“An Empirical Law about Regional Unemployment in Eastern Europe”

The paper surveys the theoretical and empirical literature on regional unemployment during transition in Central and Eastern Europe. The focus is on Optimal Speed of Transition (OST) models and on comparison of them with the neoclassical tradition. In the typical neoclassical models, spatial differences essentially arise as a consequence of supply side constraints and institutional rigidities. Slow-growth, high-unemployment regions are those with backward economic structures and constraints on factors mobility contribute to making differences persistent. However, such explanations leave the question unanswered of how unemployment differences arise in the first place. Economic transition provides an excellent testing ground to answer this question. Prefiguring an empirical law, the OST literature finds that the high degree of labour turnover of high unemployment regions is associated with a high rate of industrial restructuring and, consequently, that low unemployment may be achieved by implementing transition more gradually. Moreover, international trade, FDI and various agglomeration factors help explain the success of capital cities compared to peripheral towns and rural areas in achieving low unemployment

“Romania-EU Actual and Potential Trade”

This is a companion paper to Ferragina, Giovannetti and Pastore (2005) and focuses on Romania-EU actual and potential trade. The Romanian trade potential with five EU members (France, Germany, Italy, Spain and UK) is computed using an “out-of-sample” methodology for the period 1995-‘01. The coefficients are taken from panel estimators of the gravity equation relative to intra-EU15 trade. The analysis suggests the existence of an important unexploited trade potential with Romania, which, nonetheless, is not different in size from that of other CEECs. The potential to actual trade ratio ranges from 2.2 to 2.7 and is sharply declining, suggesting that further dramatic economic integration is to be expected in the near future

Youth labour market performance in European regions

Youth labour market, Regions, Eastern and Western EU countries, J21, J13, R23, P50,