From transition crisis to the global crisis: labor in the Central and Eastern EU new member states.

This paper analyzes the developments in wages, employment, and income distribution in the Central and Eastern European New Member States twenty years after transition to market economies in three episodes: i. the transition crisis, ii. the post-transition growth, iii. the crisis episode of 2008-09. The balance sheet of the 20 years of transition in terms of employment and wages is marked by the negative effects of the transition crisis at the beginning and the global crisis in the last two years. Total employment has at best stagnated or slightly decreased along with significant job losses in industry. Modest wage increases have fallen way behind phenomenal productivity increases. Furthermore the global crisis has led to employment losses in all countries, and real wages have already started to decrease in several countries

Fiscal crisis in Europe or a crisis of distribution?

We are in a new episode of the global crisis: the struggle to distribute the costs of the crisis. The financial speculators and corporations are relabeling the crisis as a “sovereign debt crisis” and pressurizing the governments in diverse countries ranging from Greece to Britain to cut spending to avoid taxes on their profits and wealth. In Europe the crisis laid bare the historical divergences. At the root of the problem is the neoliberal model which turned the periphery of Europe into markets for the core. The EU’s current policies are still assuming that the problem is a lack of fiscal discipline and do not question the structural reasons behind the deficits. The crisis calls for a major change in policy framework within Europe. This is a crisis of distribution and a reversal of inequality at the expense of labour is the only real solution

The effect of foreign affiliate employment on wages, employment, and the wage share in Austria.

This paper estimates the effects of outward Foreign Direct Investment (employment in the affiliates abroad) on employment, wages, and the wage share in Austria using panel data for the period of 1996-2005. There is evidence of significant negative effects of FDI on both employment and wages, and consequently on the wage share. The results are not limited to workers in low skilled sectors. The negative employment effect is mainly due to the rise in the employment in the foreign affiliates in Eastern Europe. The negative wage effects are originating from affiliate employment in both the East and the developed countries in the industry, but FDI in the East has positive wage effects in the services sector due to possible scope effects

FDI and domestic investments in Germany: crowding in or out?

This paper estimates the effects of outward FDI on domestic business investment in Germany at the industry level for a panel of 19 industry and 10 services sectors in Germany. We pay particular attention to the different motivations behind FDI, and distinguishbetween FDI to high versus low wage countries, to Europe versus the rest of the world, and FDI in services and industry sectors.We find thatin industry FDI to low-wage countries crowds out domestic investment, whereas FDI to high wage countries outside Europe crowds in domestic investment. In services, FDI to Western Europe crowds in domestic investment

How does globalization affect the implicit tax rates on labor income, capital income, and consumption in the European Union?

This article analyzes the effects of globalization on implicit tax rates (ITRs) on labor income, capital income, and consumption in the EU15 and Central and Eastern European New Member States (CEE NMS). We find supportive evidence for an increase in the ITR on labor income in the EU15, but no effect on the ITR on capital income. There is evidence of convergence in terms of the ITR on consumption, as countries with higher than average ITR on consumption respond to globalization by decreasing their tax rates. There are important differences among the welfare regimes within the EU15. Social-democratic countries have decreased the tax burden on capital, but increased that on labor due to globalization. Globalization exerts a pressure to increase taxes on labor income in the conservative and liberal regimes as well. Taxes on consumption decrease in response to globalization in the conservative and social-democratic regimes. In the CEE NMS, there is no effect of globalization on the ITR on labor and capital income, but we find a negative impact on the ITR on consumption in the CEE NMS with higher than average ITR on consumption

Projections Onto Convex Sets (POCS) Based Optimization by Lifting

Two new optimization techniques based on projections onto convex space (POCS) framework for solving convex and some non-convex optimization problems are presented. The dimension of the minimization problem is lifted by one and sets corresponding to the cost function are defined. If the cost function is a convex function in R^N the corresponding set is a convex set in R^(N+1). The iterative optimization approach starts with an arbitrary initial estimate in R^(N+1) and an orthogonal projection is performed onto one of the sets in a sequential manner at each step of the optimization problem. The method provides globally optimal solutions in total-variation, filtered variation, l1, and entropic cost functions. It is also experimentally observed that cost functions based on lp, p<1 can be handled by using the supporting hyperplane concept