Does All Fit One Size? An evaluation of the ECB policy response to changing economic conditions in the Euro area member states. ACES Cases No. 2008.1

This paper empirically investigates the extent to which the European Central Bank has responded to evolving economic conditions in its member states as opposed to the euro area as a whole. Based on a forward-looking Taylor rule-type policy reaction function, we conduct counterfactual exercises that compare the monetary policy behavior of the ECB with two alternative hypothetical scenarios: (1) were the euro member states to make individual policy decisions, and (2) were the ECB to respond to the economic conditions of individual members. The results reflect the extent of heterogeneity among the national economies in the monetary union and indicate that the ECB's monetary policy rates have been particularly close to the "counterfactual" interest rates of its largest euro members, as well as of countries with similar economic conditions, which includes Germany, Austria, Belgium and France.

Continuous Off-the-Job Training in East Germany After Unification: Preliminary Results of an Evaluation of the Effects for Individual Workers, CES Germany & Europe Working Papers, No. 05.9, 19 July, 1995

Retraining the labor force to match the demands of a modem economy is seen as an important task during the transition process from a centrally-planned to a market economy. This need was particularly pressing in East Germany, because the transition process has proceeded much faster than in the rest of Eastern Europe. Therefore, substantial resources have been devoted to this purpose. This paper analyzes the impact of continuous off-the-job training in East Germany from the point of view of individuals who were part of the labor force before German unification in 1990. It tries to answer questions about the average gains from participating in a specific type of training. Typical outcomes considered to measure those gains are income, employment status, job security, and expected future changes in job position. The methodology used for the evaluation is the potential outcome approach to causality. This approach has received considerable attention in the statistical literature over the last fifteen years and it has recently been rediscovered by the econometric literature as well. It is adapted to allow for important permanent and transitory shocks, such as unemployment, which influence the decision to participate in the training as well as future labor market outcomes. The empirical part is based on the first four waves of the Socio-Economic Panel (GSOEP)-East (1990-1993). This panel data set has the advantage that the fourth wave contains a special survey on continuous training and that it allows keeping track of individual behavior on a monthly, respectively yearly, basis. The econometric analysis focuses on off-the-job training courses that began after unification and were completed not later than in early 1993. Although it is obviously too early to evaluate the long-term implications, the results suggest that there are no positive effects in the short run.