Where Are Global and U.S. Trade Heading in the Aftermath of the Trade Collapse: Issues and Alternative Scenarios
Filippo di Mauro, Joseph Gruber, Bernd Schnatz, Nico Zorell
FRB International Finance Discussion Paper,
No. 1017,
2011
Abstract
Global and U.S. trade declined dramatically in the wake of the global financial crisis in late 2008 and early 2009. The subsequent recovery in trade, while vigorous at first, gradually lost momentum in 2010. Against this backdrop, this paper explores the prospects for global and U.S. trade in the medium term. We develop a unified empirical framework ? an error correction model ? that exploits the cointegrating relationship between trade and economic activity. The model allows us to juxtapose several scenarios with different assumptions about the strength of GDP growth going forward and the relationship between trade and economic activity. Our analysis suggests that during the crisis both world trade and U.S. exports declined significantly more than would have been expected on the basis of historical relationships with economic activity. Moreover, this gap between actual and equilibrium trade is closing only slowly and could persist for some time to come.
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Central and Eastern European Countries in the Global Financial Crisis: A Typical Twin Crisis?
Diemo Dietrich, Tobias Knedlik, Axel Lindner
Post-Communist Economies,
No. 4,
2011
Abstract
This paper shows that during the Great Recession, banking and currency crises occurred simultaneously in Central and Eastern Europe. Events, however, differed widely from what happened during the Asian crisis that usually serves as the model case for the concept of twin crises. We look at three elements that help explaining the nature of events in Central and Eastern Europe: the problem of currency mismatches, the relation between currency and banking crises, and the importance of multinational banks for financial stability. It is shown that theoretical considerations concerning internal capital markets of multinational banks help understand what happened on capital markets and in the financial sector of the region. We discuss opposing effects of multinational banking on financial stability and find that institutional differences are the key to understand differing effects of the global financial crisis. In particular, we argue that it matters if international activities are organized by subsidiaries or by cross-border financial services, how large the share of foreign currency-denominated credit is and whether the exchange rate is fixed or flexible. Based on these three criteria we give an explanation why the pattern of the crisis in the Baltic States differed markedly from that in Poland and the Czech Republic, the two largest countries of the region.
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Vigorous upswing continues
Wirtschaft im Wandel,
No. 3,
2011
Abstract
Das preisbereinigte Bruttoinlandsprodukt in Deutschland wird 2011 um 3% zunehmen. Die Beschäftigung wird weiter kräftig ausgeweitet und die Arbeitslosenquote auf 6,6% sinken. Die positive Entwicklung auf dem Arbeitsmarkt kräftigt die Binnennachfrage. Der Beitrag des Außenhandels ist nach wie vor positiv, wird aber kleiner werden; die wesentlichen Risiken für die deutsche Konjunktur kommen von außenwirtschaftlicher Seite.
Die Weltwirtschaft befindet sich im Aufschwung. Im Winterhalbjahr 2010/2011 expandieren Produktion und Handel weltweit stark, und die Frühindikatoren auf der Basis von Auftragseingängen und Stimmungsumfragen sprechen dafür, dass sich das Tempo des Produktionsanstiegs in den kommenden Monaten beschleunigen dürfte. Hintergrund des Aufschwungs ist eine seit Ausbruch der Finanzkrise ausgesprochen expansive Geldpolitik rund um den Globus.
Die deutsche Wirtschaft profitiert vom globalen Aufschwung, verleiht ihm aber auch Impulse. Mit dem Anstieg des preisbereinigten Bruttoinlandsprodukts um 3,6% belegte Deutschland bezüglich des Produktionszuwachses im Jahr 2010 unter den Industrieländern einen Spitzenplatz; freilich war das reale Bruttoinlandsprodukt im Zuge der Krise hier auch besonders stark gesunken. Mittlerweile hat es sein Niveau vom vierten Quartal 2007, also kurz vor Ausbruch der Finanz- und Wirtschaftskrise, wieder erreicht.
Frühindikatoren deuten darauf hin, dass sich der Aufschwung in Deutschland kraftvoll fortsetzen dürfte. Dafür sprechen auch die weiterhin expansive Ausrichtung der Geldpolitik, die Dynamik in den Schwellenländern und die guten Investitionsbedingungen. Für das Jahr 2011 erwarten wir einen Anstieg des Bruttoinlandsproduktes um real 3,0% (vgl. Tabelle);das 66% Prognoseintervall unter Ausschluss von Extremrisiken reicht von 2,5% bis 3,5%. Die Beschäftigung wird weiter kräftig ausgeweitet; die Anzahl der Erwerbstätigen wird um etwa eine halbe Million zunehmen und die Arbeitslosenquote auf 6,6% sinken. Im Jahr 2012 wird sich das konjunkturelle Tempo etwas verlangsamen und das reale Bruttoinlandsprodukt um 1,9% zulegen. Die Arbeitslosenquote dürfte weiter auf 5,8% sinken. Die zunehmende Knappheit auf dem Arbeitsmarkt führt zu stärker steigenden Löhnen und Preisen. Der Anstieg der Verbraucherpreise wird 2011, auch wegen des Ölpreissprungs Anfang des Jahres, voraussichtlich 2,3% und 2012 anschließend 1,8% betragen. Der Aufschwung führt dazu, dass das Defizit der öffentlichen Haushalte wieder deutlich unter das Maastricht-Kriterium sinkt, und zwar auf 1,4% in Relation zum Bruttoinlandsprodukt im Jahr 2011 und auf 0,4% im Jahr darauf.
Risiken für die deutsche Konjunktur bestehen vor allem auf außenwirtschaftlicher Seite: Das Basisszenario der vorliegenden Prognose geht von einer raschen Beruhigung der Lage in den arabischen Ländern aus, die aktuelle Gefahr einer neuen Ölkrise besteht jedoch. Weitere Risiken ergeben sich aus der außerordentlichen Liquiditätsversorgung durch die Zentralbanken der fortgeschrittenen Volkswirtschaften. Einerseits könnte es durch diese in den Schwellenländern, die durch höhere Zinsen Kapital attrahieren, zu einer Überhitzung kommen, die kurzfristig auch hierzulande stimulierend wirken könnte. Andererseits führen die Inflationsrisiken zunehmend zu Unsicherheit, die bereits im Prognosezeitraum belastend wirken könnte. Außerdem bestehen in den fortgeschrittenen Volkswirtschaften weiterhin Risiken aus den Nachwirkungen der Finanz- und Wirtschaftskrise. Vielerorts sind die Strukturprobleme der Finanzpolitik und der Bankenaufsicht nicht gelöst.
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The Political Setting of Social Security Contributions in Europe in the Business Cycle
Toralf Pusch, Ingmar Kumpmann
IWH Discussion Papers,
No. 4,
2011
Abstract
Social security revenues are influenced by business cycle movements. In order to
support the working of automatic stabilizers it would be necessary to calculate social insurance contribution rates independently from the state of the business cycle. This paper investigates whether European countries set social contribution rates according to such a rule. By means of VAR estimations, country-specific effects can be analyzed – in contrast to earlier studies which used a panel design. As a result, some countries under investigation seem to vary their social contribution rates in a procyclical way.
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Fiscal Spending Multiplier Calculations based on Input-Output Tables – with an Application to EU Members
Toralf Pusch, A. Rannberg
Abstract
Fiscal spending multiplier calculations have been revived in the aftermath of the
global financial crisis. Much of the current literature is based on VAR estimation
methods and DSGE models. The aim of this paper is not a further deepening of
this literature but rather to implement a calculation method of multipliers which is
suitable for open economies like EU member states. To this end, Input-Output tables are used as by this means the import intake of domestic demand components can be isolated in order to get an appropriate base for the calculation of the relevant import quotas. The difference of this method is substantial – on average the calculated multipliers are 15% higher than the conventional GDP fiscal spending multiplier for EU members. Multipliers for specific spending categories are comparably high, ranging between 1.4 and 1.8 for many members of the EU. GDP drops due to budget consolidation might therefore be substantial if monetary policy is not able to react in an expansionary manner.
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Macroeconomic Challenges in the Euro Area and the Acceding Countries
Katja Drechsel
Dissertation, Fachbereich Wirtschaftswissenschaften der Universität Osnabrück,
2010
Abstract
deutscher Titel: Makroökonomische Herausforderungen für die Eurozone und die Beitrittskandidaten
Abstract: The conduct of effective economic policy faces a multiplicity of macroeconomic challenges, which requires a wide scope of theoretical and empirical analyses. With a focus on the European Union, this doctoral dissertation consists of two parts which make empirical and methodological contributions to the literature on forecasting real economic activity and on the analysis of business cycles in a boom-bust framework in the light of the EMU enlargement. In the first part, we tackle the problem of publication lags and analyse the role of the information flow in computing short-term forecasts up to one quarter ahead for the euro area GDP and its main components. A huge dataset of monthly indicators is used to estimate simple bridge equations. The individual forecasts are then pooled, using different weighting schemes. To take into consideration the release calendar of each indicator, six forecasts are compiled successively during the quarter. We find that the sequencing of information determines the weight allocated to each block of indicators, especially when the first month of hard data becomes available. This conclusion extends the findings of the recent literature. Moreover, when combining forecasts, two weighting schemes are found to outperform the equal weighting scheme in almost all cases. In the second part, we focus on the potential accession of the new EU Member States in Central and Eastern Europe to the euro area. In contrast to the discussion of Optimum Currency Areas, we follow a non-standard approach for the discussion on abandonment of national currencies the boom-bust theory. We analyse whether evidence for boom-bust cycles is given and draw conclusions whether these countries should join the EMU in the near future. Using a broad range of data sets and empirical methods we document credit market imperfections, comprising asymmetric financing opportunities across sectors, excess foreign currency liabilities and contract enforceability problems both at macro and micro level. Furthermore, we depart from the standard analysis of comovements of business cycles among countries and rather consider long-run and short-run comovements across sectors. While the results differ across countries, we find evidence for credit market imperfections in Central and Eastern Europe and different sectoral reactions to shocks. This gives favour for the assessment of the potential euro accession using this supplementary, non-standard approach.
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The global downturn and its impact on euro area exports and competitiveness
Filippo di Mauro, Katrin Forster, Ana Lima
ECB Occasional Paper Series,
No. 119,
2010
Abstract
World trade contracted sharply in late 2008 and early 2009 following the deepening of the financial crisis in September 2008. This paper discusses the main mechanisms behind the global downturn in trade and its impact on euro area exports and competitiveness. It finds that the euro area was hit particularly hard by the contraction in global demand.
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Do Banks Benefit from Internationalization? Revisiting the Market Power-Risk Nexus
Claudia M. Buch, C. T. Koch, Michael Koetter
Abstract
Recent developments on international financial markets have called the benefits of
bank globalization into question. Large, internationally active banks have
acquired substantial market power, and international activities have not
necessarily made banks less risky. Yet, surprisingly little is known about the
actual link between bank internationalization, bank risk, and market power.
Analyzing this link is the purpose of this paper. We jointly estimate the
determinants of risk and market power of banks, and we analyze the effects of
changes in terms of the number of foreign countries (the extensive margin) and
the volume of foreign assets (the intensive margin). Our paper has four main
findings. First, there is a strong negative feedback effect between risk and market
power. Second, banks with higher shares of foreign assets, in particular those held
through foreign branches, have higher market power at home. Third, holding
assets in a large number of foreign countries tends to increase bank risk. Fourth,
the impact of internationalization differs across banks from different banking
groups and of different size.
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Stages of the 2007/2008 Global Financial Crisis: Is there a Wandering Asset-Price Bubble?
Lucjan T. Orlowski
Einzelveröffentlichungen,
No. 3,
2008
Abstract
This study argues that the severity of the current global financial crisis is strongly influenced by changeable allocations of the global savings. This process is named a “wandering asset bubble”. Since its original outbreak induced by the demise of the subprime mortgage market and the mortgage-backed securities in the U.S., this crisis has reverberated across other credit areas, structured financial products and global financial institutions. Four distinctive stages of the crisis are identified: the meltdown of the subprime mortgage market, spillovers into broader credit market, the liquidity crisis epitomized by the fallout of Bear Sterns with some contagion effects on other financial institutions, and the commodity price bubble. Monetary policy responses aimed at stabilizing financial markets are proposed.
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