Exploring the Economic Convergence in the EU New Member States by Using Nonparametric Models

This paper analyzes the process of real economic convergence in the New Member States (NMS) bein g formerly centrally planned economies, using nonparametric methods instead of conventional parametric measurement tools like beta and sigma models. This methodological framework allows the examining of the relative income distribution in different periods of time, the number of modes of the density distribution, the existence of “convergence clubs” in the distribution and the hypothesis of convergence at a single point in time. The modality tests (e.g. the ASH-WARPing procedure) and stochastic kernel are nonparametric techniques used in the empirical part of the study to examine the income distribution in the NMS area. Additionally, random effects panel regressions are used, but only for comparison reasons. The main findings of the paper are the bimodality of the income density distribution over time and across countries, and the presence of convergence clubs in the income distribution from 1995 to 2008. The findings suggest a lack of absolute convergence in the long term (1995-2008) and also when looking only from 2003 onwards. The paper concludes that, in comparison with the parametrical approach, the nonparametric one gives a deeper, real and richer perspective on the process of real convergence in the NMS area.real convergence, nonparametric models, stochastic kernel, modality

The patterns and causes of social exclusion in Luxembourg

The paper investigates the forms and determinants of social exclusion in Luxembourg and addresses both conceptual and empirical issues. We therefore examine the following issues: what definition of social exclusion is more appropriate for Luxembourg, if the economic and social disadvantages cumulate within the social exclusion process in Luxembourg, if the “spiral of precariousness” applies for Luxembourg, how poverty and deprivation lead to social exclusion, which are the main determinants of social exclusion and deprivation and if there are significant differences between them. The analysis is based on the data coming from the Luxembourg socioeconomic panel (PSELL-2).social exclusion ; deprivation ; cumulative disadvantage

Exploring the Economic Convergence in the EU New Member States by Using Nonparametric Models

This paper analyzes the process of real economic convergence in the New Member States (NMS) being formerly centrally planned economies, using nonparametric methods instead of conventional parametric measurement tools like beta and sigma models. This methodological framework allows the examining of the relative income distribution in different periods of time, the number of modes of the density distribution, the existence of 'convergence clubs' in the distribution and the hypothesis of convergence at a single point in time. The modality tests (e.g. the ASH-WARPing procedure) and stochastic kernel are nonparametric techniques used in the empirical part of the study to examine the income distribution in the NMS area. Additionally, random effects panel regressions are used, but only for comparison reasons. The main findings of the paper are the bimodality of the income density distribution over time and across countries, and the presence of convergence clubs in the income distribution from 1995 to 2008. The findings suggest a lack of absolute convergence in the long term (1995-2008) and also when looking only from 2003 onwards. The paper concludes that, in comparison with the parametrical approach, the nonparametric one gives a deeper, real and richer perspective on the process of real convergence in the NMS area.Der Beitrag untersucht den realen Konvergenzprozess in den neuen Mitgliedstaaten der EU (NMS), die nach ihrer Transformation von der Plan- zur Marktwirtschaft 2004 bzw. 2007 in die EU aufgenommen wurden. Im Gegensatz zu den üblichen parametrischen Vorgehensweisen wie der Berechnung von beta- bzw. sigma-Konvergenz werden hier nicht-parametrische Ansätze verfolgt. Sie erlauben es, die relative Einkommensverteilung zu unterschiedlichen Zeitpunkten zu untersuchen, die Anzahl der Modalwerte in der Wahrscheinlichkeitsdichte zu bestimmen, das Bestehen von 'Konvergenzclubs' innerhalb der Verteilung zu ermitteln und die Aussage zu überprüfen, ob sich der Konvergenzprozess auf einen einzigen Punkt hin bewegt. Die Tests auf Anzahl der Modalwerte (d. h. das ASH-WARPing Verfahren) und die Ermittlung stochastischer Kerndichte-Funktionen sind nicht-parametrische Verfahren, um die Einkommensverteilung in den NMS-Staaten zu untersuchen. Zusätzlich werden Panelregressionen mit Random-Effekten durchgeführt, die jedoch nur zu Vergleichszwecken mit den nicht-parametrischen Ergebnissen dienen. Die wesentlichen Ergebnisse des Beitrags lauten, dass einerseits eine bimodale Verteilung der Einkommen über die Zeit und unter den Ländern vorliegt, andererseits die Existenz von Konvergenzclubs aus den Einkommensverteilungen von 1995 bis 2008 hergeleitet werden kann. Die Ergebnisse legen den Schluss nahe, dass absolute Konvergenz weder für den längeren Zeitraum 1995 bis 2008 noch für den kürzeren Zeitraum ab 2003 beobachtet werden kann. Der Beitrag schließt mit dem Ergebnis, dass im Vergleich zu parametrischen Methoden nicht-parametrische Ansätze einen tieferen und reichhaltigeren Einblick in den Prozess der realen Konvergenz in den NMS-Ländern vermitteln

Item response theory and the measurement of deprivation: Evidence from PSELL-3

Item Response Theory (IRT) has recently been proposed as a framework to measure deprivation. It allows deriving a latent measure of deprivation from a set of dichotomous observed items of deprivation and analyzing determinants of deprivation. We investigate further the use of IRT models in the field of deprivation measurement. Firstly, the paper emphasizes the importance of item selection and the Mokken Scale Procedure is applied in order to select the items to be included in the scale of deprivation. Secondly, we apply the one and the two-parameter probit IRT models for dichotomous items on two different sets of items, in order to highlight different empirical results. Finally, we introduce a graphical tool, the Item Characteristic Curve (ICC) and analyse the determinants of deprivation in Luxembourg. The empirical illustration is based on the fourth wave of the Luxembourg socioeconomic panel “Liewen zu Lëtzebuerg” (PSELL-3).item response theory ; deprivation ; latent trait ; Mokken Scale ; PSELL3

Real convergence in the CEECs, euro area accession and the role of Romania

The paper is aimed at studying the absolute and conditional convergence in the Central and Eastern European countries. Given that these countries have common roots and their economies have experienced similar challenges over time, the regional convergence in the CEE region might be seen as an intermediary stage of the CEE participation to the EMU. The case of Romania is particularly examined, with a focus on its macroeconomic performances and the role it plays in the process of regional convergence. In the empirical section the GDP growth is regressed upon a number of macroeconomic indicators in order to assess the absolute/ conditional convergence and to highlight the determinants of growth. The study has a longitudinal dimension and uses panel data techniques. Several estimators are used in order to get robust results and to allow us comparing the empirical findings. The paper finds empirical evidence on both absolute and conditional convergence in the CEE countries, and identifies the main drivers of regional growth. The presence of Romania among the CEE countries is a key element of the absolute convergence, while the conditional convergence occurs anyway. In the light of these results, the paper contributes to the growing literature in the field and brings additional evidence for convergence in the CEE region.Convergence, Romania, CEE countries, euro area

The role of education in stimulating economic development in the framework of Europe 2020 Strategy : evidence from south-eastern Europe

A new model of economic development focused on the encouragement of smart, inclusive and sustainable economic growth is the core of the Europe 2020 strategy. Education is widely acknowledged as being a key factor leading to economic growth and economic development, in the long term. But the impact of different kind of achievements in education on growth has little empirical evidence, especially when examining the South-Eastern European countries. This paper analyses the role played by different types of educational achievements, aggregated at the macroeconomic level, beside a set of other potential socio-economic drivers, on the economic growth and quality of life, in the South Eastern Europe, based on the Eurostat panel dataset. A number of panel data regression models using the GMM and FGLS estimators allow answering our research questions. Our empirical results indicate what policy measures are the most effective to target both the economic growth and quality of life.peer-reviewe

A comparative analysis of Romanian and Greek exports in the process of EU-integration

This paper provides a comparative analysis of Romanian and Greek exports in the context of EU-integration. The Romanian revealed comparative advantage in exports is investigated by calculating the specialization index. The same indicator is examined in the case of Greece. The evolution of bilateral trade flows between Romania and Greece is addressed further. The current economic crisis poses serious challenges for both countries’ exporters. The impact of the crisis on the structure of Greek exports is compared to Romania’s situation. Subsequently, some conclusions and policy recommendations are issued to improve Romania’s and Greece’s export competitiveness in the following period.peer-reviewe

The impact of biofuels utilisation in transport on the sustainable development in the European Union

The biofuels sustainability in transport depends on the energetic products demand and the limited resources. According to European legislation, the energy consumption in transport from renewable energy in the European Union should increase by 10% till 2020. Considering the environmental requests related to greenhouse gases reduction and a lower dependency on oil fuels stimulated more the biofuels production, this research empirically assessed the impact of energy consumption in transport based on biodiesel and bioethanol on sustainable development in terms of economic growth and greenhouse emissions. Using dynamic panel and panel vector-auto-regression models for European Union countries during 2010–2015, we proved that only the energy consumption in transport based on biodiesel had a positive impact on economic growth. The greenhouse emissions did not have any impact on economic growth while the energy consumption in transport based on bioethanol negatively affected the economic growth. The Granger causality tests on panel data indicated a bilateral relationship between economic growth and energy consumption in transport based on biodiesel and between economic growth and energy consumption in transport based on bioethanol. Given these empirical results, the energy policies should focus on the higher utilisation of biodiesel in transport in the EU