Beschäftigungspolitik in Österreich

Standard international trade lectures normally comprises three central theories: the Ricardian Model, the Heckscher-Ohlin-Samuelson Modell and New Trade Theory a la Krugman 1979 and 1980. Nowadays this trilogy needs to be enhanced with the basic concepts of a new class of trade models: the New New Trade Theory which accounts for firm heterogeneity and market entry costs. The basic objective of this paper is to present the contribution of Marc J. Melitz in Econometrica 2003 which is central to this new class of trade theory. I show how it is embedded in antecedent theory and highlight the new insights for trade patterns stemming from it. --

Cyclical Recovery Losing Momentum

In the last couple of months, business surveys in the euro area point to a slowdown of the recovery in the manufacturing sector. The boom in exports has not, or only hesitantly been transmitted to domestic demand. In Austria, exports and manufacturing output were still relatively lively early this year, while retail sales in the first two months of 2005 disappointed, given the positive income effects from the tax reform. The marked upward drift of inflation is squeezing private purchasing power.Business Cycle Report

Erdölverteuerung und Budgetkonsolidierung dämpfen Wirtschaftswachstum. Prognose für 2000 und 2001

Der deutliche Anstieg der Erdölpreise und die rasche Budgetkonsolidierung werden das Wirtschaftswachstum im kommenden Jahr dämpfen. Nach einem kräftigen Konjunkturaufschwung 2000 (+3,5%) wird das BIP 2001 um nur noch 2,8% zunehmen. Der Preisauftrieb schwächt sich 2001 mit dem Abklingen der Erdölpreishausse ab, und die Arbeitslosenquote geht weiter deutlich zurück. Das angestrebte Budgetziel eines Nettodefizits der öffentlichen Haushalte von ¾% des BIP kann dank der forcierten Konsolidierungsmaßnahmen erreicht werden, allerdings wird die Abgabenquote spürbar steigen.Erdölverteuerung und Budgetkonsolidierung dämpfen Wirtschaftswachstum. Prognose für 2000 und 2001

Die Wirtschaftslage in Österreich

Die Wirtschaftslage in Österreich

The Bursting of the Real Estate Bubble: More than a Trigger for the Financial Crisis

The bursting of the housing bubble in the USA was a key factor to propel the ensuing financial crisis. When real estate suffers a massive loss of value, banks are in greater trouble than when faced with a stock market crash because land is the main collateral for bank loans and home ownership is much more widespread than shareholdings. Historical studies have found a close link between real estate crises and financial crises. A collapse of real estate prices typically precedes a financial crisis by about a year.Finanzmarktkrise Immobilienpreise Preisblase

The Effect of House Prices on Growth

The differences in growth rates between EU countries during the period 1995-2005 can be attributed in part to the responsiveness of consumption and residential building to house price and interest rate changes. Rising real house prices in the UK, Ireland, the Scandinavian countries and Spain accelerated residential building and stimulated private consumption through wealth effects. Using cross-country analysis, an increase of real house prices by 1 percent raised GDP growth by 0.15 percentage point.

Activity Remaining Subdued

The downward trend in industrial output has bottomed out in early 1992. While export growth picked up in January and February this may not yet signal a sustained recovery as sluggishness persists in major foreign markets. Domestic demand growth has abated somewhat except for construction investment which exceeded the level a year ago by one-fifth. Despite the easing of overall demand pressure inflation accelerated to an annual rate of 4¼ percent in March (excluding the seasonal component) while the rise in unemployment came to a halt.Konjunktur bleibt gedämpft; Activity Remaining Subdued

Turnaround on the Labour Market Despite Sluggish Export Activity

Austrian industry has not yet overcome the period of stagnation it experienced since last autumn as a result of falling export orders. However, the outcome of WIFO's cyclical test points to a stabilisation of production expectations. Due to growing domestic demand and a slower increase in the supply of labour, the expected turnaround on the labour market was achieved. Austrian industrial production and exports continued to stagnate at the beginning of 1999. According to preliminary data, exports as well as goods production declined in nominal terms from the previous year's level in January and February 1999. Assuming a price drop by approximately 2 percent, real exports exceeded the previous year's level, whereas real production remained below. Although the business surveys carried out in spring 1998 point to some stabilisation, an improvement of the industrial business climate is not yet noticeable. Enterprises in manufacturing report a less favourable order situation; their expectations regarding future production and economic conditions in general, however, are similar to those reflected in the last two surveys. The turnaround on the labour market was achieved despite sluggish export activities. The employment situation continued to improve throughout spring: in May the number of jobs had increased by 27,400 (+0.9 percent) and the number of vacancies by 8,000 over the year before. The number of persons registered as unemployed dropped sharply (–18,400) also as a result of intensified labour market policy measures. The improvement of the labour market situation was due, above all, to rising domestic demand, a more moderate increase of labour supply, and the widened scope of labour market programmes. The effect of rising domestic demand on employment is about twice as strong as that of high export growth. Thus, vigorous domestic demand (a 2.5 percent increase has been forecast for 1999) creates additional employment, above all in the service sector. Consumer confidence in the economic situation remains unshaken. It is based on growing real incomes, stable prices and rising employment. However, the high level of domestic demand also results in strong import growth, which in turn leads to a deterioration of the balance of trade and current account. According to preliminary information, imports in January and February 1999 exceeded the previous year's level by 8 percent. The rate of inflation declined further to 0.3 percent in April, with price drops being due, above all, to developments at the international level. The wholesale price index, which reflects such influences more strongly, was approximately 2 percent below the previous year's level during the first four months of 1999. Price cuts were observed in sectors directly or indirectly affected by the Asian crisis (steel, metal, oil and electronics industries). However, the downward trend of prices world-wide has been stopped at least temporarily: the April price indices for energy and agricultural products were already clearly above those reported at the beginning of the year.Turnaround on the Labour Market Despite Sluggish Export Activity