Investment behavior, user cost and monetary policy transmission - the case of Hungary

In this paper we investigate corporate investment behavior using a large panel of Hungarian firms between 1993 and 2002. The standard neoclassifical framework is used to derive empirically feasible specifications, however, several other issues beyond the scope of the framework are also addressed. We draw on the line of research carried out previously in the Eurosystem Monetary Transmission Network (EMTN). Our results are, by and large, similar to those obtained within the EMTN. Namely, the effect of user cost changes on investment is significant and robust across several specifications providing strong evidence against simple sales-accelerator models of investment. Firms' cash-flow proved to be a significant determinant of corporate investment, which suggests that financial variables do matter for firms

Currency Matching and Carry Trade by Non-Financial Corporations JRC Working Papers in Economics and Finance, 2017/2

The paper investigates firms’ willingness to match the currency composition of their assets and liabilities and their incentives to deviate from perfect matching. Using detailed information at the loan contract level for the Hungarian non-financial corporate sector, the paper provides strong evidence to support the theory that currency matching plays a role in exporters’ debt currency choices. However, natural hedging is not the primary motivation for firms to choose foreign currency: it explains less than 5 per cent of the overall new corporate foreign currency loans contracted by exporters and less than 2 per cent of the aggregate new foreign currency bank loans. Besides hedging, our results suggest that both carry trade and diversification strategies are relevant factors in firms’ currency-of-denomination decisions.JRC.B.1-Finance and Econom

Assessing the Economic and Social Impact of Tax and Transfer System Reforms: A General Equilibrium Microsimulation Approach JRC Working Papers in Economics and Finance, 2017/9

We present a general-equilibrium behavioural microsimulation model designed to assess long-run macroeconomic, fiscal and social consequences of reforms to the tax and transfer system. The behaviour of labour supply is assessed along both the extensive and intensive margins, by merging the discrete choice and the elasticity of taxable income approaches. General-equilibrium feedback effects are simulated by embedding microsimulation in a parsimonious macro model of a small open economy. We estimate and calibrate the model to Hungary, and then perform three sets of simulations. The first one explores the impact of personal income tax reductions that are identical in cost but different in structure. The second one compares three different tax shift scenarios, while the third one evaluates actual policy measures between 2008 and 2013. The results suggest that while a cut in the marginal tax rate of high-income individuals may boost output, it does not have a significant employment effect. On the other hand, programs like the Employee Tax Credit do have a significant employment effect. We find that the policy measures introduced since 2008 substantially increase income inequality in the long run; the contribution of the changes after 2010 are about four times that of the changes before 2010. Our results highlight that taking account of household heterogeneity is crucial in the analysis of the macroeconomic effects of tax and transfer reforms.JRC.B.1-Finance and Econom

Driving factors of growth in Hungary - a decomposition exercise

Applications tend to ignore that measured TFP reflects the variation of output that cannot be explained by changes in inputs. Such a change is not necessarily technological, so measured TFP differences across firms are an amalgam of technological, efficiency and other differences in attributes, which calls for further refinement in the treatment of TFP. To control for cyclical effects, we modify a standard technique in firmlevel production function estimation using a capacity utilization proxy. Based on a large panel of Hungarian manufacturing firms, we decompose value added growth to input factor, capacity utilization and estimated TFP growth contributions. We find that using an hours worked proxy, the variance of the residual drops considerably. We also find that TFP's role has not been stable over the period: it contributed to value added growth mostly in periods when/after institutional reforms, privatization or FDI inflow took place and lost its importance several years after the shocks

Pancreatic cancer in obstructive jaundice in unexpected age

Cancer of the pancreas is a highly lethal malignancy. It is considered as the fourth leading cause of cancer-related death in the United States and second only to colorectal cancer as a cause of digestive cancer-related death.It is hoped that detection of asymptomatic and early stage of disease is potentially curable pancreatic cancer and it will improve outcomes. Our case report is 45 years old female who presented at our primary health care centre with obstructive jaundice for only 2 weeks and no weight loss, vague abdominal pain. She had intermittent epigastric pain for past few months and diagnosed as gastroesophageal reflex. Also, she had chronic anemia and need blood transfusion in the past 3 years. No family history of pancreatic cancer and no other risk factor. Most articles reveal difficulty in diagnosing pancreatic cancer in early stage and young age group due to its resemblance to benign lesion. That’s why we prefer to do case report for documentation. Diagnosis of the tumor is important especially in early stages for improving prognosis

Rheumatoid arthritis onset after COVID-19 infection: a case report

At the end of 2019, coronavirus disease (COVID-19) outbreak is caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV2). Worldwide researchers and physician try to explore the mechanisms of damage induced by virus, they focus on the short-term and long-term immune-mediated consequences induced by the virus infection. Every day discover a new pathological condition induced by virus and new symptoms and disease may occur after recovery from disease. Our case report is 41 years old, Indian lady who presented to our primary health care centre complaining of multiple small hand joints pain, both elbows and knees pain with swelling of them and prolonged morning stiffness, diagnosed seropositive rheumatoid arthritis (RA) (arthritis, positive rheumatoid factor (RF), and X-ray changes) after 1 month recovery from COVID-19 infection. She did not have any joint pain and she had negative RF before COVID-19 infection with no family history of RA

Semi-Structural VAR and Unobserved Components Models to Estimate Finance-Neutral Output Gap: JRC Working Papers in Economics and Finance, 2020/11

The paper assesses the impact of adding information on financial cycles on the output gap estimates for eight advanced economies using two unobserved components models: a reduced form extended Hodrick-Prescott filter, and a standard semi-structural unobserved components model. To complement these models, a semi-structural vector autoregression model is proposed in which only supply shocks are identified. The accuracy of the output gap estimates is assessed based on their performance in predicting recessions. The models with financial variables generally produce more accurate output gap estimates at the expense of increased real-time volatility. While the extended Hodrick-Prescott filter is particularly appealing for its real-time stability, it lags behind the two semi-structural models in terms of forecasting performance. The vector autoregression model augmented with financial variables features the best in-sample forecasting performance, and it has similar real-time prediction capabilities to the semi-structural unobserved components model. Overall, financial cycles appear to be relevant in Japan, Spain, the UK, and – to a lesser extent – in the US and in France, while they are relatively muted in Canada, Germany, and Italy.JRC.I.1-Monitoring, Indicators & Impact Evaluatio

Rigid Labour Compensation and Flexible Employment ? Firm-Level Evidence with Regard to Productivity for Belgium

Using firm-level data for Belgium over the period 1997-2005, we evaluate the elasticity of firms' labour and real average labour compensation to microeconomic total factor productivity (TFP). Our results may be summarised as follows. First, we find that the elasticity of average labour compensation to firm-level TFP is very low contrary to that of labour, consistent with real wage rigidity. Second, while the elasticity of average labour compensation to idiosyncratic firm-level TFP is close to zero, the elasticity with respect to aggregate sector-level TFP is high. We argue that average labour compensation adjustment mainly occur at the sector level through sectoral collective bargaining, which leaves little room for firm-level adjustment to firm-specific shocks. Third, we report evidence of a positive relationship between hours and idiosyncratic TFP, as well as aggregate TFP within the yea

Inter-industry wage differentials in EU countries: What do cross-country time-varying data add to the picture? National Bank of Belgium Working Paper, No. 189, April 2010

This paper documents the existence of inter-industry wage differentials across a large number of industries for eight EU countries (Belgium, Germany, Greece, Hungary, Ireland, Italy, the Netherlands and Spain) at two different points in time (in general, 1995 and 2002). It then looks into possible explanations for the main patterns observed. The analysis uses the European Structure of Earnings Survey (SES), an internationally-harmonised matched employer-employee dataset, to estimate inter-industry wage differentials conditional on a rich set of employee, employer and job characteristics. After investigating the possibility that unobservable employee characteristics lie behind the conditional wage differentials, a hypothesis which cannot be accepted, the paper considers the role of institutional features, as well as industry structure and performance in explaining inter-industry wage differentials. The results suggest that inter-industry wage differentials are consistent with rent-sharing mechanisms and that rent-sharing is more likely in industries with firm-level collective agreements and with higher collective agreement coverage