Institut für Volkswirtschaftslehre (bis 2010)

Permanent URI for this collectionhttps://hohpublica.uni-hohenheim.de/handle/123456789/51

Browse

Now showing 1 - 13 of 13

Die Aussenhandelspolitik der EU gegenüber China: "China-Bashing" ist keine rationale Basis für Politik
(2007) Belke, Ansgar; Spies, Julia
Mit der Verabschiedung einer handelspolitischen Strategie gegenüber China Ende Oktober 2006 richtet sich die Europäische Union (EU) in einem veränderten globalen Wettbewerbsumfeld neu aus. Erstmals wird mit dem Einsatz von Schutzmaßnahmen gedroht, sollte China die multilateralen Vereinbarungen der Welthandelsorganisation (World Trade Organization ? WTO) nicht vollständig umsetzen. Doch hat auch die EU ihre ?Hausaufgaben? in den vergangenen Jahren nicht immer erledigt. Auf die Einfuhrschwemme von Textilien und Bekleidung Anfang 2005 reagierte sie durch die Erhebung neuer Quoten. In diesem Papier argumentieren wir, dass nur eine reziproke Marktöffnung eine stabile Partnerschaft bedingt, bei der beide Seiten vom ohnehin nicht aufzuhaltenden Vormarsch Chinas profitieren können.
Degree of Openness and the Choice of Exchange Rate Regimes: A Re-Evaluation with Value-Added Based Openness Measures
(2005) Wang, Lars; Belke, Ansgar
The concept of trade openness is broadly applied as a potential predictor in numerous empirical studies, despite the fact that no commonly accepted approach of measuring openness has been developed. The most widely applied (?traditional?) openness indices are not able to accurately calculate the degree of trade openness. Many openness concepts try to adjust the traditional measures of openness with aim to increase the quality of assessment, but most of these attempts show a poor correlation with the traditional concept. This might indicate that the alternative approaches capture different aspects of trade openness. This study presents the development of innovative value-added based (?actual?) measures of openness towards international and bilateral trade, respectively. They are based on a multi-regional input-output analysis of income effects due to trade. In clear contrast to the mainstream view, the actual openness concept corrects the traditional concept by expressing trade in value-added terms instead of gross terms. Traditional openness measures do not take the international redistribution of income generated by trade into account. This means, for example, that the export ratio overstates the potency of a country to build a surplus in output at home because imported intermediate commodities that are employed in the process of production of exported commodities generate income abroad. The import ratio which expresses imports as a share of the gross domestic product overstates the dependency on imports since residents have to spend a lower portion of their income to purchase imports from abroad. Imports are partly produced with intermediate commodities delivered by the country that creates income for its production factors. The innovative actual openness concept is able to reflect the different structures of production among countries since the value-added created by trade is forecasted based on a sound theory of production. This makes it possible to quantify the effects of the interactions between industries within an economy. Open economies consist of more firms that import intermediate of final commodities for the purpose of their re-export than closed economies. These firms, which redistribute final commodities or process the finishing of imported intermediate commodities, employ less domestic factors of production and thus contribute less to national income than other firms which produce exports primarily with national intermediate commodities in all processing stages. This means that the more open economies are, the smaller the proportion of domestic production factors in the production process of exports is and the additional income earned from the selling of exports is again transferred abroad by means of imported intermediate commodities employed in exports. There are only a limited number of degrees of trade openness data bases based on concepts of openness measurement that differ to the traditional approach. They only include data for a few countries, which mainly consist of industrialized economies, and/or only for a small number of years. Consequently, the outcome of empirical tests of potential associations between the degree of openness and other variables might be, in some cases, hampered. In clear contrast to this, the new data base of the degrees of openness to international trade based on the actual openness concept consists of roughly 20,000 entries. The data base represents the degrees of trade openness of 66 countries, which range from developing to highly industrialized economies, for a period of 14 years (1989 to 2002). This feature of the study is a strong contribution to economic research since it makes the improved adequacy in the indication of trade openness available to many different empirical analyses. The empirical re-evaluation of the association between the degree of openness and the choice of exchange rate regimes in this contribution is based on regression analysis which contains up to 525 observations of 54 countries between the years 1989 and 2000. The test results indicate a positive and statistically significant correlation between trade openness and the likelihood of choosing a fixed exchange rate regime. This is clearly in line with the findings of the mainstream in the empirical research. Subsequently, the analysis of the relationship between the degree of trade openness and the selection of exchange rate regimes is extended to adhere to the ongoing debate in economic research as to when the Central and Eastern European countries (CEECs), which became member countries of the Economic and Monetary Union in May 1, 2004, are able to adopt the euro as their national currency. The results of a computable general equilibrium analysis suggest that if the Central and Eastern European countries meet the Maastricht criteria and the non-devaluation condition in the Exchange Rate Mechanism II, they could gain net benefits from the abolishment of their national currencies in the year 2008.
Enlarging the EMU to the East : what effects on trade?
(2007) Belke, Ansgar; Spies, Julia
The purpose of this paper is to assess the implications of the Economic and Monetary Union (EMU) accession of eight Central and Eastern European Countries (CEECs) on their share in EMU-12 imports. Overcoming biases related to endogeneity, omitted variables and sample selection, our results indicate that the common currency has boosted intra-EMU imports by 7%. Under the assumption that the same relationship between the explanatory variables and imports will hold for EMU-CEEC trade, we are able to predict the future impact of the euro. Our findings suggest that except for the least integrated countries, Poland, Latvia and Lithuania, all CEECs can expect increases in the EMU-12 import share.
Exchange rate regimes and the transitionprocess in the Western Balkans : a comparative analysis
(2007) Belke, Ansgar; Zenkic, Albina
In the academic literature some criteria have been identified which could have an impact on the success of the transition process, such as macroeconomic stability, microeconomic restructuring and implementation of legal and institutional reforms. The role of the exchange rate system in general is to foster the stability of the monetary environment characterized by low inflation rates and a stable domestic currency. Although the importance of a sustainable price-level oriented monetary policy for the transition-success has been stressed in the academic literature, there are still further questions to be answered related to the choice of the exchange rate system throughout the different phases of the transition process. This paper intends to contribute to close this gap in the literature. The guiding research question is how the choice of an exchange rate system influences the economic success of a country in transition and its gradual integration within the European Union (EU) and the European Monetary Union (EMU). For this purpose, the study focuses on the transition process of South-eastern Europe (SEE). In particular and for the first time in a joint study, we will take a look at the following South-eastern European Countries (SEECs), often referred to as the �West Balkans�: Bosnia and Herzegovina (BiH), Croatia, Former Yugoslav Republic of Macedonia (FYRM), Serbia and Montenegro, as these five countries share certain common characteristics: they were part of the Former Yugoslav Republic (FYR); they are countries in transition; they are members of the Stability Pact for South-eastern Europe and they are all potential EU-accession candidates.
How the ECB and the US fed set interest rates
(2006) Polleit, Thorsten; Belke, Ansgar
Monetary policies of the ECB and US Fed can be characterised by ?Taylor rules?, that is both central banks seem to be setting rates by taking into account the ?output gap? and inflation. We also set up and tested Taylor rules which incorporate money growth and the euro-dollar exchange rate, thereby improving the ?fit? between actual and Taylor rule based rates. In general, Taylor rules appear to be a much better way of describing Fed policy than ECB policy. Simulations suggest that the ECB?s short-term interest rates have been at a much lower level in the last two years compared with what a Taylor rule would suggest.
Instability of the Eurozone? : on monetary policy, house prices and structural reforms
(2006) Belke, Ansgar; Gros, Daniel
This paper deals with potential instabilities of the eurozone stemming from an insufficien interplay between monetary policy and reform effort on the one hand and the emergence of intra-euro area divergences on the other. As a first step, we assess the effect of EMU on structural reform and investigate this question by an examination of the relationship between fixed exchange rates and reform in two wider samples of countries. We also stress that loose monetary conditions which prevailed until some months ago can also manifest themselves in asset price inflation, notably in the housing market. When these bubbles burst, for example, when housing prices stop rising, this often leads to a prolonged period of economic instability and weakness rather than consumer price inflation. As a second step, we point out that risks for EMU are not only increasing because longer-term disequilibria become evident in fiscal and monetary policy, but also because serious divergences are now appearing within the euro area which threaten its long-term cohesiveness. The most manifest example of this threat comes from what promises to be a long-term divergence between Germany and Italy which for the time being was offset by asynchronous developments of house prices in both countries. There are still large differences within the euro area, with the small countries performing much better than the large ones on almost every indicator. This suggests that better policies can make a large difference even if monetary policy is the same for everybody. Finally, we construct a simple formal model in order to investigate whether EMU is in danger from internal tensions which could lead to severe instabilities. The experience so far has shown that some countries are continuously losing competitiveness. Is this a structural problem in the sense that these countries just have problems in keeping inflation at level that does not imply a continuing loss of competitiveness? Or is the persistence of higher inflation one can observe in some countries due to the internal dynamics of a monetary union in which any country that starts with higher inflation rate also has a lower real interest rate, which stimulates demand, and thus leads potentially to even more inflation. The purpose of our theoretical section is to discuss what the main factors are which could lead to such diverging cycles.
Money and inflation : lessons from the US for ECB monetary policy
(2007) Polleit, Thorsten; Belke, Ansgar
We turn our attention to the role of money for determining nominal magnitudes. Using US data, we find that the aggregate ?nominal output plus and stock market capitalisation? is closely related to the money stock, lending support to one of Milton Friedman?s key monetarist propositions. This finding should be particularly important for ECB monetary policy: an inflation-free euro plays a crucial role for European economic and political integration. We conclude that monetary policy must keep a very close eye on money supply if it wants to prevent consumer and asset price inflation.
Money and Swedish inflation reconsidered
(2006) Belke, Ansgar; Polleit, Thorsten
Analysing the role of money for Swedish inflation, we apply a single equation ?PStar? model and a structural VECM for the period of the late 1980 to the beginning of 2005. Against the background of theoretical and empirical considerations, we find that money ? when measured by the ?price gap? or, alternatively, the ?money overhang? ? has a statistically significant impact on future price movements. The results suggest that money should play a systematic role in monetary policy making in Sweden compared with the status quo.
Money matters for inflation in the euro area
(2006) Polleit, Thorsten; Belke, Ansgar; Kösters, Wim; Leschke, Martin
PART 1 ECB independence and price stability The success of the stability oriented monetary policy of the ECB depends on the acceptance of the bank?s institutional set-up. In this context, the ECB?s political independence seems to be of the utmost importance. However, important pillars for safeguarding the bank?s political independence ? such as, for instance, governments? adherence to the European Stability and Growth Pact and the acceptance of the division of labor between fiscal and monetary policy ? induced) financial crisis which, in turn, could have a highly negative impact on output and employment. PART 2 Monetary policy and structural reforms What role does monetary policy play for structural reform in open economies? Empirical estimations were performed with panel data for 23 OECD countries from 1970 to 2000. Structural reform was measured by the Economic Freedom of the World index, whereas the monetary policy constraints were measured by a monetary commitment index and the prevailing exchange rate regime. ? Our results provide little evidence for the hypothesis that a discretionary monetary policy promotes structural reform and economic freedom. The results strongly argue against those views maintaining that a business cycle oriented and lax monetary policy has never and nowhere been detrimental for employment. In fact, our results show that discretionary monetary policies tend to lead to a lower degree of structural labor market reform and, hence, to lower employment. That said, the ECB should pursue a medium- to long-term oriented monetary policy if it wants to strengthen growth and employment in the euro area via supporting reforms. PART 3 A critical view of the real interest rate concept The concept of the neutral (real) interest rate (NRIR) ? as implied by the Taylor rule ? recommends monetary policy to set real interest rates at a level that closes, or at least smoothes, the output gap. We argue that such a policy, if put into practice, would entail substantial pitfalls. First, monetary policy is an inadequate tool for influencing real GDP: the central bank?s impact on long-term interest rates and GDP is actually small (or not existing); to make things worse, a cyclically oriented policy would provoke the well-known time-lag problem. Second, and perhaps most importantly, the NRIR concept is not necessarily compatible with price stability, as it ignores the impact of credit and money growth on inflation. ? As a result, we are in favour of a long-term oriented monetary policy that has a strong focus on money and credit growth and asset prices. Such a monetary policy would not only be compatible with the objective of price stability. It would also reduce the risk of the economy falling into (a monetary induced) financial crisis which, in turn, could have a highly negative impact on output and employment. PART 4 ECB monetary policy and euro inflation outlook Even at a main refinancing rate of 3.25%, ECB monetary policy remains very expansionary. We forecast annual HICP inflation in 2007 to be 2.3% on average (including the German VAT hike). Due to strong excess liquidity, annual consumer price inflation is likely to remain at 2.3% in 2008. We recommend raising ECB rates further to around 4.0%, for reducing credit and money supply growth, thereby dampening inflationary pressure. ? Our money demand analyses for the euro area suggest that, in recent years, excess liquidity might have been translating in great part into asset price inflation rather than consumer price inflation. The results indicate that headline M3 growth is actually much more closely related to the ongoing loss of purchasing of money power of the euro ? that is consumer and asset price inflation ? than may be widely believed. That said, for keeping inflation in check it seems advisable for the ECB to set interest rates in line with the signals provided by (trend) money supply (excess liquidity).
Nobelpreis für Wirtschaftswissenschaften 2006 an Edmund S. Phelps
(2006) Polleit, Thorsten; Geisslreither, Kai; Belke, Ansgar
Am 9. Oktober dieses Jahres gab die Königlich Schwedische Akademie der Wissenschaften (KVA) bekannt, dass der Ökonom Edmund S. Phelps mit dem Wirtschaftsnobelpreis ausgezeichnet wird. Der vorliegende Beitrag stellt die wissenschaftlichen Leistungen von Phelps vor und ordnet sie in den makroökonomischen Gesamtkontext ein. Phelps? Arbeiten haben signifikant zur Verbesserung der Theorie des makroökonomischen Politik-Designs beigetragen. Von ihm ging die Idee einer um Erwartungen modifizierten Phillips-Kurve aus; diese trug dazu bei, den Konflikt zwischen Inflation und Beschäftigung als ?Scheinkonflikt? zu entlarven. Phelps lieferte somit einen bedeutenden Beitrag für die Mikrofundierung der Makroökonomik. Phelps? zweite bedeutende makroökonomische Innovation war die Entdeckung der goldenen Regel der Kapitalakkumulation. Auch sie birgt wichtige Politikimplikationen. Die Auszeichnung von Edmund S. Phelps ist ein folgerichtiger Schritt zur Würdigung eines Ökonomen, der die moderne Makroökonomik in umfassender Weise geprägt hat.
Reforms and foreign direct investment : possibilities and limits of public policy in attracting multinational corporations; a multiple case study of Romania and Croatia
(2009) Zühlke, Dietmar; Belke, Ansgar
I. Introduction: This thesis analyzes the impact of reforms in Romania and Croatia on the inflow of Foreign Direct Investment (FDI) by German and Austrian Multinational Corporations (MNCs). The research questions are: (1) What role can public policy play in transition countries in attracting FDI, (2) what influence does public policy in transition countries have on the investment decision of MNCs, (3) how successful have investment policies been in Romania and Croatia, (4) what influence do different political actors have on FDI, and (5) what can be learnt from a cross-country analysis? II. Theoretical approach: This dissertation is based on two theoretical pillars: The theory of locational competition is well-suited to analyze both perspectives of potential investors and state actors. Furthermore, it includes the consideration of interdependences of different determinants as well as of trade-offs of political measures and decisions. The NIE is well-suited to categorize FDI measures and to analyze actions and time constraints of individual actors. III. Methodological approach: The analysis is focused on FDI in Romania and Croatia. It follows the case study approach and is based empirically on expert interviews. The analysis of Romania and Croatia is rewarding in particular since both countries belong to the most important FDI recipients of South East Europe and have not been analyzed in this combination so far. The qualitative analysis allows drawing country-comprehensive conclusions and can demonstrate to what extent EU candidate countries can learn from new EU member states. The case study approach enables the use of different types of sources and is open to the consideration of different research disciplines. The author conducted 90 expert interviews. Interviewees were on investors as well as state representatives. The transcript protocols comprise more than 400 pages and the consolidated case study database contains more than 6,700 expert statements. Furthermore 40 state and company documents were evaluated with a total of over 1,900 pages. IV. Key research results: The interview analysis leads to a definition of three dimensions of legal, economic and political determinants that comprise a total of 14 determinants and 29 sub-determinants. The subsequent analysis of the determinants allows answering the research questions above. (1): Political determinants are of key importance of the inflow for FDI into transition countries. States have to provide a minimum quality level for certain determinants in order to be considered as potential investment location at all (e. g. regarding property rights). (2): The analysis of the 29 sub-determinants shows that FDI is influenced by a multitude of determinants. They are considerably dependent on the perception of the MNCs. The most important determinants for transition countries are privatization, EU integration, internal political stability, property law, regional differences in bureaucracy, and the country image. (3) Romania did not start until the end of the 1990s and did not accelerate until 2004. Today Romania benefits, amongst other things, from a sound legal system and a liberal company registration. An important remaining problem is the weak infrastructure. Croatia started gradual reform after the death of Tudman. The political and economic stability as well as the positive country image represent important pull factors for FDI in Croatia. Property law constraints and bureaucratic obstacles are remaining investment barriers. For transition countries in general the removal of bureaucratic hurdles (such as registration times) as well as the reduction of uncertainties appears to have the greatest impact on FDI. MNCs then even seem to accept somewhat higher costs (e. g. for simple customs procedures). The ?race to the bottom? that is often worried about seems less realistic than a ?race for quality?. (4): 6 groups of state actors were identified who influence the inflow of FDI: central government and authorities, local governments and authorities, courts, and the EU. It was that central governments are the most influential actors group overall. Local authorities are of particular importance for follow-up investments. (5): The catching up of Romania in recent years has turned this country into a role for EU accession candidates in different areas (e. g. regarding the reforms of the local bureaucracy). Croatia?s reforms were less speedy due to the impact of the war and ? to some extent ? because it relied too much on its high living standards. The accession process will be an important vehicle for Croatia ? even more than for Romania ? in order to overcome the remaining deficiencies.
The bazaar economy hypothesis revisited : a new measure for Germany's international openness
(2007) Wang, Lars; Belke, Ansgar; Mattes, Anselm
In this paper we argue that traditional measures of openness of an economy usually overstate the actual degree. This is due to the fact that traditional export or import shares are measured as a share of the gross domestic product. The former are expressed in gross terms, the latter in value added terms. In this way the actual interdependences between economies are overstated. We develop a new value based openness indicator that includes interregional and interindustrial dependencies. Based on a Leontief production system and input-output-tables we argue that export-induced imports of intermediate parts must be subtracted of the value of exports in order to obtain the real value added in the export sector. The same reasoning applies to the import side. We use these measures of actual openness to calculate openness indicators for Germany using GTAP data. We show that traditional measures of openness exaggerate the actual openness and argue that these new indicators are an important contribution to the debate about the German ?bazaar economy?.
Trade and FDI flows in the international economy
(2009) Spies, Julia; Belke, Ansgar
During the past decades, globalisation in all of its facets dominated many controversial debates of political leaders and common citizens and called the predominant attention of the international press and the scientific community. A major phenomenon in this context is the ongoing internationalisation of the economic activities of firms. The simultaneous interest in Foreign Direct Investment (FDI) and trade can be attributed to the fact that the two modes at times complement each other or conduce to alternatives in serving a foreign market. This thesis highlights some of the crucial questions that arise in this context. In Chapter 2, a new version of a theory-based gravity equation is developed to properly account for the relative price indices initially proposed by Anderson and van Wincoop (2003). The partially time-varying character of the multilateral resistance variables overcomes the bias present in earlier studies that solely rely on country or country pair fixed effects. Applying the augmented gravity equation to the process of EU integration during the 1990s, robust evidence is found that the Free Trade Agreements (FTAs) with the Central and Eastern European Countries (CEECs) have substantially increased intra-group trade, in the case of the Czech and Slovak Republic and Slovenia at the expense of the Rest of the World (ROW). Since decreasing multilateral trade resistance negatively influences a country?s bilateral imports but may be positively correlated with a bilateral FTA, earlier East-West studies, which ignore the relative price term?s time-varying character, tend to report downward biased coefficients. Indeed, the results indicate that once we correct for the omitted variable bias, the FTAs with the CEECs created between 7 and 20 percentage points more new trade compared to the scenario where only time-invariant country pair effects were included. Chapter 3 highlights the trade effects of monetary integration in Europe. The purpose is to assess the implications of the Economic and Monetary Union (EMU) accession of eight CEECs on their share of EMU-12 imports. Overcoming biases related to endogeneity, omitted variables and sample selection, the results indicate that the common currency has boosted intra-EMU imports by 7%. Under the assumption that the same relationship between the explanatory variables and imports will hold for EMU-CEEC trade, one can predict the future impact of the Euro. The findings of this exercise suggest that except for the least integrated countries, Poland, Latvia and Lithuania, all CEECs can expect increases in the EMU-12 import share. Chapter 4 assesses the determinants of location choices of foreign multinational firms at the level of German federal states. Based on a monopolistic competition model, firms decide for a certain location if the expected profits are higher than the profits associated with all other available locations. A conditional and a nested logit model resemble the structure of the location choice process of individual investors well. By using affiliate-level data between 1997 and 2005, the results confirm that firms react positively to local demand, a common border and existing firm networks, while unit labour costs exhibit the expected negative impact. These effects vary in their relevance across manufacturing and service affiliates, and between upstream and downstream activities. This thesis confirms that the determinants and effects of the internationalisation of economic activities are multifaceted. There are several interesting directions for future research that pick up aspects studied in Chapters 1 to 3. Only very recently, researchers started to investigate the particularities of cross-border activities within the service sector and the influence of (exchange rate) uncertainty on foreign investments. These issues will give new insights into the determinants of FDI flows and the prerequisites and impacts of FTAs and currency unions that may complement, weaken or strengthen the points made in the present thesis.

Browse

Browsing Institut für Volkswirtschaftslehre (bis 2010) by Person "Belke, Ansgar"