Browsing by Subject "F15"

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  • Fidrmuc, Jarko; Korhonen, Iikka (2004)
    BOFIT Discussion Papers 20/2004
    Published in Journal of Comparative Economics, Vol.34, No.3 (2006), pp. 518-537
    We review the literature on business-cycle correlation between the euro area and Central and Eastern European countries (CEECs), a topic that has gained attention in recent years as new EU entrants prepare for participation in the monetary union.Our meta-analysis suggests several CEECs already have comparably high correlation with the euro area business cycle.We also find that estimation methodologies can have a significant effect on correlation coefficients.While central bankers are more conservative in their estimates, we find no evidence of a geographical bias in the studies.JEL-Numbers: C42, E32, F15, F31.Key words: monetary union, optimum currency area, business cycles, meta- analysis.
  • Crowley, Patrick M.; Schultz, Aaron (2010)
    Bank of Finland Research Discussion Papers 16/2010
    Convergence and synchronisation of business and growth cycles are important issues in the efficient formulation of euro area economic policies, and in particular European Central Bank (ECB) monetary policy. Although several studies in the economics literature address the issue of synchronicity of growth within the euro area, this is the first to address the issue using cross recurrence analysis. The main findings are that member state growth rates had largely converged before the introduction of the euro, but there is a wide degree of different synchronisation behaviours which appear to be non-linear in nature. Many of the euro area member states display what is termed here intermittency in synchronization, although this is not consistent across countries or members of the euro area. These differences in synchronization behaviors could introduce further challenges in managing the country-specific effects of the common monetary policy in the euro area. Keywords: Euro area, business cycles, growth cycles, recurrence plots, nonstationarity, complex systems, surrogate analysis. JEL classification numbers: C65, E32, F15 Note: A previous shortened version of the second part of this paper was previously published as Crowley (2008).
  • Gluschenko, Konstantin; Kulighina, Darya (2006)
    BOFIT Discussion Papers 3/2006
    Published in Journal of Economic Studies, Volume 37, Issue 4/2010
    Perfect integration eludes the real world, so we suggest a realistic benchmark standard for judging the extent of market integration in various economies.We estimate the degree of integration in the US product market, widely acknowledged to be the most integrated among geographically large economies, so as to provide a reference for measuring Russian market integration. Prices for 27 grocery items across 29 cities of the United States in the first quarter of 2000 are used as empirical data.The estimated degree of integration turns out to be very close to values obtained for Russia for 2000.Apparently, market integration in Russia has in recent years moved toward conditions found in advanced market economies.The roles of other factors that could potentially cause segmentation of the US market are also analyzed. JEL Classification: F14, F15, L81, R1 Keywords: market integration, price dispersion, law of one price, United States, Russia
  • Gächter, Simon; Riedl, Alesandra; Ritzberger-Grünwald, Doris (2013)
    BOFIT Discussion Papers 3/2013
    We analyze business cycle convergence in the EU by focusing on the decoupling vs. convergence hypothesis for central, eastern and south eastern Europe (CESEE). In a nutshell, we find that business cycles in CESEE have decoupled considerably from the euro area (EA) during the financial crisis in terms of both cyclical dispersion (i.e. the deviation of output gaps) and cyclical correlation. The results are mainly driven by smaller countries, which can be explained by the fact that small economies seem to have larger cyclical swings as they are more dependent on external demand, which causes a decoupling in terms of higher output gap deviations from the EA cycle in times of economic crises. At the same time, this does not necessarily affect business cycle synchronization as measured by cyclical correlations, where the strength of the linear relationship of two cycles is measured. However, despite the recent declines in the co-movement, we generally observe high correlation levels of CESEE countries with the EA after their EU accession in 2004. Finally, we find a significant decoupling of trend growth rates between EA and CESEE until the onset of the financial crises. Since the beginning of the crisis, trend growth rates have declined both in CESEE and the EA with the trend growth differential decreasing significantly from about three to below two percentage points in 2011. JEL classification: E32, E52, F15, F33, F44; Keywords: Business cycles, EMU, CESEE, optimum currency areas
  • Poměnková, Jitka; Fidrmuc, Jarko; Korhonen, Iikka (2014)
    BOFIT Discussion Papers 5/2014
    Published in Applied Economics Letters, Vol. 21, Issue 18, 2014 pp. 1309-1313 as "Wavelet Spectrum Analysis of Business Cycles of China and G7 Countries" .
    We employ a wavelet spectrum analysis to study globalization and business cycles in China and G7 countries. The co-movement synchronization between G7 countries and China is shown to have undergone frequent and large changes during our sample period. The co-movements for business cycle frequencies are generally different from those for other frequencies, and synchronization with China's business cycle differs as between G7 countries. In recent years Japan, Germany and Italy seem to have the closest synchronization at business-cycle frequency. We find a significant relationship between the time-varying wavelet measure of synchronization and trade only for business-cycle frequencies. The co-movements at longer frequencies are negatively related to trade, so that the overall co-movements and trade tend not to be significantly related. Keywords: Globalization, business cycles, synchronization, trade, wavelet analysis. JEL-Codes: E32, F15, F41.
  • Fidrmuc, Jarko; Korhonen, Iikka; Bátorová, Ivana (2008)
    BOFIT Discussion Papers 7/2008
    Published in CESifo Economic Studies, Vol. 59, 2/2013, 392-411
    We analyze the business cycles in China and in selected OECD countries between 1992 and 2006 using dynamic correlations. Nearly all OECD countries showpositive correlations of the very short-run developments which may correspond to intensive supplier linkages. However, dynamic correlations at the business cycle frequencies are negative. Countries facing a comparably longer history of intensive trading links tend to show slightly higher correlations of business cycles with China. Even though trade and financial flows do not really increase correlations of business cycles between China and OECD countries, they lower the degree of business cycle synchronization within the OECD area. JEL Classification: E32, F15, F41. Keywords: Business cycles, synchronization, trade, FDI, dynamic correlation.
  • Leinonen, Harry (2009)
    Bank of Finland. Expository studies. A 113
    This publication consists of seven studies on retail payment issues presented as preliminary versions at the annual Bank of Finland Payment Habits Seminar in 2008. Interest in retail payment services has recently been growing at a fast pace among authorities and the general public. For this, there are several reasons: developments in technology, changes in the competitive framework and globalization. Authorities have become increasingly concerned about the efficiency and standardization issues of retail payments. A key topic of research appears to be the extent to which the payment habits of the general public can and should be switched to options that are more efficient for the society as a whole, as well as the means of achieving this. The current marketing setup seems to bias customers against change and to promote the use of legacy solutions and old habits instead of the modern solutions. However, recent trends for change seem to be pointing in new directions for the evolution of payment habits. Keywords: payment services, payment costs and pricing, card payments, electronic and mobile payments JEL classification numbers: G10, G18, F15, H4, L86, 033
  • Pekkala Kerr, Sari; Kerr, William; Özden, Çağlar; Parsons, Christopher (2017)
    Bank of Finland Research Discussion Papers 2/2017
    Forthcoming in Journal of Economic Perspectives
    The global distribution of talent is highly skewed and the resources available to countries to develop and utilize their best and brightest vary substantially. The migration of skilled workers across countries tilts the deck even further. Using newly available data, we first review the landscape of global talent mobility, which is both asymmetric and rising in importance. We next consider the determinants of global talent flows at the individual and firm levels and sketch some important implications. Third, we review the national gatekeepers for skilled migration and broad differences in approaches used to select migrants for admission. Looking forward, the capacity of people, firms, and countries to successfully navigate this tangled web of global talent will be critical to their success.
  • Pekkala Kerr, Sari; Kerr, William; Özden, Çağlar; Parsons, Christopher (2017)
    Bank of Finland Research Discussion Papers 7/2017
    This paper reviews recent research regarding high-skilled migration. We adopt a data-driven perspective, bringing together and describing several ongoing research streams that range from the construction of global migration databases, to the legal codification of national policies regarding high-skilled migration, to the analysis of patent data regarding cross-border inventor movements. A common theme throughout this research is the importance of agglomeration economies for explaining high-skilled migration. We highlight some key recent findings and outline major gaps that we hope will be tackled in the near future.
  • Pula, Gabor; Santabárbara, Daniel (2012)
    BOFIT Discussion Papers 23/2012
    There is an ongoing debate in the literature about the quality content of Chinese exports and to what extent China imposes a threat to the market positions of advanced economies. While China's export structure is very similar to that of the advanced world, its export unit values are well below the level of developed economies. Building on the assumption that unit values reflect quality the prevailing view of the literature is that China exports low quality varieties of the same products than its advanced competitors. This paper challenges this view by relaxing the assumption that unit values reflect quality. We derive the quality of Chinese exports to the European Union by estimating disaggregated demand functions from a discrete choice model. The paper has three major findings. First, China's share on the European Union market is larger than would be justified only by its low average prices, implying that the quality of Chinese exports is high compared to many competitors. Second, China has gained quality relative to other competitors since 1995, indicating that China is climbing up the quality ladder. Finally, our analysis on the supply side determinants reveals that the relatively high quality of Chinese exports is related to processing trade and the increasing role of global production networks in China. Keywords: Chinese exports, vertical product differentiation, quality ladder, global production networks, discrete choice model, COMEXT database JEL Classification: F1, F12, F14, F15, F23
  • Crowley, Patrick M. (2008)
    Bank of Finland Research Discussion Papers 3/2008
    Optimal currency area theory suggests that business cycle co-movement is a sufficient condition for monetary union, particularly if there are low levels of labour mobility between potential members of the monetary union. Previous studies of co-movement of business cycle variables found that there was a core of member states in the EU that could be grouped together as having similar business cycle co-movements, but these studies have always used Germany as the country against which to compare. This study updates and extends corresponding previous analyses. More specifically, it correlates the countries against both German and euro area macroeconomic aggregates and uses more recent techniques in cluster analysis, namely model-based clustering techniques. Keywords: business cycles, co-movement, optimal currency areas, model-based cluster analysis JEL classification numbers: F15, F31
  • Leinonen, Harry (2008)
    Bank of Finland. Expository studies. A 111
    Payment services are constantly developing. However, current payment methods have developed out of paper-based services during a period with severe limitations on ICT resources. These limitations have now almost entirely disappeared, and customers are interested in new forms of digitalised and integrated payment instruments. Within the payment industry, we can see a trend towards internationally standardised network-based services, as in several other similarly ICT-dependent industries. This publication seeks to summarise current development trends, user demands, cost and pricing issues, technology and business trends as well as official views on payment developments. It endeavours to identify the most important factors affecting future payment habits for the period post-2010. Based on the analysis, technological developments will support completely integrated electronic payments processed in real time. The mobile phone seems likely to become an important device for initiation and acceptance of payments. The information conveyed as part of a payment transaction will be extended to encompass all information necessary for further and later use (for example, ordering and invoicing data). However, the prevailing practice of widespread (cross-)subsidisation makes it hard for end-users to perceive the actual cost differences between alternative means of payment, thus delaying the adoption of more efficient payment habits. The current market structures also contain strong barriers to competition in the form of monopoly, oligopoly or service provider cooperation. Official measures by authorities to increase competition along the lines of modern policies for other network industries would speed up developments in payment services as well. Keywords: payment services, electronic payments, payment trends, future payment instruments JEL classification: G10, G18, F15, H4, L86, O33
  • Korhonen, Iikka (2001)
    BOFIT Discussion Papers 9/2001
    Published in Economics of Transition vol 11, no 1 (2003), pp. 177-196
    This note looks at the correlation of short-term business cycles in the euro area and the EU accession countries.The issue is assessed with the help of vector autoregressive models.There are clear differences in the degree of correlation between accession countries.For Hungary and Slovenia, euro area shocks can explain a large share of variation in industrial production, while for some countries this influence is much smaller.For the latter countries, the results imply that joining the monetary union could entail reasonably large costs, unless their business cycles converge closer to the euro area cycle.Generally, for smaller countries the relative influence of the euro area business cycle is larger.Also, it is found that the most advanced accession countries are at least as integrated with the euro area business cycle as some small present member countries of the monetary union.Keywords: optimal currency area, monetary union, EU enlargement JEL classification: E32, F15, F42
  • Niemi, Riku (2016)
    BOFIT Policy Brief 1/2016
    Russia, Kazakhstan, and Belarus established the Eurasian Customs Union in 2010. Five years later, it became the Eurasian Economic Union. External tariffs have been harmonised and some internal trade barriers have been tackled. Most notably, internal border controls had been abolished by July 2011. This policy brief brings together facts and data on recent changes in trade-related institutions, trade barriers and trade flows across the internal and external borders of the Union. Trade barriers and flows are analysed at the level of product categories. The purpose is to identify the countries and sectors where the greatest trade creation or diversion is likely to have taken place and whether notable changes can be observed.
  • Funke, Michael; Zhong, Doudou (2020)
    BOFIT Discussion Papers 19/2020
    The political hyperglobalisation trilemma asserts that a government cannot simultaneously opt for deep international integration, national sovereignty and democratic politics, but rather is constrained to choosing two of the three at most. This paper presents a new and comprehensive cross-country panel dataset operationalising the multifaceted three vertices of the trilemma. After an explorative data analysis, we employ panel error-correction techniques to uncover the mutual interdependencies among the variables in the system. The econometric evidence supports the existence of a long‐run relationship between economic integration, national sovereignty and democratic politics as postulated in the political globalisation trilemma.
  • Funke, Michael; Ruhwedel, Ralf (2003)
    BOFIT Discussion Papers 17/2003
    Published in China Economic Journal, 2008, Volume 1 (2): 203-212
    We calculate welfare gains of trade liberalization in the Central and East European transition economies, following the approach of Romer (1994), who emphasized that proper modeling of the impact of trade restrictions on the number of available product varieties is crucial to quantifying the welfare impact of trade liberalization. The empirical work relies on direct measures of product variety calculated from 5-digit trade data.Although the issue is far from settled, the emerging conclusion is that freer trade has boosted welfare. Trade Liberalization, Product Variety, Welfare, Transition Economies D60, F14, F15
  • Herrala, Risto; Orlandi, Fabrice (2021)
    Asia & Global Economy 1 ; January
    We study the global impact of the Chinese economy based on a novel indirect approach where the spillover effect is quantified from a forecast error model under relatively favorable identifying conditions. Findings from the real-time World Economic Outlook data over the period 2004 ̶ 2015 indicate that an increase in economic growth in China had a negative impact on most other economies one to two years ahead. The estimations furthermore uncover evidence at the global level that spillover propagated by influencing prices, including global commodity prices, which tend to increase in reaction to accelerating economic growth in China.
  • Herrala, Risto; Orlandi, Fabrice (2020)
    BOFIT Discussion Papers 4/2020
    Published in Asia and the Global Economy, Volume 1, Issue 1, January 2021
    We study the global impact of the Chinese economy based on a novel indirect approach where the spillover effect is quantified from a forecast error model under relatively favorable identifying conditions. Findings from the real-time World Economic Outlook data over the period 2004 - 2015 indicate that an increase in economic growth in China had a negative impact on most other economies one to two years ahead. The estimations furthermore uncover evidence at the global level that spillover propagated by influencing prices, including global commodity prices, which tend to increase in reaction to accelerating economic growth in China.