Real Effective Exchange Rate Misalignment in the Euro Area: A Counterfactual Analysis
Makram El-Shagi, Axel Lindner, Gregor von Schweinitz
Abstract
Were real effective exchange rates (REER) of Euro area member countries drastically misaligned at the outbreak of the global financial crisis? The answer is difficult to determine because economic theory gives no simple guideline for determining the equilibrium values of real exchange rates, and the determinants of those values might have been distorted as well. To overcome these limitations, we use synthetic matching to construct a counterfactual economy for each member as a linear combination of a large set of non-Euro area countries. We find that Euro area crisis countries are best described by a mixture of advanced and emerging economies. Comparing the actual REER with those of the counterfactuals gives sensible estimates of the misalignments at the start of the crisis: All peripheral countries were strongly overvalued, while high undervaluation is only observed for Finland.
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The Skills Balance in Germany’s Import Intensity of Exports: An Input-Output Analysis
Udo Ludwig, Hans-Ulrich Brautzsch
Intereconomics,
No. 2,
2014
Abstract
In the decade prior to the economic and financial crisis, Germany’s net exports increased in absolute terms as well as relative to the growing level of import intensity of domestically produced export goods and services. This article analyses the direct and indirect employment effects induced both by exports as well as by of the import intensity of the production process of export goods and services on the skills used. It shows that Germany’s export surpluses led to positive net employment effects. Although the volume of imports of intermediate goods increased and was augmented by the rise in exports, it could not undermine the overall positive employment effect.
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Macroeconomic Policy Formation in Africa - General Issues
Karl Wohlmuth, Achim Gutowski, M. Kandil, Tobias Knedlik, O. O. Uzor
African Development Perspectives Yearbook, Vol. 16,
2014
Abstract
In Volume 16 with the title “Macroeconomic Policy Formation in Africa - General Issues“ new macroeconomic policy frameworks for Africa are discussed. Emphasis is on macroeconomic policies focusing on sustainable and inclusive growth, especially by considering the employment targeting of macroeconomic policy frameworks in Africa. The responses of the macroeconomic policymakers in Africa to the Euro crisis and to the recent globalization trends are reviewed and analyzed. The role of macroeconomic policies for generating sustainable and inclusive growth is also discussed. In Volume 16 also the economics of the “Arab Spring“ countries is analyzed, by focusing on the socioeconomic conditions and the economic policy factors that have led to the “Arab Spring“ events. Highlighted are the cases of Egypt and Tunisia, and the new strategic and policy frameworks in these countries after the democratic changes. An agenda for comprehensive policy reforms for the Arab countries in Africa is presented. In forthcoming Volume 17 with the title “Macroeconomic Policy Formation in Africa - Country Cases“ macroeconomic policies in African post-conflict countries and in the ECOWAS region are considered. Volume 17 contains also a section with Book Reviews and Book Notes.
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Adjustments in the Use of Temporary Agency before and during the 2008/2009 Economic Crisis
Steffen Müller
Industrielle Beziehungen,
No. 1,
2014
Abstract
Der Anstieg in der Leiharbeitsnutzung in Deutschland bis zur Wirtschaftskrise der Jahre 2008 und 2009 war geprägt durch die verstärkte Nutzung in größeren Industriebetrieben und vollzog sich in erster Linie entlang der intensive margin, also durch eine erhöhte Leiharbeitsintensität in den Nutzerbetrieben. Diese Vorgänge können mit transaktionskostentheoretischen Argumenten und gestiegenem internationalen Wettbewerbsdruck erklärt werden, und sie deuten auf eine gestiegene Produktivität in den Nutzerbetrieben hin. Der drastische Rückgang in der Leiharbeitsnutzung während der Krise betraf vor allem Exporteure und größere Industriebetriebe und vollzog sich primär entlang der extensive margin. Die Beschäftigungschancen im Leiharbeitssektor hingen in besonders starkem Maße von der internationalen Nachfrage nach deutschen Industriegütern ab.
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Modelling Macroeconomic Risk: The Genesis of the European Debt Crisis
Gregor von Schweinitz
Hochschulschrift, Juristische und Wirtschaftswissenschaftliche Fakultät der Martin-Luther-Universität Halle-Wittenberg,
2013
Abstract
Diverging European sovereign bond yields after 2008 are the most visible sign of the European debt crisis. This dissertation examines in a first step, to which extent the development of yields is driven by credit and liquidity risk, and how it is influenced by general uncertainty on financial markets. It can be shown that yields are driven to a significant degree by a flight towards bonds of high liquidity in times of high market uncertainty. In a second step, high yields are interpreted as a sign of an existing crisis in the respective country. Using the signals approach, the early-warning capabilities of four different proposals for the design of the scoreboard as part of the “Macroeconomic Imbalances Procedure” (introduced in December 2011 by the European Commission) are tested, advocating a scoreboard including a variety of many different indicators. In a third step, the methodology of the signals approach is extended to include also results on significance.
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How Do Insured Deposits Affect Bank Risk? Evidence from the 2008 Emergency Economic Stabilization Act
Claudia Lambert, Felix Noth, Ulrich Schüwer
Abstract
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The New EU Countries and Euro Adoption
Hubert Gabrisch, Martina Kämpfe
Intereconomics,
No. 3,
2013
Abstract
In the new member states of the EU which have not yet adopted the euro, previous adoption strategies have come under scrutiny. The spillovers and contagion from the global financial crisis revealed a new threat to the countries’ real convergence goal, namely considerable vulnerability to the transmission of financial instability to the real economy. This paper demonstrates the existence of extreme risks for real convergence and argues in favour of a new adoption strategy which does not announce a target date for the currency changeover and which allows for more flexible and countercyclical monetary, fiscal and wage policies.
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Sovereign Credit Risk Co-movements in the Eurozone: Simple Interdependence or Contagion?
Manuel Buchholz, Lena Tonzer
UniCredit & Universities Foundation, Working Paper Series No. 47,
No. 47,
2013
published in: International Finance
Abstract
We investigate credit risk co-movements and contagion in sovereign debt markets of 17 industrialized countries for the period 2008-2012. We use dynamic conditional correlations of sovereign CDS spreads to detect contagion. This approach allows separating the channels through which contagion occurs from the determinants of simple interdependence. The results show that, first, sovereign credit risk comoves considerably, in particular among eurozone countries and during the sovereign debt crisis. Second, contagion cannot be attributed to one moment in time but varies across time and countries. Third, similarities in economic fundamentals, cross-country linkages in banking, and common market sentiment constitute the main channels of contagion.
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