Aim of dnb Occasional Studies is to dissiminate thinking on policy and analytical issues in areas relevant to the Bank. Views expressed are those of the individual authors and do not necessarily reflect official positions of De... more
Aim of dnb Occasional Studies is to dissiminate thinking on policy and analytical issues in areas relevant to the Bank. Views expressed are those of the individual authors and do not necessarily reflect official positions of De Nederlandsche Bank. Editorial Committee
wage contracts, adjustment costs and real persistence of monetary shocks
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In this paper we investigate Dutch corporate liquidity management in general, and target adjustment behaviour in particular. To this purpose, we use a simple error correction model of corporate liquidity holdings applied to firm-level... more
In this paper we investigate Dutch corporate liquidity management in general, and target adjustment behaviour in particular. To this purpose, we use a simple error correction model of corporate liquidity holdings applied to firm-level data for the period 1977-1997. We confirm the existence of long-run liquidity targets at the firm level. We also find that changes in liquidity holdings are driven by short-run shocks as well as the urge to converge towards targeted liquidity levels. The rate of target convergence is higher when we include more firm-specific information in the target. This result supports the idea that the degree of error in defining liquidity targets associates negatively with the observed rate of target convergence. It also suggests that the slow speeds of adjustment obtained in many macro studies on money demand are artefacts of aggregation bias. JEL Classification: C33; C43; E41; G3
This paper investigates the fiscal pressure, or the level of public expenditure on old and young economically inactive people, arising from demographic change in relation to the labour market space, or the proportion of the working age... more
This paper investigates the fiscal pressure, or the level of public expenditure on old and young economically inactive people, arising from demographic change in relation to the labour market space, or the proportion of the working age population not in full-time employment. The exercise is carried out for 50 countries that cover 75% of the world population. The pressure-to-space indicator ranks Poland, Turkey and Greece high, although, apart from Turkey and India, developing countries generally rank low due to low spending on the old (pensions, healthcare) and on the young (education, family costs). Peculiarly, economies with higher pressure have more space. The hypothesis that ageing economies have started using their labour market space in anticipation of higher demographic pressure is rejected. It is important to note that raising the retirement age in developed economies by five years alleviates fiscal pressure by almost 30% and creates 10% more labour market space.
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Wage coordination between countries of the European Monetary Union (EMU) aims at aligning nominal wage growth with labour productivity growth at the national level. We analyse the developments in Germany, the EMU’s periphery countries... more
Wage coordination between countries of the European Monetary Union (EMU) aims at aligning nominal wage growth with labour productivity growth at the national level. We analyse the developments in Germany, the EMU’s periphery countries Greece, Ireland, Portugal, and Spain along with the US over the period 1980-2010. Apart from the contribution of productivity to nominal wages, we take into account the contributions of prices, unemployment, replacement rates and taxes by means of an econometrically estimated non-linear equation resulting from a wage bargaining model. We further study the downward rigidities of nominal wages. The findings show that in past times of low productivity, price inflation and reductions in unemployment still put significant upward pressure on nominal wage growth. The periphery countries are far from aligning nominal wage growth with productivity growth. German productivity is a major wage determinant, but surely not the only one. Within the context of a free ...
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De kans bestaat dat Nederland gaat meebetalen aan het vergrijzingsprobleem van de overige eurolanden. De huidige eurocrisis laat zien dat landen met excessieve begrotingstekorten en staatsschulden andere eurolanden mede-eigenaar maken van... more
De kans bestaat dat Nederland gaat meebetalen aan het vergrijzingsprobleem van de overige eurolanden. De huidige eurocrisis laat zien dat landen met excessieve begrotingstekorten en staatsschulden andere eurolanden mede-eigenaar maken van hun probleem. De vergrijzing legt extra druk op de toch al slechte situatie van de overheidsfinanciën in veel Europese landen.
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Eurocommissarissen moeten veel grotere bevoegdheden krijgen om in te grijpen in het economisch beleid van lidstaten. Verdere Europese integratie is nodig om een herhaling van de economische crisis zoals we die nu meemaken te voorkomen.... more
Eurocommissarissen moeten veel grotere bevoegdheden krijgen om in te grijpen in het economisch beleid van lidstaten. Verdere Europese integratie is nodig om een herhaling van de economische crisis zoals we die nu meemaken te voorkomen. Mede op voorstel van Nederland is een eerste stap gezet door eurocommissaris Olli Rehn de bevoegdheid te geven in te grijpen in het begrotingsbeleid van landen. Soortgelijke bevoegdheden zijn nodig om stijging van de mbtenarensalarissen en uitkeringen in toom te houden, de omvang van de publieke sector te beperken en de vergrijzingsproblematiek daadwerkelijk aan te pakken.
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After the drama of Egypt’s revolution comes the economic reality – one of the catalysts for regime change was the country’s high unemployment. This column shows that the growing number of young people entering the job market will only add... more
After the drama of Egypt’s revolution comes the economic reality – one of the catalysts for regime change was the country’s high unemployment. This column shows that the growing number of young people entering the job market will only add to the pressure. It argues that job creation in the private sector should be the number one priority for stimulating Egypt’s economic growth.
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Research Interests: Economics, International Trade, Time Series, Emerging Economies, Mediterranean Studies, and 15 moreEuropean Union, Mediterranean, International Finance, Global Financial Crisis, Volatility, Business and Management, Vector Autoregression, Integration, Monetary Policy and Exchange Rate, Trade Integration, Exchange rate, Econometric Modeling, Econometric Model, Trade flows, and Exchange rate volatility
Research Interests: Finance, Financial Economics, Banking, Mediterranean Studies, Foreign Direct Investment, and 11 moreInternational Finance, Financial Crises and International Financial Integration, Financial Derivatives, Remittances, Social Science Research Network, Exchange rate, Financial Stability, STOCK EXCHANGE, Asset and investment valuation, Stock Exchanges, and Financial Integration
Parliamentary election outcomes have recently shifted significantly in some small open economies with high living standards. As regional differences widened, this study goes down to the regional level and investigates whether or not... more
Parliamentary election outcomes have recently shifted significantly in some small open economies with high living standards. As regional differences widened, this study goes down to the regional level and investigates whether or not regional factors have been driving the election outcomes. An econometric model is designed explaining the election outcomes of the left-wing, middle and right-wing parties per municipality by latent variables at the country and regional levels. A panel of ten Parliamentary election outcomes of municipalities in the Netherlands during the period 1981-2010 is used to calculate the sizes of the national and regional factors' impact in three steps. First, principal component analyses are applied to measure the latent variables. Second, the econometric model is estimated by Seemingly Unrelated Regressions. Third, the responses of the election outcomes per party in reaction to country and regional shocks are simulated. The results indicate that regional fa...
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Working paper, focusing on the impact of soaring commodity prices, notably for food and energy on the economy and public finances of Mediterranean neighbour countries of the EU. Just before the global crisis soaring commodity prices... more
Working paper, focusing on the impact of soaring commodity prices, notably for food and energy on the economy and public finances of Mediterranean neighbour countries of the EU. Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region, notably via government subsidies. Partly due to lags in the transmission of commodity prices into prices for final users the subsidies burden continued to be felt, despite the price falls registered in the wake of the credit crisis. We show that downward price rigidities play a role. Recently, commodity price pressures have re-emerged. We focus on food prices and analyse recent developments in food inflation in Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories, Syria and Tunisia in comparison with other middle income economies. Subsidies on food ...
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During the past decade the Gulf cooperation council countries have achieved a remarkably high degree of trade and financial integration in the world economy. Before the global crisis began, they invested their abundant oil income which... more
During the past decade the Gulf cooperation council countries have achieved a remarkably high degree of trade and financial integration in the world economy. Before the global crisis began, they invested their abundant oil income which resulted from high energy prices and high world demand, in return abundantly abroad. Thanks to policies that are geared towards opening up borders, the Gulf cooperation council countries have imparted a significant stimulus to the world economy, to a much greater extent than other oil exporting countries in similar conditions. The development of the gross capital flows in view of the recent global crisis and their composition are the main focus of this study. It aims at providing a comprehensive overview of the pattern of the current and capital account of the balance of payments of the group of six Gulf cooperation council countries, and benchmarks this group with the other OPEC countries that have a comparable size of natural resources. Aspects of g...
Research Interests: Business, Geography, Economics, International Trade, Foreign Direct Investment, and 13 moreCapital Flows, Gulf Cooperation Council, European Commission, Oil, Dutch Disease, Global Economy, Natural Resource, Balance of Payment, Bank Loans, Financial Integration, Balance of Payments, High energy, and Economic Papers
0 Overview.- 0.1 Introduction.- 0.2 Main research aims.- 0.3 Outline.- 1 Physical Capital Stock Investments and Labour Demand, Theoretical background on dynamic modelling.- 1.1 Introduction.- 1.2 Entrepreneurial behaviour.- 1.3... more
0 Overview.- 0.1 Introduction.- 0.2 Main research aims.- 0.3 Outline.- 1 Physical Capital Stock Investments and Labour Demand, Theoretical background on dynamic modelling.- 1.1 Introduction.- 1.2 Entrepreneurial behaviour.- 1.3 Entrepreneurial behaviour under neoclassical assumptions.- 1.3.1 Model 1: Static labour demand.- 1.3.2 Model 2: Dynamic labour demand.- 1.3.3 Model 3: Dynamic physical capital stock and investments demand.- 1.3.4 Model 4: Interrelation in physical capital stock and labour demand.- 1.4 Dynamics and the literature.- 1.4.1 Dynamics in the neoclassical framework.- 1.4.2 q theory of investments.- 1.4.3 Gestation lags.- 1.5 Short summary and extensions.- 1.A Dynamics and interrelation in structures, equipment and labour in six OECD countries.- 2 Investment Gestation Lags, Construction lags, delivery lags and capital stock accumulation.- 2.1 Introduction.- 2.2 Construction lags.- 2.2.1 The construction process.- 2.2.2 The length of the construction period.- 2.2.3 Ca...
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Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region, notably... more
Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region, notably via government subsidies. Partly due to lags in the transmission of commodity prices into prices for final users the subsidies burden continued to be felt, despite the price falls registered in the wake of the credit crisis. We show that downward price rigidities play a role. Recently, commodity price pressures have reemerged. We focus on food prices and analyse recent developments in food inflation in Algeria, Egypt, Israel, Jordan, Lebanon, Morocco, the occupied Palestinian territories, Syria and Tunisia in comparison with other middle income economies. Subsidies on food and fuel are quantified per country for the period 2002-2010. The incremental government subsidies entail an estimated deterioration of the government balances of up to more than ...
Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in... more
Variations between the diverse pension systems in the member states of the European Union hamper labour market mobility, across country borders but also within the countries of the European Union. From a macroeconomic perspective, and in the light of demographic pressure, this paper argues that allowing individual instead of collective pension building would greatly improve labour market flexibility and thus enhance the functioning of the monetary union. I argue that working citizens would benefit, for three reasons, from pension saving in a risk-free savings account. First, citizens would have a clear picture of the accumulation of their own pension savings throughout their working life. Second, they would pay hardly any extra costs and, third, once retired they would not be subject to the whims of government or other pension fund managers. This paper investigates the feasibility of individual pension building under various parameter settings by calculating the pension saved during...
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The demographic structure of Egypt has the form of a pyramid, indicating that labour supply will grow at a relatively high rate for many years to come. Unless emigration flows will rise, Egypt needs to create jobs at a much higher pace... more
The demographic structure of Egypt has the form of a pyramid, indicating that labour supply will grow at a relatively high rate for many years to come. Unless emigration flows will rise, Egypt needs to create jobs at a much higher pace than most other countries around the globe to absorb the new entrants at the domestic labour market. Adding to this is the currently high share of 30-40% of the Egyptian employees working in the rather inefficient public sector. In order to quantify future developments at the labour market, this paper presents a labour supply model to analyze the impact of the ongoing demographic supply shocks on unemployment, public finances and welfare in Egypt. The findings indicate that the demographic labour supply will increase unemployment in the short term as the Egyptian labour market will not be able to absorb the demographic labour supply, unless the Egyptian economy grows steadily at least at 5% for many years in a row. In the long term, the employment div...
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This paper presents a reflection on and assessment of the practice of forecasting at the Bank. The focus is on macroeconomics, and the currency circulation both domestic and Euro area wide. JEL codes: C5, E3, M2
Eurocommissarissen moeten veel grotere bevoegdheden krijgen om in te grijpen in het economisch beleid van lidstaten, stelt Marga Peeters. Verdere Europese integratie is nodig om een herhaling van de economische crisis zoals we die nu... more
Eurocommissarissen moeten veel grotere bevoegdheden krijgen om in te grijpen in het economisch beleid van lidstaten, stelt Marga Peeters. Verdere Europese integratie is nodig om een herhaling van de economische crisis zoals we die nu meemaken te voorkomen. Mede op voorstel van Nederland is een eerste stap gezet door eurocommissaris Olli Rehn de bevoegdheid te geven in te grijpen in het begrotingsbeleid van landen. Soortgelijke bevoegdheden zijn nodig om stijging van de ambtenarensalarissen en uitkeringen in toom te houden, de omvang van de publieke sector te beperken en de vergrijzingsproblematiek daadwerkelijk aan te pakken.
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Working paper, focusing on the impact of soaring commodity prices, notably for food and energy on the economy and public finances of Mediterranean neighbour countries of the EU. Just before the global crisis soaring commodity prices... more
Working paper, focusing on the impact of soaring commodity prices, notably for food and energy on the economy and public finances of Mediterranean neighbour countries of the EU. Just before the global crisis soaring commodity prices pushed up inflation significantly, not least in EU neighbour countries at the Mediterranean. These price shocks affected public finances in the southern Mediterranean region,
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Lucas'(1967) adjustment costs model and Kydland and Prescott's (1982) time-to-build model induce mutually exclusive time-series properties that can be recovered from data. This paper investigates three variants... more
Lucas'(1967) adjustment costs model and Kydland and Prescott's (1982) time-to-build model induce mutually exclusive time-series properties that can be recovered from data. This paper investigates three variants of a theoretical model which give insight into the parameter ...
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Abstract Although the global financial and economic crisis hurt economies worldwide, the economies at the southern Mediterranean region have done relatively well to weather this global hurricane. Economic growth in the region has slowed... more
Abstract Although the global financial and economic crisis hurt economies worldwide, the economies at the southern Mediterranean region have done relatively well to weather this global hurricane. Economic growth in the region has slowed down but the size of the ...
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Page 1. ON WAGE FORMATION, WAGE FLEXIBILITY AND WAGE COORDINATION A focus on the nominal wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States Marga Peeters and Ard den Reijer1 ...
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Page 1. Electronic copy available at: http://ssrn.com/abstract=1875973 ON WAGE FORMATION, WAGE FLEXIBILITY AND WAGE COORDINATION A focus on the wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States... more
Page 1. Electronic copy available at: http://ssrn.com/abstract=1875973 ON WAGE FORMATION, WAGE FLEXIBILITY AND WAGE COORDINATION A focus on the wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States ...
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Page 1. DOES DEMAND AND PRICE UNCERTAINTY AFFECT BELGIAN AND SPANISH CORPORATE INVESTMENT? Marga Peeters (*) (* Econometric Research and Special Studies Department. De Nederlandsche Bank NV. ...
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Dans cet article, les valeurs limites de rentabilité, pour des projets d'investissement qui sont affectés et par les périodes de construction et par l'incertitude, sont dérivées.... more
Dans cet article, les valeurs limites de rentabilité, pour des projets d'investissement qui sont affectés et par les périodes de construction et par l'incertitude, sont dérivées. L'importance des ces deux aspects sur la décision d'investir est démontré par des résultats de ...
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This Discussion Paper defines the Communication Strategy for Inflation Targeting of the Central Bank of Albania as the objective of increasing and reaching the (full) awareness of the public on monetary policy issues, in general, and... more
This Discussion Paper defines the Communication Strategy for Inflation Targeting of the Central Bank of Albania as the objective of increasing and reaching the (full) awareness of the public on monetary policy issues, in general, and Inflation Targeting, in particular. The Paper distinguishes between the period before and after the official launch of this monetary policy framework in discussing the tactics of this strategy. A gradual launch of IT is proposed and an intensive dialogue of the central bank with the different target groups in the society on promoting price stability as a necessary condition for a sustainable economic growth. The Paper further proposes the monitoring of the public’s perception for steering its policy better. It unfolds furthermore the BoA’s plans for the next two years.