The use of payment cards in Greece more than tripled in value between 2014 and 2017. Their penetration lifted off with the imposition of capital controls in 2015 and then remained on an uptrend, aided further by the measures of law 4446/2016. According to the findings of the study: (i) the law had a statistically significant, positive impact on card usage, especially in the second half of 2017, controlling for the effects of macroeconomic factors and capital controls and (ii) the penetration of electronic payments had a significant positive impact on tax compliance. Nevertheless, the average level of card use in Greece has remained lower than the EU average, while it presents significant heterogeneity across sectors and geographical areas. In conclusion, more targeted measures are warranted in order to enhance further the penetration of electronic payments, which would yield even greater fiscal benefits.
{"title":"Penetration of Digital Payments in Greece after Capital Controls: Determinants and Impact on VAT Revenues","authors":"S. Danchev, Georgios Gatopoulos, Nikolaos Vettas","doi":"10.1093/cesifo/ifz019","DOIUrl":"https://doi.org/10.1093/cesifo/ifz019","url":null,"abstract":"The use of payment cards in Greece more than tripled in value between 2014 and 2017. Their penetration lifted off with the imposition of capital controls in 2015 and then remained on an uptrend, aided further by the measures of law 4446/2016. According to the findings of the study: (i) the law had a statistically significant, positive impact on card usage, especially in the second half of 2017, controlling for the effects of macroeconomic factors and capital controls and (ii) the penetration of electronic payments had a significant positive impact on tax compliance. Nevertheless, the average level of card use in Greece has remained lower than the EU average, while it presents significant heterogeneity across sectors and geographical areas. In conclusion, more targeted measures are warranted in order to enhance further the penetration of electronic payments, which would yield even greater fiscal benefits.","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cesifo/ifz019","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49004457","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We provide—to the best of our knowledge—the first empirical study on the political economy of public spending on vocational education. Vocational schools raise human capital among non-academics and give the latter a stronger bargaining position in wage negotiation—thereby supporting the clientele of leftwing parties. At the same time, they provide publicly funded inputs that raise firm productivity—an aim particularly important for conservative parties. We analyze expenditures on vocational schools of 301 West-German counties between 2002 and 2013 using two-way fixed effects and mixed models. We find the counties’ expenditures on vocational schools to decrease in the political power of Social Democrats and increase in the political power of Christian conservatives in the county council. Expenditures are higher in election years. We find no support for the conjecture building on Jensen (2011, Compar. Polit. Stud. 44, 412–435) according to which expenditures on vocational education are higher in regions suffering from deindustrialization. (JEL codes: H75, D72).
{"title":"Party Ideology and Vocational Education Spending: Empirical Evidence from Germany","authors":"I. Bischoff, Julia Hauschildt","doi":"10.1093/cesifo/ifaa006","DOIUrl":"https://doi.org/10.1093/cesifo/ifaa006","url":null,"abstract":"We provide—to the best of our knowledge—the first empirical study on the political economy of public spending on vocational education. Vocational schools raise human capital among non-academics and give the latter a stronger bargaining position in wage negotiation—thereby supporting the clientele of leftwing parties. At the same time, they provide publicly funded inputs that raise firm productivity—an aim particularly important for conservative parties. We analyze expenditures on vocational schools of 301 West-German counties between 2002 and 2013 using two-way fixed effects and mixed models. We find the counties’ expenditures on vocational schools to decrease in the political power of Social Democrats and increase in the political power of Christian conservatives in the county council. Expenditures are higher in election years. We find no support for the conjecture building on Jensen (2011, Compar. Polit. Stud. 44, 412–435) according to which expenditures on vocational education are higher in regions suffering from deindustrialization. (JEL codes: H75, D72).","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-08-21","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cesifo/ifaa006","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41774747","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract I explore the association between the severity of lockdown policies in the first half of 2020 and mortality rates. Using two indices from the Blavatnik Centre’s COVID-19 policy measures and comparing weekly mortality rates from 24 European countries in the first halves of 2017–2020, addressing policy endogeneity in two different ways, and taking timing into account, I find no clear association between lockdown policies and mortality development.
{"title":"Did Lockdown Work? An Economist’s Cross-Country Comparison","authors":"C. Bjørnskov","doi":"10.1093/cesifo/ifab003","DOIUrl":"https://doi.org/10.1093/cesifo/ifab003","url":null,"abstract":"Abstract I explore the association between the severity of lockdown policies in the first half of 2020 and mortality rates. Using two indices from the Blavatnik Centre’s COVID-19 policy measures and comparing weekly mortality rates from 24 European countries in the first halves of 2017–2020, addressing policy endogeneity in two different ways, and taking timing into account, I find no clear association between lockdown policies and mortality development.","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-08-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cesifo/ifab003","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45994950","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The objective of this article is to explain populist attitudes that are prevailing in a number of European democracies. Populist attitudes usually lead to social protests and populist votes. We capture the populist wave by relying on values that are traditionally viewed as populist—such as distrust of institutions and neighbors, rejection of migrations, and strong preferences for law and order—rather than on voting behavior. Our study covers the period 2004–2018 and 25 European countries for which we match aggregated indicators of populist values and social polarization based on ESS and SILC survey micro-data. We show that social polarization varies dramatically across European regions, but at the same time, some convergence is observed. Our estimations confirm, in most cases, a positive and statistically significant relation between social polarization and populist attitudes. (JEL codes: D63 and I30)
{"title":"Populism and Social Polarization in European Democracies","authors":"V. Ginsburgh, S. Perelman, P. Pestieau","doi":"10.1093/cesifo/ifab006","DOIUrl":"https://doi.org/10.1093/cesifo/ifab006","url":null,"abstract":"The objective of this article is to explain populist attitudes that are prevailing in a number of European democracies. Populist attitudes usually lead to social protests and populist votes. We capture the populist wave by relying on values that are traditionally viewed as populist—such as distrust of institutions and neighbors, rejection of migrations, and strong preferences for law and order—rather than on voting behavior. Our study covers the period 2004–2018 and 25 European countries for which we match aggregated indicators of populist values and social polarization based on ESS and SILC survey micro-data. We show that social polarization varies dramatically across European regions, but at the same time, some convergence is observed. Our estimations confirm, in most cases, a positive and statistically significant relation between social polarization and populist attitudes. (JEL codes: D63 and I30)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44174617","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Abstract Based on a survey (7–13 April 2020) we evaluate the reaction of Swiss firms towards the COVID-19 crisis. Firms show little pro-active reactions towards the crisis, but decrease their business activities. The firms in the survey report that the decline in foreign demand is the single most important reason for their deteriorating business situation. Firms that faced a more difficult business situation before the crisis are affected more severely during the crisis. Moreover, we investigate the impact of the Swiss federal loan program (Bundeshilfe) on the business activities. To this end, we develop a stylized theoretical model of financially constrained heterogeneous firms. We find that policy makers face a trade-off between immediate higher unemployment rates and long-term higher public spending. The former arises from a combination of a too strong economic impact of the COVID-19 lockdown (demand drop) and too low levels of loans provided. Nevertheless, providing (too) high levels of loans to firms creates zombie firms that are going to default in the future leading to an increase in public spending. (JEL codes: D22, D25, D84, and G33)
{"title":"COVID-19: guaranteed Loans and Zombie Firms","authors":"Benedikt Zoller-Rydzek, Florian Keller","doi":"10.2139/ssrn.3619744","DOIUrl":"https://doi.org/10.2139/ssrn.3619744","url":null,"abstract":"Abstract Based on a survey (7–13 April 2020) we evaluate the reaction of Swiss firms towards the COVID-19 crisis. Firms show little pro-active reactions towards the crisis, but decrease their business activities. The firms in the survey report that the decline in foreign demand is the single most important reason for their deteriorating business situation. Firms that faced a more difficult business situation before the crisis are affected more severely during the crisis. Moreover, we investigate the impact of the Swiss federal loan program (Bundeshilfe) on the business activities. To this end, we develop a stylized theoretical model of financially constrained heterogeneous firms. We find that policy makers face a trade-off between immediate higher unemployment rates and long-term higher public spending. The former arises from a combination of a too strong economic impact of the COVID-19 lockdown (demand drop) and too low levels of loans provided. Nevertheless, providing (too) high levels of loans to firms creates zombie firms that are going to default in the future leading to an increase in public spending. (JEL codes: D22, D25, D84, and G33)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-06-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47286806","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This study adopts a historical perspective to investigate variations in output volatility within and across world economies. The analysis uses annual data for 37 OECD and non-OECD countries covering the last two centuries. We focus on the relationship between inflation and output volatility. The results of a panel analysis show a positive effect of inflation on output volatility. This finding is consistent with the view that low inflation has a stabilizing effect on output volatility over the long term.
{"title":"Inflation and Output Volatility: Evidence from International Historical Data","authors":"B. Ćorić","doi":"10.1093/cesifo/ifaa002","DOIUrl":"https://doi.org/10.1093/cesifo/ifaa002","url":null,"abstract":"\u0000 This study adopts a historical perspective to investigate variations in output volatility within and across world economies. The analysis uses annual data for 37 OECD and non-OECD countries covering the last two centuries. We focus on the relationship between inflation and output volatility. The results of a panel analysis show a positive effect of inflation on output volatility. This finding is consistent with the view that low inflation has a stabilizing effect on output volatility over the long term.","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cesifo/ifaa002","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42158764","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2020-06-01Epub Date: 2020-07-03DOI: 10.1093/cesifo/ifaa004
Jean Roch Donsimoni, René Glawion, Bodo Plachter, Klaus Wälde, Constantin Weiser
Many countries consider the lifting of restrictions of social contacts (RSC). We quantify the effects of RSC for Germany. We initially employ a purely statistical approach to predicting prevalence of Covid-19 if RSC had been upheld after 20 April. We employ these findings and feed them into our theoretical model. We find that the peak of the number of sick individuals would have been reached already end of April. The number of sick individuals would have fallen below 1000 at the beginning of July. If restrictions had been lifted completely on April 20, the number of sick should have risen quickly again from around 27 April. A balance between economic and individual costs of RSC and public health objectives consists in lifting RSC for activities that have high economic benefits but low health costs. In the absence of large-scale representative testing of CoV-2 infections, these activities can most easily be identified if federal states of Germany adopted exit strategies that differ across states.
{"title":"Should Contact Bans Have Been Lifted More in Germany?: A Quantitative Prediction of Its Effects.","authors":"Jean Roch Donsimoni, René Glawion, Bodo Plachter, Klaus Wälde, Constantin Weiser","doi":"10.1093/cesifo/ifaa004","DOIUrl":"10.1093/cesifo/ifaa004","url":null,"abstract":"<p><p>Many countries consider the lifting of restrictions of social contacts (RSC). We quantify the effects of RSC for Germany. We initially employ a purely statistical approach to predicting prevalence of Covid-19 if RSC had been upheld after 20 April. We employ these findings and feed them into our theoretical model. We find that the peak of the number of sick individuals would have been reached already end of April. The number of sick individuals would have fallen below 1000 at the beginning of July. If restrictions had been lifted completely on April 20, the number of sick should have risen quickly again from around 27 April. A balance between economic and individual costs of RSC and public health objectives consists in lifting RSC for activities that have high economic benefits but low health costs. In the absence of large-scale representative testing of CoV-2 infections, these activities can most easily be identified if federal states of Germany adopted exit strategies that <i>differ</i> across states.</p>","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7337731/pdf/ifaa004.pdf","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"39121983","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"OA","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The existing literature on fiscal policy has mainly employed linear models that found a small fiscal multiplier in developing economies. These findings challenge the importance and effectiveness of fiscal policy for these countries. However, linear models are not capable of distinguishing the size of a fiscal multiplier in the different phases of economic cycles. Responding to previous studies that confirm the regime dependency of a fiscal multiplier, we develop a non-linear panel threshold vector autoregression model to measure the size of the fiscal multiplier for developing countries. Our findings confirm asymmetry in the response of GDP to government expenditure shock during periods of recovery and downturn. Our main result shows that the response of GDP to government expenditure shock during a recovery period in developing countries is double that for developed ones. Our results also confirm a significantly larger fiscal multiplier during recovery than in an economic downturn. (JEL codes: E32, E62, G15, and C54)
{"title":"Reassessment of the Fiscal Multiplier in Developing Countries: Regime-Switching Model","authors":"Michal Hlaváček, Ilgar Ismayilov, A. Zeynalov","doi":"10.1093/CESIFO/IFAB009","DOIUrl":"https://doi.org/10.1093/CESIFO/IFAB009","url":null,"abstract":"\u0000 The existing literature on fiscal policy has mainly employed linear models that found a small fiscal multiplier in developing economies. These findings challenge the importance and effectiveness of fiscal policy for these countries. However, linear models are not capable of distinguishing the size of a fiscal multiplier in the different phases of economic cycles. Responding to previous studies that confirm the regime dependency of a fiscal multiplier, we develop a non-linear panel threshold vector autoregression model to measure the size of the fiscal multiplier for developing countries. Our findings confirm asymmetry in the response of GDP to government expenditure shock during periods of recovery and downturn. Our main result shows that the response of GDP to government expenditure shock during a recovery period in developing countries is double that for developed ones. Our results also confirm a significantly larger fiscal multiplier during recovery than in an economic downturn. (JEL codes: E32, E62, G15, and C54)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43956197","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The study characterizes an equilibrium bid function with three bidders in an average bid auction (ABA), where a winning bid is the one closest to an average of all submitted bids, when a cost overrun can occur, and an insolvent winner is penalized. First of all, every bidder bids an identical amount in the absence of the penalty. Meanwhile, when the penalty is charged high enough to prevent all bidders from breaching the contract due to cost overruns, either some bidders bid identically and the rest follow a strictly increasing bidding strategy, or all bidders place an identical bid. Based on the characterization, the ABA is compared to the first price reverse auction (FPA) in terms of a buyer’s benefit. The ABA could be more beneficial to the buyer without any penalty in spite of an insolvent winner’s default. If nobody defaults on his bid due to the high penalty, however, the FPA is good to the buyer. This result partly explains the rationale for the ABA in Italy. (JEL codes: C78, D82)
{"title":"Tradeoff between Default Risk and Efficiency Loss","authors":"Jin Hyung Lee","doi":"10.1093/cesifo/ifz013","DOIUrl":"https://doi.org/10.1093/cesifo/ifz013","url":null,"abstract":"\u0000 The study characterizes an equilibrium bid function with three bidders in an average bid auction (ABA), where a winning bid is the one closest to an average of all submitted bids, when a cost overrun can occur, and an insolvent winner is penalized. First of all, every bidder bids an identical amount in the absence of the penalty. Meanwhile, when the penalty is charged high enough to prevent all bidders from breaching the contract due to cost overruns, either some bidders bid identically and the rest follow a strictly increasing bidding strategy, or all bidders place an identical bid. Based on the characterization, the ABA is compared to the first price reverse auction (FPA) in terms of a buyer’s benefit. The ABA could be more beneficial to the buyer without any penalty in spite of an insolvent winner’s default. If nobody defaults on his bid due to the high penalty, however, the FPA is good to the buyer. This result partly explains the rationale for the ABA in Italy. (JEL codes: C78, D82)","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-03-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"https://sci-hub-pdf.com/10.1093/cesifo/ifz013","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48685298","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Using data from the German Socio-Economic Panel (SOEP), I examine the relation between workers’ reciprocal attitudes, as measured in 2005 and 2010, and participation in work-related training courses in 2007 and 2013, respectively. Theory predicts that employers find it more profitable to invest in human capital of workers who have positively reciprocal attitudes, because they are more likely to return their employer’s kindness with higher effort and/or loyalty. The findings are mixed, depending on the survey year. I find that positively reciprocal workers are more likely to participate in employer-financed training in 2007, in particular when training is general. Also consistent with theoretical expectations, I do not find a relation between workers’ reciprocal attitudes and participation in training that is not financed by the employer. However, workers’ reciprocal attitudes are not related to training participation in 2013. A possible explanation is that employers use training to induce reciprocal feelings in a slack labour market only.
{"title":"Training Participation and the Role of Reciprocal Attitudes","authors":"Arjan Non","doi":"10.1093/cesifo/ifz022","DOIUrl":"https://doi.org/10.1093/cesifo/ifz022","url":null,"abstract":"Using data from the German Socio-Economic Panel (SOEP), I examine the relation between workers’ reciprocal attitudes, as measured in 2005 and 2010, and participation in work-related training courses in 2007 and 2013, respectively. Theory predicts that employers find it more profitable to invest in human capital of workers who have positively reciprocal attitudes, because they are more likely to return their employer’s kindness with higher effort and/or loyalty. The findings are mixed, depending on the survey year. I find that positively reciprocal workers are more likely to participate in employer-financed training in 2007, in particular when training is general. Also consistent with theoretical expectations, I do not find a relation between workers’ reciprocal attitudes and participation in training that is not financed by the employer. However, workers’ reciprocal attitudes are not related to training participation in 2013. A possible explanation is that employers use training to induce reciprocal feelings in a slack labour market only.","PeriodicalId":51748,"journal":{"name":"Cesifo Economic Studies","volume":null,"pages":null},"PeriodicalIF":1.3,"publicationDate":"2020-01-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138504610","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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