The vision for a democratic, socially just and environmentally balanced Europe, the modern cradle of humanitarianism and peace, a vision that moved European people and spread the mood for European integration through the enlargement of the European Union (EU), fades away. The unfortunate coincidence of aggressive neoliberalism with neo-fascist socio-political retrogression, along with the gradual sharpening of the international systemic crisis in the sphere of the economy, requests a reorientation of the progressive vision for cooperation and prosperity.The historic acquis on socioeconomic cooperation and cultural linkages in Europe and the Black Sea could become the foundation for re-establishing the prospects of European Integration. The core-periphery approach has run its course, especially when the core is deteriorating. In the present paper, rather than arguing in favour of Eastern enlargement, i.e., a structure with visible signs of relapse and breakdown, we discuss the usage of a regionally developed, effec-tive and progressive Eastern partnership that may become the cornerstone for a European restart.
This article reviews the most important contributions to literature on public debt - economic growth relationship. Most relevant studies are empirical. Some of them are based on causality tests, albeit with no clear conclusion as to what the causes and what the effects are. We also indicate important gaps, which have not been considered and these are either periods of economic crises or secular stagnation phenomena. We suggest that policy makers and investors should reconsider not only the so-called 90% threshold hypothesis but also the causality itself, because there is no necessary theoretical consensus so far.
Corporate governance has become an important issue with the shaking of trust in companies, as a result of international financial crises, corruption and corporate scandals since the 1980s. Corporate governance is a broad concept and defines the methods, structure and processes of a firm. In this context, the concept of corporate governance plays an important role in ensuring the firm's progress in the right direction and in an optimal way. In this study, the effect of corporate governance practices on firm performance and capital cost is investigated empirically in 46 manufacturing companies listed on Borsa Istanbul between 2010-2019. In this context, the difference GMM proposed by Arellano-Bond (1991) and the dynamic GMM estimator developed by Arellano-Bover (1995) were used. As a result of the study, it has been determined that corporate governance mechanisms have an impact on the performance and capital cost indicators of firms resulting in a positive effect.
We estimated the effect of the GFC on remittances into 8 SSA countries from 1999 to 2019 using the Fixed Effects (FE) model. Results showed that the GFC had a positive and significant effect on remittances. Per capita income of migrant home country exerted a negative but insignificant effect on remittances, while per capita income in remittance source country had a positive and significant effect; the effects of exchange rate and inflation on remittances were positive and negative, respectively, but insignificant. Findings showed the effect of the GFC on remittances is robust to remittance measures and large country sample size.
The “Twin Deficits” hypothesis predicts that the current account responds to changes in the budget deficit, whether these are coming from changes in government spending or taxes. On the contrary, the “Fundamental Current Account Equation” of the intertemporal approach predicts that the current account responds only to (temporary) changes in government spending but not to taxes. Using annual data from 1870 to 2013 for a panel of seven OECD economies, the paper finds that (i) budget and current account deficits move together, which is necessary but not sufficient for the Twin Deficits hypothesis to hold; (ii) temporary increases in government spending deteriorate the current account balance, as predicted by the Fundamental Equation hypothesis; and (iii) changes in the budget deficit, other than temporary changes in government spending, also reduce the current account balance, suggesting that Twin Deficits are not an illusion. Quantitatively, an increase in temporary government spending by 1% of GDP deteriorates the current account by a maximum of 0.20% of GDP, whereas an increase in temporary taxes by 1% of GDP improves the current account by a maximum of 0.50% of GDP.
The main purpose of this paper is to study global economic growth against national capital accumulation and environmental change in conditions of free international trade. The paper addresses issues related to changes in inequalities of income, wealth and economic structures between countries. Another unique contribution is to include portfolio equilibrium along with physical wealth and other assets (such as gold and diamond) in the multi-country growth model. We develop a multi-country model of wealth and environment as endogenous variables, along with government intervention in environmental protection. Governments collect taxes from different sources of producers’ outputs and consumers’ income. We apply Zhang’s alternative concept of disposable income and utility function to model behaviour of households. We build the dynamics of J-country world economy, the behaviour of which is described by differential equations. We simulate the movement of the 3-country global economy and carry out comparative dynamic analysis with regard to certain parameters.
The rising uncertainties in the economy and the entwined global financial markets can easily cause nonlinear (asymmetric) behaviors among economic actors. Accordingly, this study re-considers the stability of the money multiplier from a different methodological perspective from that of prior studies, which assumed a linear relationship between money supply and monetary base. To this aim, the nonlinear ARDL model is applied for the US for the 2000M1-2018M9 period. Empirical findings of the nonlinear model indicate that only increases in positive monetary base shocks have a proportional relation with money supply. Additionally, the nonlinear ARDL detects proportional relationships between money supply and monetary base lower degree than the linear model.
Using data for 47 SSA countries from 2000 to 2016, the study examined the effect of foreign aid on human development in SSA by employing the System-GMM approach, which is specifically applicable to the present case. Results revealed that aid did not affect human development in SSA, whereas, corruption was found to reduce HDI, while trade openness improved it. Validity of results was confirmed by the Arellano-Bond test for autocorrelation in the disturbance term and the Hansen and Sargan tests for the validity of instrumental variables. The study recommended effective framework for utilization of foreign aid and reduction of corruption.
The main purpose of this paper is to test the efficiency of tertiary education ex-penditure in European Union Member States from Central and Eastern Europe, in comparative terms, through the application of an efficiency frontier approach (Data Envelopment Analysis). The results from the study conducted show that the most efficient country with respect to tertiary education expenditure is Romania, followed by the Czech Republic, Lithuania and Slovenia. Estonia and Bulgaria are classified as the most inefficient countries in terms of tertiary education expenditure, with the largest deviation from the efficiency frontier, even though investment in the field is relatively high.
This paper examines the role of corporate balance sheet positions in determining Slovenian firms' investment behaviour. The analysis is based on the theoretical framework of the financial accelerator which suggests that firms' financial positions influence their real behaviour. The underlying hypotheses of the financial accelerator are tested, namely its asymmetric effect during crises and in respect to firms' size. In addition, the existence of differences in the relationship between the balance sheet variables and investment across various sectors is examined. The results indicate that indeed balance sheet strength is an important determinant of Slovenian firms' investment behaviour. Moreover, this relationship is affected by a firm's size but the effect of the crisis or its sectoral specialization do not seem to materially affect it.
Over the last three decades, the financial industry in developed as well as in deve-loping countries has experienced major changes. One of these changes is revenue diversification on banking sector. The main purpose of our study is to examine the effects of income diversification on bank performance. Scope of Research is taken as the sample deposit banks operating in Turkey. Using the data of 14 banks between 2010 and 2017, variables were analyzed with dynamic panel data. Because of Herfindahl-Hirschman Index (will be addressed as HHI fore after) widely used to measure diversification, we used HHI for analyzing the revenue diversification. In the model, the return on assets (ROA) was taken as the dependent variable representing the bank performance, and the criterion of revenue diver-sification was HHI (Harfindal Hirsman Index) as the independent variable and other control variables were added. The panel GMM tecnique was used because of its some features. According to the results; there is a negative significiant relationship between HHI Index and bank performance. It means that revenue diversification has a positive effect on bank performance. Results of control vari-ables are also largely consistent with expectations.
The aim of this paper is to identify and highlight those conditions and characteristics that will facilitate the internationalization of Greek Social Enterprises (GSEs) and, thereby, enhance their sustainability and performance characteristics. In Greece, social enterprises have a very low degree of internationalization. Assessed on their fundamental characteristics (turnover, employment, size), they fail to respond to criteria of extrovert Social Enterprises. We also highlight policy measures that may support and encourage social enterprises to internationalize. Through internationalization, positive effects on the viability and further development of GSEs will emerge,specifically related to strengthening their competitive position in the domestic and international markets, by raising capacity innovation, increasing sales, creating new jobs and acquiring a healthier financial position.
Motivated by recent debates on the possible role of wages as an income policy tool, in this study we examine the dynamic inter-relationship between wages in Bulgaria, mainly in the context of its EU accession. Relative to the WDN studies on the other EU member states, the novelty in this paper is the inclusion of the minimum wage as a possible conditional determinant of the other two wages. We demonstrate that minimum wage increases do not cause changes in average wages in either the government or the private sector. Using variety of econometric tests, we also demonstrate the leadership of private sector wage over public compensation and recommend the implementation of policy measures aimed at labor productivity growth.
The present paper examines the dynamic relation between flexible work arrange-ments and effective employment policies. Regulations that form the integration framework of flexible forms of employment are analyzed thoroughly, based on the country's social model and labor legislation. Active employment policies are studied as a tool of increasing flexibility in labor markets especially during the recent times of global recession. The research part of the paper investigates two certain experimental projects that involve flexible work arrangements in Cyprus. Both projects implement certain employment policies that promote local flexible employment. Through applying ex-post evaluation methodologies, a detailed set of qualitative and quantitative data is thoroughly elaborated, resulting in a vast number of innovative parameters that could be used in promoting flexible, decent, healthy and productive work, in order to achieve an inclusive sustainable economic growth, according to International Labor Organization's (ILO) engagement.
This paper shows results of a study on entrepreneurial intentions in Greece in times of a major and prolonged economic crisis, with a focus on the dimension of gender. The paper provides insights about drivers and barriers that affect intentions of becoming an entrepreneur. Results show relatively low intention of starting a business, whereas personal attitudes toward becoming an entrepreneur and perceived desirability are high. Furthermore, economic barriers, public policy barriers and business risk barriers towards undertaking entrepreneurial activities are considered to be highly important as compared to personal barriers. As far as gender is concerned, results show that, generally speaking, male and female potential entrepreneurs are quite similar in their motivation towards entrepreneurship during turbulent times.
The aim of the paper is to analyse business cycle synchronisation patterns that the countries of the CESEE region have in relation to the original 12 Euro area member states. We focus on the turbulent times entailed in the latest economic crisis in order to examine whether the synchronisation patterns for the group of countries that have already established closer links to the EU differ from those in the countries pursuing the same path. Our analysis rests on the three wellestablished channels of business cycle synchronisation: trade, financial integration and sectoral specialisation. Given that the latest economic crisis was caused and transmitted by financial markets, we focus more on financial integration indicators. The results suggest that the synchronisation patterns differ between the two groups of countries and that the financial integration channel is important for the CEE countries, while synchronisation for the SEE countries is supported by the trade channel.
The cyclical influence on inequality is investigated using the model formulated from the theory of unequal labour exchange, based on disequilibrium prices, capital-labour ratios, efficiencies, disequilibrium factor incomes, and exploitation. Empirical employment of the abovementioned categories allowed for clustering Eurozone countries according to corresponding trends. Findings indicated countrylevel differentiability regarding the utilisation of cyclical advantages. Since the countries did not share a cycle tendentially, a consequential asymmetrical benefit distribution caused divergence and cross-country inequality. The implications of these conclusions are acute for Eurozone sustainability, which must revise its flawed economic foundations with built-in destabilisers that divide its members and oppose the goals of effective single market integration.
In the last decade, the financial situation of pension funds in Tunisia has worsened because of demographic and economic factors. These changes will make solidarity between generations more difficult and will prompt the government to institute some reforms regulating basic pension. This scenario of probable changes involves voluntary contributions to retirement saving schemes offered by financial institutions in order to supplement future pensions of workers. The aim of this paper is to understand Tunisian working population’s savings behaviour, referring, for this purpose, to microeconomic factors, while assessing the current status of life insurance and funded pension schemes in Tunisia. To this end, a survey1 was carried out on a representative population of Tunisian individuals affiliated to the three main public pension schemes and approached through savings theories and the Life Cycle Model (Modigliani 1954), in particular.
