Integration of the Central and East European Countries Into the European Union: Implications for the CEECs

International Relations/Trade,

Market structure and market access

We examine an issue at the nexus of domestic competition policy and international trade, the interaction between goods trade and market power in domestic trade and distribution sectors. Theory suggests a set of linkages between service-sector competition and goods trade supported by econometrics involving imports of 22 OECD countries vis-´a-vis 69 exporters. Competition in services affects the volume of goods trade. Additionally, because of interaction between tariffs and competition, the market structure of the domestic service sector becomes increasingly important as tariffs are reduced. Empirically service competition apparently matters most for exporters in smaller, poorer countries. Our results also suggest that while negotiated agreements leading to crossborder services liberalization may boost goods trade as well, they may also lead to a fall in goods trade when such liberalization involves FDI leading to increased service sector concentration.distribution sector competition; market access; services; trade liberalization; GATS

Institutions, infrastructure, and trade

We work with a panel of bilateral trade flows from 1988 to 2002, exploring the influence of infrastructure, institutional quality, colonial and geographic context, and trade preferences on the pattern of bilateral trade. We are interested in threshold effects, and so emphasize those cases where bilateral country pairs do not actually trade. We depart from the institutions and infrastructure literature in this respect, using selection-based gravity modeling of trade flows. We also depart from this literature by mixing principal components (to condense our institutional and infrastructure measures) with a focus on deviations from expected values for given income cohorts to control for multicollinearity. Infrastructure, and institutional quality, are significant determinants not only of export levels, but also of the likelihood exports will take place at all. Our results support the notion that export performance, and the propensity to take part in the trading system at all, depends on institutional quality and access to well developed transport and communications infrastructure. Indeed, this dependence is far more important, empirically, than variations in tariffs in explaining sample variations in North-South trade. This implies that policy emphasis on developing country market access, instead of support for trade facilitation, may be misplaced.exports; trade; institutions; infrastructure; zero-trade; gravity model

Distributional effects of educational improvements :are we using the wrong model ?

Measuring the incidence of public spending in education requires an intergenerational framework distinguishing between what current and future generations - that is, parents and children - give and receive. In standard distributional incidence analysis, households are assumed to receive a benefit equal to what is spent on their children enrolled in the public schooling system and, implicitly, to pay a fee proportional to their income. This paper shows that, in an intergenerational framework, this is equivalent to assuming perfectly altruistic individuals, in the sense of the dynastic model, and perfect capital markets. But in practice, credit markets are imperfect and poor households cannot borrow against the future income of their children. The authors show that under such circumstances, standard distributional incidence analysis may greatly over-estimate the progressivity of public spending in education: educational improvements that are progressive in the long-run steady state may actually be regressive for the current generation of poor adults. This is especially true where service delivery in education is highly inefficient - as it is in poor districts of many developing countries - so that the educational benefits received are relatively low in comparison with the cost of public spending. The results have implications for both policy measures and analytical approaches.,Debt Markets,Access to Finance,Economic Theory&Research,Public Sector Expenditure Analysis&Management

EU-South Korea FTA – Economic Impact for the EU and Austria

Das Freihandelsabkommen zwischen der EU und Südkorea (EU-Südkorea FHA) ist das erste einer neuen Generation von FHA, die 2007 gestartet wurden und Teil der Initiative „Globales Europa“ sind. Solche Abkommen, die auf fundierten wirtschaftlichen Kriterien basieren, bilden einen wichtigen Schritt für weitere Handelsliberalisierungen, da sie auch Themen behandeln, die noch nicht reif für multilaterale Diskussionen sind und weit über eine bloße Marktöffnung hinausgehen, wie sie im Rahmen der WTO erreicht werden können. In diesem Sinne ist das EU-Südkorea FHA das umfassendste Freihandelsabkommen, das die EU jemals verhandelt hat. Wir evaluieren die wirtschaftlichen Auswirkungen dieses Freihandelsabkommen für die EU und für Österreich mit dem rechenbaren allgemeinen Weltgleichgewichtsmodell GTAP. Die Ergebnisse sind wie erwartet. Beide Parteien gewinnen von der Beseitigung der Zölle und anderer Handelsbarrieren. Da die Anteile der Exporte und Importe mit Südkorea sowohl von seitens der EU als auch Österreichs nur 2% bis 2 ½% des gesamten Extra-EU-Handels ausmachen, fallen die Handels- und Wohlfahrtsgewinne für die EU und Österreich bescheiden aus. Der gesamte Handel der EU steigt um 0,2%, jener Österreichs nur um 0,1%. Der Extra-EU-Handel steigt sowohl in der EU als auch in Österreich um jeweils 1,2%. Die Wohlfahrt steigt in der EU und in Österreich nur um 0,04% des BIP. In Südkorea sind die Effekte höher, da die EU der zweitgrößte Handelspartner mit einem Anteil von 12% ist. Der Handel nimmt in Südkorea um 5,3% zu und die Wohlfahrt kann um 1,3% des BIP gesteigert werden.

The construction and interpretation of combined cross-section and time-series inequality datasets

The inequality dataset compiled in the 1990s by the World Bank and extended by the United Nations has been both widely used and strongly criticized. The criticisms raise questions about conclusions drawn from secondary inequality datasets in general. The authors develop techniques to deal with national and international comparability problems intrinsic to such datasets. The result is a new dataset of consistent inequality series, allowing them to explore problems of measurement error. In addition, the new data allow the authors to perform parametric non-linear estimation of Lorenz curves from grouped data. This in turn allows them to estimate the entire income distribution, computing alternative inequality indexes and poverty estimates. Finally, the authors use their broadly comparable dataset to examine international patterns of inequality and poverty.Inequality,Poverty Impact Evaluation,Services&Transfers to Poor,Economic Theory&Research,Poverty Monitoring&Analysis

Trade Effects of Services Trade Liberalization in the EU

This paper gives a quantitative assessment of possible trade effects resulting from different trade liberalization scenarios within the EU. The simulations are based on the GTAP model, a computable general equilibrium model. We use the GTAP database and own estimates of protection in the service sector. We compare different scenarios, which differ in the extent of their liberalization (linear versus sector country and specific cuts in existing trade barriers, including all sectors versus only selected sectors). Our findings point towards larger gains from more comprehensive cuts (i.e. including all service sectors) and larger gains for the - up to date more restricted - new EU members.export of services, trade liberalization, computable general equilibrium modelling, services trade

Cosmic Neutron Star Merger Rate and Gravitational Waves constrained by the R Process Nucleosynthesis

The cosmic evolution of the neutron star merger (NSM) rate can be deduced from the observed cosmic star formation rate. This allows to estimate the rate expected in the horizon of the gravitational wave detectors advanced Virgo and ad LIGO and to compare those rates with independent predictions. In this context, the rapid neutron capture process, or r process, can be used as a constraint assuming NSM is the main astrophysical site for this nucleosynthetic process. We compute the early cosmic evolution of a typical r process element, Europium. Eu yields from NSM are taken from recent nucleosynthesis calculations. The same approach allows to compute the cosmic rate of Core Collapse SuperNovae (CCSN) and the associated evolution of Eu. We find that the bulk of Eu observations at high iron abundance can be rather well fitted by either CCSN or NSM scenarios. However, at lower metallicity, the early Eu cosmic evolution favors NSM as the main astrophysical site for the r process. A comparison between our calculations and spectroscopic observations at very low metallicities allows to constrain the coalescence timescale in the NSM scenario to about 0.1 to 0.2 Gyr. These values are in agreement with the coalescence timescales of some observed binary pulsars. Finally, the cosmic evolution of Eu is used to put constraints on the NSM rate, the merger rate in the horizon of the gravitational wave detectors advanced Virgo/ad LIGO, as well as the expected rate of electromagnetic counterparts to mergers (kilonovae) in large near-infrared surveys.Comment: accepted in MNRAS, 19 page