Human capital in a global and knowledge-based economy. Part 2. Asssessment at the EU country level.

This report is an extension and partial update of de la Fuente and Ciccone (2002). It constructs estimates of the private and social rates of return on schooling for fourteen EU countries using microeconometric estimates of Mincerian wage equations, the results of cross-country growth regressions and OECD data on educational expenditures, tax rates and social benefits. The results are used to draw some tentative conclusions regarding the optimality of observed investment patterns and educational subsidy levels.

On the choice of an exchange rate regime: target zones revisited

From the classical gold standard up to the current ERM2 arrangement of the European Union, target zones have been a widely used exchange regime in contemporary history. This paper presents a benchmark model that rationalizes the choice of target zones over the rest of regimes: the fixed rate, the free float and the managed float. It is shown that the monetary authority may gain efficiency by reducing volatility of both the exchange rate and the interest rate at the same time. Furthermore, the model is consistent with some known stylized facts in the empirical literature that previous models were not able to produce, namely, the positive relation between the exchange rate and the interest rate differential, the degree of non-linearity of the function linking the exchage rate to fundamentals and the shape of the exchange rate stochastic distribution.

The Proposals for a European tax on CO2 and their implications for intercountry distribution

This paper analyzes the advantages and implications of the implementation of a European tax on carbon dioxide emissions as an own resource of the European Union. In contrast to a harmonized tax, which would only have distributive effects within each member state, a tax collected at European scale would also have important distributive effects among different countries. These effects would also depend on the use of tax revenues. The paper investigates the distributive effects among the member states of three tax models: a pure CO2

Las Propuestas para un impuesto europeo sobre el CO2 y sus potenciales distributivas entre países

En el presente artículo se revisan las propuestas sobre fiscalidad energética y, en concreto, sobre un impuesto europeo que grave las emisiones de dióxido de carbono y las dificultades con que se han encontrado. Se estudian las posibles implicaciones que tendría un impuesto, no ya armonizado, sino recaudado a nivel del conjunto de la Unión Europea. Este tipo de impuesto tendría importantes efectos distributivos no solo a nivel de un país (como un impuesto armonizado) sino también entre diferentes países. El trabajo estudia dichos efectos potenciales según diferentes modelos concretos de implantación (un modelo puro sobre el CO2; un modelo 50%/50% energía-CO2; un modelo puro sobre el CO2 pero gravando también la energía nuclear) y de destino de los fondos recaudados.

L’Europe des partis: paradoxes, contradictions et antinomies

L’autor constata la presència de clivelles europeus conseqüència d’apostes que només la Unió Europea pot tractar ja que s’escapen de l’acció dels governs europeus. De les dos clivelles descobertes per Hix i Lord en el Parlament europeu, la que oposa els partidaris de la "Europa liberal" amb els de l’"Europa social" és avui determinant per dues raons, doctrinal la primera i empírica la segona, que l’autor desenvolupa en aquest treball.

Cooperative vs. non-cooperative mechanisms in the EU decision making process

According to the account of the European Union (EU) decision making proposed in this paper, this is a bargaining process during which actors shift their policy positions with a view to reaching agreements on controversial issues.

An instrumental analysis of the European Union's capability to act in conflict response

Descripció i anàlisi dels instruments polítics, econòmics, civils i militars de la Unió Europea per enfrontar qualsevol conflicte.

The Private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU

This paper develops a comprehensive framework for the quantitative analysis of the private and fiscal returns to schooling and of the effect of public policies on private incentives to invest in education. This framework is applied to 14 member states of the European Union. For each of these countries, we construct estimates of the private return to an additional year of schooling for an individual of average attainment, taking into account the effects of education on wages and employment probabilities after allowing for academic failure rates, the direct and opportunity costs of schooling, and the impact of personal taxes, social security contributions and unemployment and pension benefits on net incomes. We also construct a set of effective tax and subsidy rates that measure the effects of different public policies on the private returns to education, and measures of the fiscal returns to schooling that capture the long-term effects of a marginal increase in attainment on public finances under conditions that approximate general equilibrium.

Agglomeration and inequality across space: what can we learn from the European experience?

The purpose of this contribution is to draw a picture of the (uneven) distribution of economic activities across the states of the European Union (EU) and the consequences entailed by it. We will briefly summarize the most salient and recent contributions. Then, in the light of the economic geography theory, we will discuss the economic and social advantages and disadvantages associated with a core- periphery structure. In this sense, particular attention will be addressed to the EU financial system of Structural Funds and the effects they produced. Finally, we will formulate some suggestions, relying on the EU experience, that could be of interest to the current Brazilian regional policy.

The Monetary policy rules in EU-15: before and after the euro

The objective of this paper is to identify empirically the logic behind short-term interest rates setting

The Monetary policy rules in Europe: heterogeneity and common patters

The objective of this study is the empirical identification of the monetary policy rules pursued in individual countries of EU before and after the launch of European Monetary Union. In particular, we have employed an estimation of the augmented version of the Taylor rule (TR) for 25 countries of the EU in two periods (1992-1998, 1999-2006). While uniequational estimation methods have been used to identify the policy rules of individual central banks, for the rule of the European Central Bank has been employed a dynamic panel setting. We have found that most central banks really followed some interest rate rule but its form was usually different from the original TR (proposing that domestic interest rate responds only to domestic inflation rate and output gap). Crucial features of policy rules in many countries have been the presence of interest rate smoothing as well as response to foreign interest rate. Any response to domestic macroeconomic variables have been missing in the rules of countries with inflexible exchange rate regimes and the rules consisted in mimicking of the foreign interest rates. While we have found response to long-term interest rates and exchange rate in rules of some countries, the importance of monetary growth and asset prices has been generally negligible. The Taylor principle (the response of interest rates to domestic inflation rate must be more than unity as a necessary condition for achieving the price stability) has been confirmed only in large economies and economies troubled with unsustainable inflation rates. Finally, the deviation of the actual interest rate from the rule-implied target rate can be interpreted as policy shocks (these deviation often coincided with actual turbulent periods).

The Monetary policy rules and the inflation process in open emerging

This paper has three objectives. First, it aims at revealing the logic of interest rate setting pursued by monetary authorities of 12 new EU members. Using estimation of an augmented Taylor rule, we find that this setting was not always consistent with the official monetary policy. Second, we seek to shed light on the inflation process of these countries. To this end, we carry out an estimation of an open economy Philips curve (PC). Our main finding is that inflation rates were not only driven by backward persistency but also held a forward-looking component. Finally, we assess the viability of existing monetary arrangements for price stability. The analysis of the conditional inflation variance obtained from GARCH estimation of PC is used for this purpose. We conclude that inflation targeting is preferable to an exchange rate peg because it allowed decreasing the inflation rate and anchored its volatility.

Still in the Era of Area Studies? Political-Scientific Perspectives on European Competition Policy in the 2000s

This note reviews the political-scientific literature on European competition policy (ECP) in the 2000s. Based on a data set extracted from four well-known journals, and using an upfront methodology and explicit criteria, it analyzes the literature both quantitatively and qualitatively. On the quantitative side, it shows that, although a few sub-policy areas are still neglected, ECP is not the under-researched policy it used to be. On the qualitative side, the literature has greatly improved since the 1990s: Almost all articles now present a clear research question, and most advance specific theoretical claims/hypotheses. Yet, improvements can be made on research design, statistical testing, and, above all, state-of-the-art theorizing (e.g. in the game-theoretical treatment of delegation problems). Indeed, it is paradoxical that ECP specialists do not pay more attention to theoretical questions which are so central to the actual policy area they study.

Selection bias and unobservable heterogeneity applied at the wage equation of European married women

This paper utilizes a panel data sample selection model to correct the selection in the analysis of longitudinal labor market data for married women in European countries. We estimate the female wage equation in a framework of unbalanced panel data models with sample selection. The wage equations of females have several potential sources of.

Analyzing aggregate real exchange rate persistence through the lens of sectoral data

In this paper we analyze the persistence of aggregate real exchange rates (RERs) for a group of EU-15 countries by using sectoral data. The tight relation between aggregate and sectoral persistence recently investigated by Mayoral (2008) allows us to decompose aggregate RER persistence into the persistence of its different subcomponents. We show that the distribution of sectoral persistence is highly heterogeneous and very skewed to the right, and that a limited number of sectors are responsible for the high levels of persistence observed at the aggregate level. We use quantile regression to investigate whether the traditional theories proposed to account for the slow reversion to parity (lack of arbitrage due to nontradibilities or imperfect competition and price stickiness) are able to explain the behavior of the upper quantiles of sectoral persistence. We conclude that pricing to market in the intermediate goods sector together with price stickiness have more explanatory power than variables related to the tradability of the goods or their inputs.