The History and Sustainability of the CBA in Estonia

Estonia has had a currency board arrangement (CBA) for more than 10 years. Due to the successful performance of the Estonian economy under a CBA the current position of the Bank of Estonia is to maintain its exchange rate regime until full participation in the EMU, inter alia, during Estonia’s participation in ERM 2. Therefore, it is necessary to analyse the reasons for maintaining the CBA in the past and whether it is a viable option in the future. The main aim of this paper is therefore to give an overview of the history of the Estonian CBA and examine the different aspects of its sustainability. In section 2 the article describes the basic features of the CBA in general and the Estonian CBA in particular and discusses the rationale for the choice of a CBA in Estonia. The third section of the article describes the main developments of the Estonian economy during the last 10 years. Both financial sector and real sector developments are briefly discussed. In the fourth section, we assess the sustainability of the Estonian CBA. We specifically analyze whether the preconditions for the successful performance of the CBA are in place. First, we examine the fiscal policy stance after the introduction of the currency board with special emphasis upon the period strongly influenced by external shocks (1997–1999). Secondly, we discuss the flexibility of the real sector of the economy. For this purpose the flexibility of wage setting, movements in the real exchange rate and changes in foreign trade are discussed. Thirdly, we analyse the resilience of the banking sector by looking at its performance during the external shocks experienced during the Asian and Russian crises. The article concludes that the Estonian economy fulfils the main economic preconditions for the sustainability of the CBA – sufficient fiscal discipline, flexibility of the real sector and resilience of the financial sector. Therefore, the CBA could be considered a suitable exchange rate arrangement before Estonia’s entry to the third stage of the EMU.Estonia; Currency Board

The Estonian Foundation – What is Missing for It to Be A Well-Designed Wealth-Management Vehicle for Local and Foreign High-Net-Worth Individuals?

Although Estonia has a foundations regulation that enables establishing private foundations, the local high-net-worth individuals prefer to use schemes and foundations offered by other countries and Estonia’s export of the relevant service is a non-issue today. The article explores why this is so. One of the biggest problems certainly is the current double taxation of private foundations. Another major problem is excessive accountability and publicity: an Estonian foundation is registered in a public register from which the information on that foundation is accessible to everyone. This includes the data on the founder and beneficiaries; the content of the bylaws; and, through annual reports, information on the foundation’s income, wealth, and assets. The authors propose amendments to the current regulation and, to justify the changes, suggest some incentives for encouraging the establishment of private foundations in Estonia

How to Improve the Supportive Role of Estonian Innovation System toward Launching New Products by High Technology Companies?

The purpose of the study is to evaluate how supportive is Estonian national innovation system toward the launching of new innovative products by high technology firms. The article intends to combine two broad areas of research – national innovation system approach and the different models of the new product launching. Based on the literature review and in-depth analysis of three case studies of Estonian high-tech company’s major barriers as well success factors of highly innovative product launches were identified. The barriers of the new product launching were linked with the systemic failures of the national innovation system. The most relevant failures of Estonian national innovation system inhibiting the new product development are capability and networking failures. The sources of innovation of high-technology firms are too narrow, linkages with domestic firms and higher education institutions as well with foreign firms are poorly developed. High-tech firms have also serious capacity problems due to the extremely weak support mechanism by national innovation system on the seed funding stage of product development and prototype building stage as well. Paper argues that resources needed for the innovation should not be looked too narrowly following linear innovation model approach. Instead interactive approach is needed, which combines capability building, network development, interactive learning with direct investments into fundamental research

An Econometric Macro-model of Transition: Policy Choices in the Pre-Accession Period

This paper analyses current policy choices facing the candidate countries for EU accession using newly developed econometric macromodels of Poland, Hungary, the Czech Republic, Slovenia and Estonia. The models allow for endogenous growth, and they have been incorporated into an existing global econometric model (NiGEM). This allows long-term projections to be made consistently with expected developments in other economies and allows full feedbacks with the rest of the world so that we can understand impacts on existing EU members as well as the candidate countries. This paper has several novel features, in that we use modern panel data techniques on short time series data in order to construct models of a number of economies. In constructing the models, we have taken special care to consider the roles of openness and foreign investment on productivity and growth. Different policies toward growth and the enhancement of technology transfer are analysed using the models, and policy advice on the accession and integration are made.accession. macro-model. panel data. transition.

Global diversity and distribution of nitrogen-fixing bacteria in the soil

Our knowledge of microbial biogeography has advanced in recent years, yet we lack knowledge of the global diversity of some important functional groups. Here, we used environmental DNA from 327 globally collected soil samples to investigate the biodiversity patterns of nitrogen-fixing bacteria by focusing on the nifH gene but also amplifying the general prokaryotic 16S SSU region. Globally, N-fixing prokaryotic communities are driven mainly by climatic conditions, with most groups being positively correlated with stable hot or seasonally humid climates. Among soil parameters, pH, but also soil N content were most often shown to correlate with the diversity of N-fixer groups. However, specific groups of N-fixing prokaryotes show contrasting responses to the same variables, notably in Cyanobacteria that were negatively correlated with stable hot climates, and showed a U-shaped correlation with soil pH, contrary to other N-fixers. Also, the non-N-fixing prokaryotic community composition was differentially correlated with the diversity and abundance of N-fixer groups, showing the often-neglected impact of biotic interactions among bacteria

FungalTraits:A user-friendly traits database of fungi and fungus-like stramenopiles

The cryptic lifestyle of most fungi necessitates molecular identification of the guild in environmental studies. Over the past decades, rapid development and affordability of molecular tools have tremendously improved insights of the fungal diversity in all ecosystems and habitats. Yet, in spite of the progress of molecular methods, knowledge about functional properties of the fungal taxa is vague and interpretation of environmental studies in an ecologically meaningful manner remains challenging. In order to facilitate functional assignments and ecological interpretation of environmental studies we introduce a user friendly traits and character database FungalTraits operating at genus and species hypothesis levels. Combining the information from previous efforts such as FUNGuild and Fun(Fun) together with involvement of expert knowledge, we reannotated 10,210 and 151 fungal and Stramenopila genera, respectively. This resulted in a stand-alone spreadsheet dataset covering 17 lifestyle related traits of fungal and Stramenopila genera, designed for rapid functional assignments of environmental studies. In order to assign the trait states to fungal species hypotheses, the scientific community of experts manually categorised and assigned available trait information to 697,413 fungal ITS sequences. On the basis of those sequences we were able to summarise trait and host information into 92,623 fungal species hypotheses at 1% dissimilarity threshold