Using a sample of 10 European countries and 17 industries covering the period 1981 to 1999, we test whether the EU's Single Market Programme had a significant procompetitive effect in terms of a reduction in firms' markups over marginal costs. In the framework of the markup estimation method suggested by Roeger (1995), we employ a panel approach for each of the sectors to test for both an instantaneous structural change between 1989 and 1993 as well as a continuous change in parameters using smooth transition analysis. The results do not indicate a pervasive pro-competitive effect of the Single Market. While markup reductions are found for aggregate manufacturing as of 1993, it is also suggested that markups increased in several sectors in the pre-completion period around the end of the 80s. This is likely to be due to strong increase in concentration and average firm size at the EU level in the second half of the 1980s. After all, the Single Market's net effect on markups is likely to be negligible if not positive. (author's abstract) / Series: EI Working Papers / Europainstitut

This paper presents a theoretical growth model that accounts for technological interdependence among regions in a Mankiw-Romer-Weil world. The reasoning behind the theoretical work is that technological ideas cannot be fully appropriated by investors and these ideas may diffuse and increase the productivity of other firms. We link the diffusion of ideas to spatial proximity and allow for ideas to flow to nearby regional economies. Through the magic of solving for the reduced form of the theoretical model and the magic of spatial autoregressive processes, the simple dependence on a small number of neighbouring regions leads to a reduced form theoretical model and an associated empirical model where changes in a single region can potentially impact all other regions. This implies that conventional regression interpretations of the parameter estimates would be wrong. The proper way to interpret the model has to rely on matrices of partial derivatives of the dependent variable with respect to changes in the Mankiw-Romer-Weil variables, using scalar summary measures for reporting the estimates of the marginal impacts from the model. The summary impact measure estimates indicate that technological interdependence among European regions works through physical rather than human capital externalities. (author's abstract) / Series: Working Papers in Regional Science

New relationships are often plagued with uncertainty because one of the players has some private information about her "type". The reputation literature has shown that equilibria that reveal this private information typically involve breach of trust and conflict. But are these inevitable for equilibrium learning? I analyze self-enforcing relationships where one party is privately informed about her time preferences. I show that there always exist honest reputation equilibria, which fully reveal information and support cooperation without breach or conflict. I compare these to dishonest reputation equilibria from several perspectives. My results are applicable to a broad class of repeated games.

Dieser Beitrag gibt einen selektiven Überblick zu theoretischen Konzeptionen von Wettbewerbs- und Strukturpolitik. Anschließend wird die Wettbewerbs- und Strukturpolitik Österreichs vor und seit dem EU-Beitritt anhand eines "Ziele-Mittel-Träger" Konzeptes dargestellt. Eine Fallstudie zum Mediensektor sowie die Einbettung in den internationalen Kontext ergänzen die Ausführungen. / Series: Working Papers Series "Growth and Employment in Europe: Sustainability and Competitiveness"

This paper empirically compares the contribution of the two major wealth accumulation factors - earned income and inheritances - to the net wealth position of households in the Eurozone. The elasticities of both wealth sources differ considerably across countries and are overly non-linear. Depending on the position in the wealth distribution, an increase of one percentile in the income distribution corresponds to 0.1-0.6 percentiles in the net wealth distribution. We find substantially stronger effects for inheritances vis-á-vis income. In Greece, Portugal, and Austria, households have to climb around three percentiles in the income distribution to compensate a one percentile increase in the inheritance distribution. The findings clearly suggest that bequests play a stronger role in wealth accumulation than earned income. / Series: INEQ Working Paper Series

Using the IIASA/VID dataset of populations by age, sex and level of education, I calculate education Gini coeffients and decompose the overall degree of educational inequality into age, sex and within-group components. I analyze the relative relevance of these components for inequality reduction and investigate the distributional outcomes of education expansion. I find that, on average, equalization between males and females, younger and older cohorts as well as within these subgroups of the population has significantly contributed to declining educational inequality over the observed sample period around the globe. But the relative role of these components fluctuates in the process of education expansion. First, as improvements are initiated by enhancing the educational opportunities of the youth, the gap between cohorts widens in transition phases but vanishes thereafter. Second, gaps between sexes have been reduced but are predicted to widen again if either males or females are the first to enter higher education levels. To a lesser extent, this is also true for gaps within population subgroups which can be due to the ethnic background or the social and economic status of people. / Series: INEQ Working Paper Series

This paper considers alternative methods to estimate econometric models based on bilateral data when only aggregate information on the dependent variable is available. Such methods can be used to obtain an indication of the sign and magnitude of bilateral model parameters and, more importantly, to decompose aggregate into bilateral data, which can then be used as proxy variables in further empirical analysis. We perform a Monte Carlo study and carry out a simple real world application using intra-EU trade and capital flows, showing that the methods considered work reasonably well and are worthwhile being considered in the absence of bilateral data. (authors' abstract)

We use a sample of 14 OECD countries and 15 manufacturing industries to test for the effect of trade on productivity. Endogeneity concerns are accounted for using the geographical component of trade as instrument as suggested by Frankel and Romer (1999). Our results are in line with previous studies: Trade increases productivity. What is puzzling, however, is the size of the effect: An increase in the export ratio by one percentage point increases productivity in manufacturing by 0.6 percent on average. This is less than half of the effect obtained in previous studies. We discuss likely explanations for this discrepancy. / Series: EI Working Papers / Europainstitut

Österreich trat 1995 der EU bei. Der anfänglichen EU-Euphorie folgte bald Skepsis und Ernüchterung. Nichtsdestotrotz hat Österreich von 20 Jahren EU-Mitgliedschaft enorm profitiert. Die positiven Integrationseffekte haben bis zum Ausbruch der globalen Finanz- und Wirtschaftskrise 2008/09 und der folgenden Euro -Krise angehalten. Österreich lukrierte dank des EU-Beitritts einen "EU-Bonus" von rund ½ bis 1% mehr Wirtschaftswachstum pro Jahr. Seit der stagnierenden Wirtschaftsentwicklung in Europa nach den diversen Krisen (Große Rezession 2009, Euro-Krise seit 2010, Unsicherheit en durch die Ukraine-Russland-Krise 2013/14) flachte der "EU-Wachstumsbonus" ab. Neue Wachstumsimpulse müssen jetzt von innen kommen. (author's abstract)

This paper empirically investigates the relationship between long-run economic growth and output volatility for the time series experience of 25 OECD countries between the years 1960 and 2013. Given the low number of observations, we reject, based on Monte Carlo simulations, the obvious choice of Garch estimation, and instead propose a pooled OLS estimator between a filtered GDP series that eliminates the cyclicality and the fluctuations around this trend. We find strong empirical evidence for a positive relationship between output variability and economic growth. This relationship seems to confirm theoretical literature which proposes such a positive relation.