External Effects of Currency Unions

Argument: The paper argues that the introduction of the Euro has considerably reduced de facto monetary policy autonomy in non-ECU members. We start from a simple Mundellian model, in which currency unions raise economic efficiency but reduce monetary policy autonomy. Our main argument holds that governments in countries that did not join the currency union lose monetary policy autonomy if the establishment of a currency union increases the size of the key currency area. The increase in the size of the key currency area has two external effects on countries remaining outside the currency union: Firstly, it renders stable exchange-rates to the currency union slightly more important, because the value of goods imported from countries within the currency union increases and because the countries inside the union have more synchronized business cycles. Secondly and more importantly, we claim that any given change in the real interest-rate differential leads to an exchange-rate effect, which is larger the smaller the domestic currency area is relative to the key currency area. Consequently, governments in non-member countries have to pay a higher price if they seek to stimulate the domestic economy. Hypotheses: a) Exchange-rate effects on changes in the real interest rate differential are larger, if currency areas are less equal in size. b) Outsider countries more closely follow the interest-rate policy of the currency union than they had previously followed the monetary policy of the anchor currency. Empirics: We employ a panel-GARCH model to estimate the impact of changes in the key currency real interest rate on the real interest rate of other countries. Specifically, we analyze the influence of Germany’s and the Eurozone’s monetary policy on the monetary policy of Great Britain, Denmark, Norway, Sweden, and Switzerland. Results: Our results support the assumptions underlying our model as well as our main argument. De facto monetary autonomy of countries remaining outside a currency union declines with the establishment of the union. ZUSAMMENFASSUNG - (Externe Auswirkungen von Währungsunionen) Der Artikel argumentiert, dass die Einführung des Euro die faktische geldpolitische Autonomie auch in Staaten reduziert hat, die der Europäischen Währungsunion nicht beigetreten sind. Das Argument basiert auf einem einfachen Mudellianischen Modell, in dem Währungsunionen die wirtschaftliche Effizienz steigern aber zugleich die geldpolitische Autonomie reduzieren. Wir zeigen über das Standardmodell hinaus, dass Länder, die der Währungsunion nicht beitreten, geldpolitische Autonomie einbüßen, wenn sich durch die Währungsunion die Größe des Leitwährungsraumes erhöht. Diese Vergrößerung des Leitwährungsraumes hat zwei Auswirkungen auf Länder außerhalb der Union: Erstens steigt die Bedeutung stabiler Wechselkurse leicht an, weil der Wert importierter Güter aus dem Währungsgebiet zunimmt und weil die Länder der Union stärker synchronisierte Konjunkturzyklen aufweisen als vor der Gründung der Währungsunion. Zweitens steigt durch die Vergrößerung der Leitwährung aber der Einfluss von Veränderungen der Zinsdifferenz auf die Wechselkurse zwischen Währungen außerhalb der Währungsunion und der Unionswährung an. Folglich müssen Länder eine stärkere Abwertung ihrer Währung hinnehmen, wenn sie die Zinsen senken, um die Konjunktur anzukurbeln. Wir testen dieses Argument anhand der zwei Kernhypothesen: a) Wechselkurse reagieren umso stärker auf Veränderungen der Zinsdifferenz, je größer der Leitwährungsraum ist. b) Länder außerhalb der Währungsunion folgen der Geldpolitik der Union stärker, als sie der Geldpolitik der Leitwährung vor Gründung der Union folgten. Wir greifen auf Panel-GARCH Modelle zurück, um den Einfluss der Geldpolitik der EZB relativ zum Einfluss der Bundesbank auf die Geldpolitik in Großbritannien, der Schweiz, Norwegen, Dänemark und Schweden zu testen. Die empirische Analyse bestätigt die aus dem formalen Modell abgeleiteten Hypothesen. Die faktische geldpolitische Autonomie der Länder außerhalb der Währungsunion sinkt mit deren Etablierung.Interest Rates, Monetary Policy Autonomy, Currency Unions, Bundesbank, European Central Bank

External effects of currency unions

Argument: The paper argues that the introduction of the Euro has considerably reduced de facto monetary policy autonomy in non-ECU members. We start from a simple Mundellian model, in which currency unions raise economic efficiency but reduce monetary policy autonomy. Our main argument holds that governments in countries that did not join the currency union lose monetary policy autonomy if the establishment of a currency union increases the size of the key currency area. The increase in the size of the key currency area has two external effects on countries remaining outside the currency union: Firstly, it renders stable exchange-rates to the currency union slightly more important, because the value of goods imported from countries within the currency union increases and because the countries inside the union have more synchronized business cycles. Secondly and more importantly, we claim that any given change in the real interest-rate differential leads to an exchange-rate effect, which is larger the smaller the domestic currency area is relative to the key currency area. Consequently, governments in non-member countries have to pay a higher price if they seek to stimulate the domestic economy. Hypotheses: a) Exchange-rate effects on changes in the real interest rate differential are larger, if currency areas are less equal in size. b) Outsider countries more closely follow the interest-rate policy of the currency union than they had previously followed the monetary policy of the anchor currency. Empirics: We employ a panel-GARCH model to estimate the impact of changes in the key currency real interest rate on the real interest rate of other countries. Specifically, we analyze the influence of Germany’s and the Eurozone’s monetary policy on the monetary policy of Great Britain, Denmark, Norway, Sweden, and Switzerland. Results: Our results support the assumptions underlying our model as well as our main argument. De facto monetary autonomy of countries remaining outside a currency union declines with the establishment of the union.Der Artikel argumentiert, dass die Einführung des Euro die faktische geldpolitische Autonomie auch in Staaten reduziert hat, die der Europäischen Währungsunion nicht beigetreten sind. Das Argument basiert auf einem einfachen Mudellianischen Modell, in dem Währungsunionen die wirtschaftliche Effizienz steigern aber zugleich die geldpolitische Autonomie reduzieren. Wir zeigen über das Standardmodell hinaus, dass Länder, die der Währungsunion nicht beitreten, geldpolitische Autonomie einbüßen, wenn sich durch die Währungsunion die Größe des Leitwährungsraumes erhöht. Diese Vergrößerung des Leitwährungsraumes hat zwei Auswirkungen auf Länder außerhalb der Union: Erstens steigt die Bedeutung stabiler Wechselkurse leicht an, weil der Wert importierter Güter aus dem Währungsgebiet zunimmt und weil die Länder der Union stärker synchronisierte Konjunkturzyklen aufweisen als vor der Gründung der Währungsunion. Zweitens steigt durch die Vergrößerung der Leitwährung aber der Einfluss von Veränderungen der Zinsdifferenz auf die Wechselkurse zwischen Währungen außerhalb der Währungsunion und der Unionswährung an. Folglich müssen Länder eine stärkere Abwertung ihrer Währung hinnehmen, wenn sie die Zinsen senken, um die Konjunktur anzukurbeln. Wir testen dieses Argument anhand der zwei Kernhypothesen: a) Wechselkurse reagieren umso stärker auf Veränderungen der Zinsdifferenz, je größer der Leitwährungsraum ist. b) Länder außerhalb der Währungsunion folgen der Geldpolitik der Union stärker, als sie der Geldpolitik der Leitwährung vor Gründung der Union folgten. Wir greifen auf Panel-GARCH Modelle zurück, um den Einfluss der Geldpolitik der EZB relativ zum Einfluss der Bundesbank auf die Geldpolitik in Großbritannien, der Schweiz, Norwegen, Dänemark und Schweden zu testen. Die empirische Analyse bestätigt die aus dem formalen Modell abgeleiteten Hypothesen. Die faktische geldpolitische Autonomie der Länder außerhalb der Währungsunion sinkt mit deren Etablierung

Monetary Policy Autonomy in European Non-Euro Countries: 1980–2005

We argue that the European currency union (ECU) reduced the de facto monetary policy autonomy of EU countries abstaining from introducing the euro. The large share of imports from euro zone countries renders a close alignment of monetary policy to the interest rate set by the European Central Bank (ECB) necessary if the monetary authorities of countries outside the ECU want to impede the import of inflation from the euro zone or a declining competitiveness of the domestic industry. In turn, the increasing role of the euro as an international reserve medium equal to the US dollar reduced the monetary policy autonomy of countries importing more goods and services from the euro zone than from the dollar zone. An empirical analysis of monetary policy in the United Kingdom, Denmark and Sweden lends support to our theoretical argument. Analysing the shortterm adjustments of central bank interest rates in these three EU countries, which did not introduce the euro, we show that these countries' monetary policies more closely follow the ECB's policy than they followed the Bundesbank's policy before 1994. In addition, we demonstrate the diminishing influence of the dollar on monetary policy in the UK, Denmark and Sweden since the countries of the Economic and Monetary Union harmonized monetary policies

Case selection and causal inferences in qualitative comparative research

Traditionally, social scientists perceived causality as regularity. As a consequence, qualitative comparative case study research was regarded as unsuitable for drawing causal inferences since a few cases cannot establish regularity. The dominant perception of causality has changed, however. Nowadays, social scientists define and identify causality through the counterfactual effect of a treatment. This brings causal inference in qualitative comparative research back on the agenda since comparative case studies can identify counterfactual treatment effects. We argue that the validity of causal inferences from the comparative study of cases depends on the employed case-selection algorithm. We employ Monte Carlo techniques to demonstrate that different case-selection rules strongly differ in their ex ante reliability for making valid causal inferences and identify the most and the least reliable case selection rules

Case selection and causal inferences in qualitative comparative research

Traditionally, social scientists perceived causality as regularity. As a consequence, qualitative comparative case study research was regarded as unsuitable for drawing causal inferences since a few cases cannot establish regularity. The dominant perception of causality has changed, however. Nowadays, social scientists define and identify causality through the counterfactual effect of a treatment. This brings causal inference in qualitative comparative research back on the agenda since comparative case studies can identify counterfactual treatment effects. We argue that the validity of causal inferences from the comparative study of cases depends on the employed case-selection algorithm. We employ Monte Carlo techniques to demonstrate that different case-selection rules strongly differ in their ex ante reliability for making valid causal inferences and identify the most and the least reliable case selection rules

Motherhood in academia: A novel dataset of <scp>UK</scp> academic women with an application to maternity leave uptake

AbstractMotherhood is widely believed to be an important factor slowing down the career progression of women. We present a novel database that combines an original survey of women and mothers working in the UK Higher Education sector with data on the occupational maternity benefits offered by academic employers. This allows users to track, at the individual level, child‐bearing experiences and employment histories simultaneously. We describe several aspects of mothers' experiences in academia and how those evolve over the years. We also conduct an empirical analysis of the determinants of maternity leave uptake, showing that women's employment status and family arrangements significantly impact the types of maternity leave – paid or unpaid – taken.</jats:p

Motherhood in academia : a novel dataset of UK academic women with an application to maternity leave uptake

Motherhood is widely believed to be an important factor slowing down the career progression of women. We present a novel database that combines an original survey of women and mothers working in the UK Higher Education sector with data on the occupational maternity benefits offered by academic employers. This allows users to track, at the individual level, child‐bearing experiences and employment histories simultaneously. We describe several aspects of mothers' experiences in academia and how those evolve over the years. We also conduct an empirical analysis of the determinants of maternity leave uptake, showing that women's employment status and family arrangements significantly impact the types of maternity leave – paid or unpaid – taken

Measuring universal health coverage based on an index of effective coverage of health services in 204 countries and territories, 1990–2019 : A systematic analysis for the Global Burden of Disease Study 2019

Background Achieving universal health coverage (UHC) involves all people receiving the health services they need, of high quality, without experiencing financial hardship. Making progress towards UHC is a policy priority for both countries and global institutions, as highlighted by the agenda of the UN Sustainable Development Goals (SDGs) and WHO's Thirteenth General Programme of Work (GPW13). Measuring effective coverage at the health-system level is important for understanding whether health services are aligned with countries' health profiles and are of sufficient quality to produce health gains for populations of all ages. Methods Based on the Global Burden of Diseases, Injuries, and Risk Factors Study (GBD) 2019, we assessed UHC effective coverage for 204 countries and territories from 1990 to 2019. Drawing from a measurement framework developed through WHO's GPW13 consultation, we mapped 23 effective coverage indicators to a matrix representing health service types (eg, promotion, prevention, and treatment) and five population-age groups spanning from reproductive and newborn to older adults (≥65 years). Effective coverage indicators were based on intervention coverage or outcome-based measures such as mortality-to-incidence ratios to approximate access to quality care; outcome-based measures were transformed to values on a scale of 0–100 based on the 2·5th and 97·5th percentile of location-year values. We constructed the UHC effective coverage index by weighting each effective coverage indicator relative to its associated potential health gains, as measured by disability-adjusted life-years for each location-year and population-age group. For three tests of validity (content, known-groups, and convergent), UHC effective coverage index performance was generally better than that of other UHC service coverage indices from WHO (ie, the current metric for SDG indicator 3.8.1 on UHC service coverage), the World Bank, and GBD 2017. We quantified frontiers of UHC effective coverage performance on the basis of pooled health spending per capita, representing UHC effective coverage index levels achieved in 2019 relative to country-level government health spending, prepaid private expenditures, and development assistance for health. To assess current trajectories towards the GPW13 UHC billion target—1 billion more people benefiting from UHC by 2023—we estimated additional population equivalents with UHC effective coverage from 2018 to 2023. Findings Globally, performance on the UHC effective coverage index improved from 45·8 (95% uncertainty interval 44·2–47·5) in 1990 to 60·3 (58·7–61·9) in 2019, yet country-level UHC effective coverage in 2019 still spanned from 95 or higher in Japan and Iceland to lower than 25 in Somalia and the Central African Republic. Since 2010, sub-Saharan Africa showed accelerated gains on the UHC effective coverage index (at an average increase of 2·6% [1·9–3·3] per year up to 2019); by contrast, most other GBD super-regions had slowed rates of progress in 2010–2019 relative to 1990–2010. Many countries showed lagging performance on effective coverage indicators for non-communicable diseases relative to those for communicable diseases and maternal and child health, despite non-communicable diseases accounting for a greater proportion of potential health gains in 2019, suggesting that many health systems are not keeping pace with the rising non-communicable disease burden and associated population health needs. In 2019, the UHC effective coverage index was associated with pooled health spending per capita (r=0·79), although countries across the development spectrum had much lower UHC effective coverage than is potentially achievable relative to their health spending. Under maximum efficiency of translating health spending into UHC effective coverage performance, countries would need to reach $1398 pooled health spending per capita (US$ adjusted for purchasing power parity) in order to achieve 80 on the UHC effective coverage index. From 2018 to 2023, an estimated 388·9 million (358·6–421·3) more population equivalents would have UHC effective coverage, falling well short of the GPW13 target of 1 billion more people benefiting from UHC during this time. Current projections point to an estimated 3·1 billion (3·0–3·2) population equivalents still lacking UHC effective coverage in 2023, with nearly a third (968·1 million [903·5–1040·3]) residing in south Asia. Interpretation The present study demonstrates the utility of measuring effective coverage and its role in supporting improved health outcomes for all people—the ultimate goal of UHC and its achievement. Global ambitions to accelerate progress on UHC service coverage are increasingly unlikely unless concerted action on non-communicable diseases occurs and countries can better translate health spending into improved performance. Focusing on effective coverage and accounting for the world's evolving health needs lays the groundwork for better understanding how close—or how far—all populations are in benefiting from UHC