons for these differences in terms of theoretical, sample, and further specification choices.
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German Economy Recovering – Long-Term Approach Needed to Economic Policy: Joint Economic Forecast Spring 2013
Dienstleistungsauftrag des Bundesministeriums für Wirtschaft und Technologie,
2013
Abstract
An upwards tendency re-emerged in the German economy in spring 2013. The situation in the financial markets has eased thanks to subsiding uncertainty regarding the future of the European Monetary Union. The headwind in the world economy has also tailed off somewhat. The institutes expect gross domestic product in Germany to increase by 0.8% this year (68%-projection interval: 0.1% to 1.5%) and by 1.9% next year. The number of unemployed should continue to fall to an annual average of 2.9 million this year and 2.7 million in 2014. The inflation rate is expected to drop to 1.7% this year and edge up to 2.0% next year on the back of rising capacity utilisation. The public budget will be almost balanced in 2013 and should show a surplus of 0.5% in relation to gross domestic product in 2014 thanks to more favourable economic conditions. It is now time to readopt a longer-term approach to economic policy. Although structural adjustment processes implemented in the crisis-afflicted countries have started to deal with institutional problems in the euro area, they are far from resolved. The German public budget also faces massive long-term burdens related to demographic factors.
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How does Institutional Setting Affect the Impact of EU Structural Funds on Economic Cohesion? New Evidence from Central and Eastern Europe
Marina Grusevaja, Toralf Pusch
Journal of Common Market Studies,
2012
Abstract
Structural Funds are the main instrument of the EU Cohesion Policy. Their effective use is subject to an ongoing debate in political and scientific circles. European fiscal assistance under this heading should promote economic and social cohesion in the member states of the European Union. Recently the domestic institutional capacity to absorb, to distribute and to invest Structural Funds effectively has become a crucial determinant of the cohesion process and has attracted attention of the scientific community. The aim of this study is to shed light on the effectiveness of Structural Funds in the countries of the first Central and Eastern European enlargement round in 2004. Using regional data for these countries we have a look on the impact of several institutional governance variables on the effectiveness of Structural Funds. In the interpretation of results reference is made to regional economics. Results of the empirical analysis indicate an influence of certain institutional variables on the effectiveness of Structural Funds in the new member states.
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Macroeconomic Imbalances as Indicators for Debt Crises in Europe
Tobias Knedlik, Gregor von Schweinitz
Journal of Common Market Studies,
No. 5,
2012
Abstract
European authorities and scholars published proposals on which indicators of macroeconomic imbalances might be used to uncover risks for the sustainability of public debt in the European Union. We test the ability of four proposed sets of indicators to send early-warnings of debt crises using a signals approach for the study of indicators and the construction of composite indicators. We find that a broad composite indicator has the highest predictive power. This fact still holds true if equal weights are used for the construction of the composite indicator in order to reflect the uncertainty about the origin of future crises.
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Financial Crisis Risk, ECB “Non-standard“ Measures, and the External Value of the Euro
Stefan Eichler
Quarterly Review of Economics and Finance,
No. 3,
2012
Abstract
I study the impact of banking and sovereign debt crisis risk of EMU member states on the external value of the euro. Using a regime switching model, I find that the external value of the euro has significantly responded to financial crisis risk during the period of November 2008–November 2011, while no significant effect is found for the period from February 2006 to October 2008. This suggests that the monetary expansion and interest rate cuts associated with the ECB's “non-standard” measures may have reduced the external value of the euro.
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Perspektiven für die Euroeinführung in den mittel- und osteuropäischen Kandidatenländern
Martina Kämpfe
Wirtschaft im Wandel,
No. 6,
2012
Abstract
Die mittel- und osteuropäischen Länder haben sich mit ihrem Beitritt zur Europäischen Union verpflichtet, mittelfristig den Euro als gemeinsame Währung einzuführen. Voraussetzung dafür ist, dass sie sich bei wichtigen nominalen wirtschaftlichen Kenngrößen möglichst dauerhaft an die alte EU annähern. Die meisten neuen EUMitgliedsländer wurden von der globalen Finanzkrise allerdings vergleichsweise hart getroffen, sodass das Ausmaß der wirtschaftlichen Probleme Zweifel an der Nachhaltigkeit der bisherigen Konvergenz aufkommen lässt.
Wirtschaftspolitisch sind die Länder vor besondere Herausforderungen gestellt: Sie müssen einerseits Antikrisenpolitik betreiben, andererseits dürfen sie ihren Konvergenzprozess nicht zu sehr verzögern. Angesichts dieses Dilemmas hat sich die Einstellung zur Zukunft der gemeinsamen Währung geändert. Strebten die Länder anfangs danach, den Euro möglichst rasch zu übernehmen, so scheint dieses Vorhaben nun in die Ferne gerückt zu sein. Der Zeitplan für die Erweiterung des Euroraums wird sich verschieben, auch wenn das Ziel der gemeinsamen
Währung offiziell derzeit nicht infrage gestellt wird.
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Fiscal Spending Multiplier Calculations Based on Input-Output Tables? An Application to EU Member States
Toralf Pusch
Intervention. European Journal of Economics and Economic Policies,
No. 1,
2012
Abstract
Fiscal spending multiplier calculations have attracted considerable attention in the aftermath of the global financial crisis. Much of the current literature is based on VAR estimation methods and DSGE models. In line with the Keynesian literature we argue that many of these models probably underestimate the fiscal spending multiplier in recessions. The income-expenditure model of the fiscal spending multiplier can be seen as a good approximation under these circumstances. In its conventional form this model suffers from an underestimation of the multiplier due to an overestimation of the import intake of domestic absorption. In this article we apply input-output calculus to solve this problem. Multipliers thus derived are comparably high, ranging between 1.4 and 1.8 for many member states of the European Union. GDP drops due to budget consolidation might therefore be substantial in times of crisis.
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Does the ECB Act as a Lender of Last Resort During the Subprime Lending Crisis?: Evidence from Monetary Policy Reaction Models
Stefan Eichler, K. Hielscher
Journal of International Money and Finance,
No. 3,
2012
Abstract
We investigate whether the ECB aligns its monetary policy with financial crisis risk in EMU member countries. We find that since the outbreak of the subprime crisis the ECB has significantly increased net lending and reduced interest rates when banking and sovereign debt crisis risk in vulnerable EMU countries (Greece, Ireland, Italy, Portugal, and Spain) increases, while no significant effect is identified for the pre-crisis period and relatively tranquil EMU countries (Austria, Belgium, France, Germany, and the Netherlands). These findings suggest that the ECB acts as a Lender of Last Resort for vulnerable EMU countries.
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