Institutional diversity in the euro area: Any evidence of convergence?

In recent years differences in the institutional structure across euro area countries are becoming a cause of concern both for some individual Member States and for the functioning of the Economic and Monetary Union (EMU). From a global competitiveness perspective, we deal with the diversity in the institutional environment in the EMU. In particular, we assess whether the changes in the state of institutions provide convergence across euro area countries between 2006 and 2015. In addition, among the institutional indicators considered, we compute which institutional aspect contributes more to overall inequality in the state of institutions, as well as the contribution of each country to inequality considering as benchmark the country with the highest institutional quality. According to these country contributions, we highlight distinct patterns of convergence between ‘core’ and ‘periphery’ euro area countries and raise potential links between the institutional changes across euro area countries and both the differences in the intensity of the financial and economic crisis, and the policy responses in terms of fiscal consolidation applied by the respective national governments.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

A rapaza das cabras

El artículo cuenta con la colaboración de Mikel Oleaga (Agranda la Olla), Edu Balsells Martínez (Asociación La Gaiata), Daniel Morante e Isara Belinfanta (Cel i Sol), Aitor Azkarate (Jauregia Esnekiak), Daniel Mercader (Camp de la sort) y Lidia Fanjul y Sebastián Burch.Engarzados por lo que nos transmiten, presentamos en este artículo los sentimientos y motivos que a mucha gente joven mueven hacia el campo como medio de vida. Porque estaban, o porque quieren disfrutarlo. Se puede apreciar en cada palabra

Mapping the ICT in EU Regions: Location, Employment, Factors of Attractiveness and Economic Impact

Factual evidence suggests that ICT-led growth and ICT-producing sectors are strongly localised geographically. Given that the nature of ongoing technological change and innovation dynamics has a strong local/regional component, public policies need to be designed at this level as well. However, little is known - if anything - of the regional impact of ICT. The present study documents the regional impact of ICT by mapping the location of the ICT industry in the EU25, analysing the volume and nature of ICT employment across European regions, identifying the determinants of EU regions’ attractiveness for ICT business location and, finally, assessing the contribution of ICT investment to regional growth and convergence. The study provides evidence for the prominent role played by the Computing Services sector in recent employment and skills' changes in the ICT industry, as well as for the emergence of new regional growth poles in the EU. Departing from traditional business models, this sector of activity presents relatively low sunk costs, especially in terms of physical capital requirement while having strong innovative and skills content, opening-up new opportunities for regional development in the EU. These factors also seem to explain much of the recent trends in ICT multinationals firms' location over the past decade. The study also shows that ICT capital investment tends to promote regional economic convergence. Regional policies aiming to promote regional cohesion must therefore consider ICT diffusion as a potentially important tool for the promotion of convergence throughout the EU. Importantly, ICT diffusion should also be accompanied by other policies and, in particular, policies aiming at improving education and skills levels. The study also shows that the absence of high ICT specialisation should not be seen as a major barrier to promoting the impact of ICT on regional development.Information and Communication Technologica, European Union, Regions, Location, Employment, Qualifications Atractiveness

Expansion of the current methodology for the study of the short-term liquidity problems in a sector

Purpose: The aim of this work consists of defining and applying a new methodology for the calculation of short-term financial ratios that more reliably approximate the solvency of a sector. Design/methodology: We begin with a classic sector analysis and propose the creation of ratios that limit the debt repayment on an individual level and that do not imply the compensation of aggregate balances, as occurs with the current formulas of calculation. Findings: The new methodology more reliably approximates the solvency of a sector by being able to estimate with greater precision its global capacity for short-term debt repayment. Research limitations: The limitations to the proposed sector ratios are the same as the limitations of the customary individual ratios. Therefore, to offer an example, the ratios do not correct the assumption that the only source of resources to meet current liabilities is made up by available and liquid assets. In other words, no new tools are proposed to include future income from sales by the companies. Practical implications: To be able to study the solvency of the different sectors that make up the economy with more uniform criteria. Social implications: The information provided by the new ratios obtained in this work proves to be relevant information in the case of wanting to determine the degree of dependence of companies in a sector on financial institutions, or in the case of wanting to determine the degree of dependence on aid in a subsidized sector. Originality/value: The proposal of new tools that go beyond the current limitations.Peer Reviewe

Who takes the cake Effects of ECB monetary policy across income classes

This work provides evidence on the effects of monetary policy on the income class structure via stimulating economic activity and employment in Eurozone countries over the period 2007Q32016Q1. Based on European Union Statistics on Income and Living Conditions (EU-SILC) data, we compute the share of the market income perceived by each income class (lower, lower-middle, upper-middle, and upper) for the states that originated the Economic and Monetary Union (EMU11). We analyse the impact of monetary policy impulses under a Bayesian Vector Autoregressive approach and find that a monetary easing shock involving a decrease in nominal interest rates tends to increase the income share of middle classes at the expense of a smaller income share of the upper class, while, the lower class is not significantly affected. Our findings highlight the identified effects are mostly triggered by short-term interest rates cuts as long as they tend to vanish as the monetary policy proxy is located further in the yield curve. This suggests that the egalitarian impacts of monetary policy on market income distribution are to a lesser extent driven by decisions modifying longer-term interest rates.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

Multidimensional poverty in the EU: rethinking AROPE through a multi-criteria analysis

At risk of poverty or social exclusion rate (AROPE) constitutes the pivotal indicator of living conditions and poverty in the European Union. Nevertheless, as a multidimensional poverty measure, it has some drawbacks that significantly reduce its utility. In this paper, we propose an alternative multi-criteria approach that provides some innovations for the computation of multidimensional poverty in the European countries. We first propose a normalization formula for each dimension by using a double point of reference. We then put forward alternative aggregation functions that permit diverse degrees of substitutability across dimensions. This new formulation allows us to go beyond focusing merely on the rate of people classified as AROPE, making it possible to evaluate aspects such as the intensity of multidimensional poverty and how changes over time are distributed across population in terms of shared prosperity, as showed in an illustration for the EU28 countries.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tec

Monetary policy and middle class

The global financial crisis of 2007-2008 and the subsequent period of financial and economic instability have forced central banks to implement ultra-loose monetary policies for combating the downturn and the stagnation of inflation, which has led the question about how monetary policy might affect inequality to the foreground of economic and political debates. This paper attepts to evaluate how monetary policy implemented in the Euro area (EURO-11) has affected two aspects of income distribution, namely, the size of middle class dimension and its mobility. To this end, an econometric model is estimated based on data from 2003 to 2015 for the set of countries belonging to the Economic and Monetary Union that originated the Union (EMU1999). We apply the vector autoregressive (VAR) methodology to country-level panel data as a first approach of the short-term dynamics among the considered variables, where the impulse-response functions have been orthogonalized due to the existing serial correlation between the unobserved terms. Subsequently, this analysis is complimented with a more robust one. Since our variables are non-stationary but indeed co-integrated, the vector error correction model (VECM) allows us to consider the medium-term relationship between monetary policy and income inequality via the stimulus of the economic activity.Universidad de Málaga. Campus de Excelencia Internacional Andalucía Tech

How does monetary policy affect the income class structure? Evidence from the Eurozone.

This work provides evidence on the potential effects of monetary policy on the income class structure via stimulating economic activity and employment in the Eurozone countries over the period 2007Q3-2016Q1. Based on European Union Statistics on Income and Living Conditions (EU-SILC) data, we compute the size of income classes (lower, lower-middle, upper-middle, and upper) for the stats that originated the Economic and Monetary Union (EMU-11) and analyse the impact of monetary policy impulses under a Bayesian Vector Autoregressive approach. We focus on the earnings heterogeneity and the income composition channel and find that a monetary easing shock involving a decrease short-term nominal interest rate has diverse effects on the different income classes, which seems to have led to a more equal income distribution. As theoretically argued by these monetary policy transmission mechanisms, our results confirm the GDP growth and the decrease in unemployment caused by the monetary policies implemented by the European Central Bank since the onset of the financial crisis have had a positive effect for those households located at the bottom of the income-class structure as well as for the middle class.Campus de Excelencia Internacional Andalucía Tec