An Empirical Investigation of the Determinants of the Location of Foreign Direct Investment in the Central and Eastern European Countries Using Multilevel Data

This paper employs a novel multi-level data set and a multinomial logit model - to examine the factors explaining 1,223 foreign investment location decisions by firms in the EU(15), Japan, Norway, Russia, Switzerland and the US in 12 Central and Eastern European countries (CEECs). The highly significant empirical results, based on a general underlying model of imperfect competition, show that the responsiveness of foreign direct investment in the CEECs to country-level variables differs significantly both across sectors and across firms of different sizes and profitability. In particular, in addition to the traditional importance of market size and distance, firm size and the effective corporate tax rate are also important for the location of investment.Multi-level data, foreign direct investment, multinomial logit model

Recent evidence on the impact of electricity liberalisation on consumer prices

This report reviews recent evidence on the impact of the Electricity Directive on prices

Methodological Aspects of Environmental Labour Market Analysis

High and persistent unemployment rates and increasing awareness of environmental degradation in many industrial countries have promoted the interest in the labour market effects of environmental policy. Environmental labour market analysis is fraught with many difficulties, however. Being unaware of these problems may result in misunderstandings and mislead policy makers. In environmental labour market analysis two kinds of questions have to be distinguished: firstly, accounting for the number of persons working directly or indirectly for environmental protection activities and secondly, identifying the net effect of environmental policy on the labour market balance. Answering the first question is not conceptionally contentious. However, elaborating quantitative estimates poses a variety of problems of delimitation and data collection which are discussed in some detail in section 2. This section also presents the results of studies assessing environmental employment in Germany in various dimensions. Section 3 deals with problems arising when one attempts to answer the question of how many additional jobs are created through environmental policies. This requires an assessment of secondary economic effects of environmental policy the size and even the direction of which depend on a variety of framework conditions in a complex way. Quantitative estimates can only be based on model simulations; thus the features of the models applied become crucial for the results. Some rules for making such estimates are discussed. The most important mechanisms to be taken into account are presented. Some examples of empirical studies for Germany are presented in order to illustrate the argument. The most important conclusion we draw is that the delimitations, methods and assumptions underlying any estimates of the labour market effects of environmental policy have to be clearly stated.

European Monetary Union: Nominal Convergence, Real Divergence and Slow Growth? An investigation into the effects of changing macroeconomic policy institutions associated with monetary union

It is by now widely accepted that the structural characteristics of the countries to become the euro area did not adhere to the conditions of an optimum currency area (OCA) when the euro was introduced in 1999. However, the satisfaction of OCA criteria may not be required for a workable currency union, because the criteria have to rely on a very restrictive concept of money and their satisfaction may be largely endogenous to shifts in the economic policy regime. Growth and convergence of prosperity across a currency union rather depend on the appropriate macroeconomic policy institutions. Therefore, in this paper the effects of the new EMU institutional framework for monetary, fiscal and wage policies on overall growth and on convergence across the euro area are analysed. It is concluded that not only the period of nominal convergence towards EMU but also the initial period of the euro area has suffered from a rather restrictive macroeconomic policy mix which has neither been conducive to aggregate growth nor to real convergence across the euro area. In order to improve growth and convergence some major institutional reforms seem to be required.European Monetary Union, nominal convergence, real convergence, macroeconomic policy mix

Money, interest, and capital accumulation in Karl Marx's economics: A monetary interpretation

Starting from Schumpeter.s important distinction between .real analysis. and .monetary analysis., in this paper it is shown that major elements of Marx.s economic theory fall in the camp of monetary analysis and the implications for Marx.s theory of capital accumulation are derived. First, Marx.s theory of labour value has to be considered a .monetary theory of value. because .abstract labour. as the social substance of value cannot be measured without a social standard of value. Money as a social representative of value, therefore, is introduced at the very beginning of Marx.s microeconomics. Marx.s rejection of Ricardo.s interpretation of Say.s Law requires that money as a means of circulation and as a means of payment is nonreproducible and therefore cannot be a commodity. Second, in the schemes of reproduction it becomes clear, that the realisation of profits for the capitalist class as a whole requires money advances, which have to increase by means of rising credit in a growing economy. Third, the rate of interest in Marx.s economics is conceived of as a monetary category determined by relative powers of financial and industrial capitalists. Therefore, similar to post-Keynesian theories of distribution and growth, the rate of capital accumulation is determined by the expected rate of profit and the exogenous rate of interest. From this it follows, that any .real theory. of crisis and stagnation, as the falling rate of profit theory of crisis, cannot be sustained within Marx.s monetary analysis. --Money,interest,capital accumulation,Marx's economics

1933 and 1977 - Some Expansion Policy Problems in Cases of Unbalanced Domestic and International Economic Relations

Lecture to the memory of Alfred Nobel, December 8, 1977international trade;