Russia: Overcoming the Effects of Economic Crisis Takes Time
Martina Kämpfe
Wirtschaft im Wandel,
No. 6,
2010
Abstract
The last year's decline of Gross Domestic Product in Russia was harder than in most big economies of the world. The financial crisis has revealed specific circumstances of growth in Russia: The situation deteriorated not only by the downfall of crude oil prices, but especially by the Russian banking sector not being able to satisfy financing demand of the private sector enterprises. So foreign liabilities of enterprises had increased and the dependence of the enterprises on the international financial markets had strengthened. In that way impacts of the global financial crisis affected Russia harder. Although external conditions for the Russian economy improved in the last months due to the rise of world oil prices and global demand for commodities, domestic demand still suffers from small revenues and bad financing conditions for enterprises. Because of its structural weakness it will take Russia longer than other transformation countries to overcome the crisis. Economic growth in the near future will expand much smaller than on last years’ average.
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Im Fokus: Polen in der globalen Finanz- und Konjunkturkrise – Realwirtschaft trotzt mit IWF-Unterstützung den Finanzmarktturbulenzen
Tobias Knedlik
Wirtschaft im Wandel,
No. 4,
2010
Abstract
Poland’s economy resists turbulences on financial markets
Poland has been affected by the global financial crisis. However, developments in Poland deviated considerably from developments in other middle and eastern European countries. Risk premiums, as measured by credit default swaps, increased by less but more suddenly as compared with other countries of the region. The Polish currency crisis started earlier and lasted longer as in other countries of the region. The developments on financial markets did, however, not result in a recession.
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A First Look on the New Halle Economic Projection Model
Sebastian Giesen, Oliver Holtemöller, Juliane Scharff, Rolf Scheufele
Abstract
In this paper we develop a small open economy model explaining the joint determination of output, inflation, interest rates, unemployment and the exchange rate in a multi-country framework. Our model – the Halle Economic Projection Model (HEPM) – is closely related to studies recently published by the International
Monetary Fund (global projection model). Our main contribution is that we model the Euro area countries separately. In this version we consider Germany and France, which represent together about 50 percent of Euro area GDP. The model allows for country specific heterogeneity in the sense that we capture different adjustment patterns to economic shocks. The model is estimated using Bayesian techniques. Out-of-sample and pseudo out-of-sample forecasts are presented.
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Konjunktur aktuell: Die Erholung legt nur eine kurze Pause ein
Wirtschaft im Wandel,
No. 3,
2010
Abstract
Die weltwirtschaftliche Erholung wird sich im Jahr 2010 weiter fortsetzen. Besonders hoch ist die Dynamik in den asiatischen Volkswirtschaften. Auch in den USA erholt sich die wirtschaftliche Aktivität trotz weiterhin bremsender Einflüsse aus dem Immobiliensektor und vom Arbeitsmarkt so weit, dass das
Bruttoinlandsprodukt in diesem Jahr bereits wieder das Vorkrisenniveau erreichen wird. Im Euroraum verläuft die Erholung hingegen schleppend. Für einige Länder bestehen Zweifel daran, ob die Wirtschaftspolitik über die Handlungsspielräume verfügt, die hohen Haushalts- und Leistungsbilanzdefizite einzudämmen. Dies erhöht die Unsicherheit über die wirtschaftliche Entwicklung und bremst die Konsum- und Investitionsgüternachfrage. In Deutschland kam die Erholung Ende 2009 ins Stocken; der private Konsum und die Bauinvestitionen fielen schwach aus. Der Arbeitsmarkt zeigt sich hingegen weiterhin sehr robust. Die Unternehmen haben bisher trotz des starken Einbruchs weitgehend auf Entlassungen verzichtet, und eine abrupte Entlassungswelle im Nachgang der Krise wird wohl ausbleiben. Erklären lässt sich dies durch die ausgeweiteten Kurzarbeiterregelungen und die Kosten, die bei Entlassung und erneutem Personalaufbau im Zuge der wirtschaftlichen Erholung entstehen. Die Arbeitsproduktivität wird somit noch einige Zeit unter dem Vorkrisenniveau liegen und keinen großen Spielraum für Lohnerhöhungen bieten, sodass die realen Einkommen nur wenig steigen werden. Der private Konsum dürfte jedoch von der robusten Arbeitsmarktlage tendenziell gestützt werden. Die Hauptantriebskraft für die deutsche Konjunktur ist allerdings nach wie vor die weltwirtschaftliche Dynamik. Sie wird die Exporte nach dem Einbruch in der Krise wieder beflügeln und nach und nach zu einer Wiederbelebung der Unternehmensinvestitionen führen. Insgesamt wird das Bruttoinlandsprodukt in Deutschland im Jahr 2010 um 1,8% zulegen, und auch 2011 setzt sich der Erholungskurs fort. Das Produktionsniveau wird aber Ende 2011 noch unter dem Vorkrisenniveau und unter dem Produktionspotenzial liegen. Für die Wirtschaftspolitik bleibt der sanfte Ausstieg aus der expansiven Geld- und Finanzpolitik die zentrale Aufgabe. Die Nachwehen der globalen Finanz- und Wirtschaftskrise können nicht als Vorwand dienen, die notwendige Konsolidierung aufzuschieben. Denn eine wichtige Erkenntnis aus der jüngsten Vergangenheit ist, dass nur einem auch finanziell handlungsfähigen Staat die Stabilisierung schwerer wirtschaftlicher Krisen gelingen kann.
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International Climate Policy after Kyoto – Economic Challenges Ahead
Wilfried Ehrenfeld
Wirtschaft im Wandel,
No. 12,
2009
Abstract
The signs are increasing that the gain in greenhouse gas emissions since the beginning of the 20th century causes the average global temperature to rise. Limiting the temperature rise to 2°C should at least avoid the worst consequences of global warming. This would require the greenhouse gas emissions to reach their maximum value by no later than 2015 and to be dramatically reduced worldwide from that time until 2050. From the economic perspective, there are a number of important questions: In the first place, how can the initial situation be described in economic categories? Therefore, the emissions should first of all be identified by region and sector and thereupon, the adjustment possibilities are to be outlined. Which costs and which revenues are associated with climate policy? The bandwidth of the estimated damage is between 5% and 20% of global gross domestic product (GDP) annually in the case of unmitigated climate change. These estimates are compared to around 1% of global GDP, which would be spent to stabilize the concentration of greenhouse gases in the atmosphere. How are the global targets to be distributed regionally and sectorally, and which economic instruments are recommended for this purpose? Obviously, tradable permits are preferred. Here, the initial assignment and the nature of the allocation on the one hand and the tradability on the other play a prominent role. What politico-economic conflicts arise and what recommendations can economists give to solve these conflicts goal-oriented? Finally, what is to recommend in terms of political economy in order to remain credible in particular in the sense of an international climate agreement?
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Russia: A Victim to Transition or to the Financial Crisis?
Marina Grusevaja
Wirtschaft im Wandel,
No. 8,
2009
Abstract
The global financial crisis has revealed deficiencies of the Russian economic system which are caused by the path of the transformation from central planning to the market economy, and not only attributable to the downfall of crude oil prices. While the worldwide liquidity crunch impaired the availability of loans to enterprises, the situation in Russia has deteriorated especially by the large exposure of the private sector to short-term foreign liabilities and by the one-sided orientation of the economy relying on the natural resources industry. Until the mid-2008, the foreign debt of the private banks and non-banks had increased strongly and had strengthened the dependence of the Russian economy on the developments on the international financial markets. The Ruble devaluation at the end of January 2009 aggravated the situation. The high short-term foreign debt of the private sector and the dependence on exports of natural resources are typical outcomes of the Russian transformation path. Therefore, on the one hand, the banking sector has not being able to satisfy financing demand of the private sector beyond the natural resources industries, enterprises became forced to borrow short-term money abroad. On the other hand, the economic strategy of the past seventeen years has strengthened the influence of the state on the natural resources sector – with the strong priority to develop it further. Hence, the one-sided economic development negatively affects the adaptability of the real-economic sector to change during the crisis period. In essence, the present political preferences of the government are aimed at providing direct financial assistance and at protectionist measures. In the long run, these actions could lead to stronger intervention of the state in the economy. Due to these recent developments, the crisis is likely to continue in Russia longer than in the other transformation countries.
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Evaluating Communication Strategies for Public Agencies: Transparency, Opacity, and Secrecy
Axel Lindner
B.E. Journal of Macroeconomics,
2009
Abstract
This paper analyses in a simple global games framework welfare effects stemming from different communication strategies of public agencies if strategies of agents are complementary to each other: Communication can either be fully transparent, or the agency opaquely publishes only its overall assessment of the economy, or it keeps information completely secret. It is shown that private agents put more weight on their private information in the transparent case than in the case of opacity. Thus, in many cases, the appropriate measure against overreliance on public information is giving more details to the public instead of denying access to public information.
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Global Financial Crisis Seriously Hits Russian Economy Because of Structural Imbalances
Martina Kämpfe
Wirtschaft im Wandel,
No. 6,
2009
Abstract
Due to the falling global demand for commodities and the heavy decline of world oil prices in last summer, Russian economy was affected seriously. The following decrease in export revenues and a wave of short-term capital withdrawals led to a crash of Russian stock and capital markets and a deterioration of the economic situation at the end of the previous year. The government decided to stabilize the exchange rate of the Rouble by interventions and to support the domestic banking sector in order to maintain credit availability. In respect of the approaching recession, the parliament approved an economic stimulus package that would help to stabilize the economy and to avoid too strong social burdens for the households. Nevertheless, there is a strong weakening of economic growth because of the economy’s dependency from oil prices and the lack of alternatives up to now.
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Changing patterns of employment
Cornelia Lang
Wirtschaft im Wandel,
No. 4,
2009
Abstract
In Germany, the typical pattern of employment is still an employee with open-ended full time contract (standard employment relationship). Nearly three out of four employed persons work in that type of employment. However, during the last years, a number of other employment models expanded in the labour market: part-time, temporary, short-term and marginal workers. Main reasons for that development are the effects of globalization, the structural change in modern economies (the increasing importance of the services sector), and changing preferences on the part of employees to achieve a better work-life-balance. The article deals with the rise of atypical employment relationships. We find that atypical work is a domain of female and young people. During the last years, atypical employment relationship in West and East Germany increased similarly due to globalization. Differences in employment patterns between East and West could be linked to employment behaviour and structural determinants.
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The New EU Members on the Verge of Disaster: What to Do?
Hubert Gabrisch
Wirtschaft im Wandel,
No. 3,
2009
Abstract
The long lasting, but externally financed boom in the new EU countries has collapsed under the impacts of the global financial crisis. The countries’ fiscal and monetary authorizes do not seem to be able to effectively resist – a deep crisis is under way. The situation is particularly dramatic in the Baltic countries, where the hands of the monetary authority are institutionally tied, and an expansionary fiscal policy would trigger off speculative attacks on the exchange rate. Neither the maintaining of the currency board arrangement nor an ‘emergency access’ to the Euro zone would help. The other non-Euro members of the Union still aim to adopt the Euro in the next future and, thus, are reluctant to give up the Maastricht criteria. The Euro countries Slovakia and Slovenia might face a major deterioration of their credit rating if governments would attempt to increase fiscal deficits. All in all, two problems are to be solved: first, the external provision of liquidity to their economies and, second, an approach that anchors policies in the countries against economic nationalism, which is a beggar-thy-neighbor policy. We propose a combination of a reformed exchange rate mechanism with a stability and solidarity fund for all countries. The former would help to avoid too strong depreciations and the latter would provide liquidity to stabilize the exchange rate and the entire economy.
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