Focus on European Economic Integration Q2/06

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• Focus on European Economic Integration 2/06 (PDF, 1.8 MB) June 2006.

Studies and Analyses

• Recent Economic Developments (PDF, 457 kB) Focus on European Economic Integration 2/2006 en Jun 30, 2006, 12:00:00 AM

• Bank Intermediation in Southeastern Europe: Depth and Structure (PDF, 265 kB) Backé. Backé, Walko – Focus on European Economic Integration 2/2006 This short study examines similarities and differences in the depth and structure of bank intermediation in Southeastern European (SEE) countries. In the process, we also analyze to what extent the patterns of bank intermediation in SEE countries are already similar to those observed in the new EU Member States of Central and Eastern Europe. Overall, it turns out that the depth, structure and quality of bank intermediation has advanced considerably in all SEE countries. At the same time, the development in the individual SEE countries is far from uniform. In some countries, bank intermediation is already similar to, or approaching the levels observed in, the new Member States, while in others, it is at an earlier stage, notwithstanding major progress in recent years. en Jun 30, 2006, 12:00:00 AM

• How Central and Eastern European Countries Choose Exchange Rate Regimes (PDF, 244 kB) Markiewicz. Markiewicz – Focus on European Economic Integration 2/2006 In this study, we identify the main determinants of the exchange rate regime choices in Central and Eastern European countries (CEECs). For this purpose, we use an ordered logit model for the official (de jure) and the actual (de facto) exchange rate classifications. We find that trade openness and concentration, inflation differentials, international reserves stocks and financial conditions are the main determinants of the selection of exchange rate regimes in the CEECs. en Jun 30, 2006, 12:00:00 AM

• The Dutch Disease in Kazakhstan: An Empirical Investigation (PDF, 369 kB) Égert, Leonard. Égert, Leonard – Focus on European Economic Integration 2/2006 In this paper we investigate whether or not the Dutch disease is at work in, or poses a threat to, the Kazakh economy. For this purpose, we first summarize the mechanism through which fluctuations in the price of oil could possibly damage the non-oil manufacturing industry and thus the long-term growth perspectives of an economy that relies heavily on oil production. Subsequently, we seek to analyze the specific chains of this transmission mechanism in Kazakhstan. The analysis of annual data for the period from 1998 to 2005 suggests that non-oil manufacturing has so far been spared the perverse effects of oil price increases. However, the real exchange rate of the open sector has appreciated during the last couple of years chiefly due to the appreciation of the nominal exchange rate. In a second step, we analyze to what extent this appreciation is linked to oil price developments and oil revenues. Our econometric estimations based on the monetary model of the exchange rate and a variety of real exchange rate models provide us with some indication that the rise in the price of oil and in oil revenues might be linked to an appreciation of the U.S. dollar exchange rate of the oil and non-oil sectors. However, the appreciation is mainly limited to the oil sector for the real effective exchange rate and seems to be statistically insignificant for the non-oil manufacturing sector. en Jun 30, 2006, 12:00:00 AM

• Serbia: Country Profile and Recent Economic Developments (PDF, 271 kB) Michal, Slacík. Michal,Slacík – Focus on European Economic Integration 2/2006 This study provides an overview of economic developments in the Republic of Serbia since the end of the Miloševic regime in the fall of 2000. Starting from a short review of the political context, the study reports on Serbia’s relations with the EU and the IMF as well as the Paris and the London Clubs. Subsequently, the most important structural reform measures are presented. The article then turns to macroeconomic developments, focusing on GDP growth, the labor market, inflation, monetary policy, fiscal policy and the external sector. Based on this discussion, the paper concludes that after a lost decade Serbia has embarked on a fairly dynamic transition path and has achieved substantial progress in recent years. At the same time, however, the Serbian authorities are still facing a set of key challenges at the current juncture, such as high inflation and unemployment or the high current account deficit. Other major tasks include further advancing the privatization process and combating corruption. On the political front, further progress in the cooperation with the International Criminal Tribunal for the Former Yugoslavia (ICTY) in The Hague is needed, also with a view to promoting negotiations with the EU on a Stabilisation and Association Agreement. Given that Serbia’s economic weight is comparatively large in the Western Balkans, a successful completion of the transformation process in Serbia is important also from a regional perspective. en Jun 30, 2006, 12:00:00 AM

• The Financial Situation and Financing of Nonfinancial Corporations in the Ten New EU Member States – A First Empirical Orientation (PDF, 220 kB) Reininger, Walko. Reininger, Walko – Focus on European Economic Integration 2006 This paper provides a first stocktaking of the available data on the financial situation and the financing of nonfinancial corporations (NFCs) in the ten new EU Member States (NMS-10). It focuses on comparing the situation in the NMS-10 with the status quo in the euro area. For most indicators of financial results and of the structure of liabilities and financial assets, the range between the minimum and the maximum within the euro area was sufficiently wide to embrace the corresponding NMS-10 values. Thus, the two groups are not very different from each other in this respect. Still, there are some differences between them that tend to be typical and are primarily attributable to the ongoing catching-up process of the NMS-10 economies and the more prominent role of inward FDI as well as the still minor role of outward FDI in their economic structure. en Jun 30, 2006, 12:00:00 AM

• The CEEC Website (PDF, 63 kB) Kirova – Focus on European Economic Integration 2/2006 en Jun 30, 2006, 12:00:00 AM

• Highlights (PDF, 139 kB) Focus on European Economic Integration 2/2006 en Jun 30, 2006, 12:00:00 AM

• Olga Radzyner Award for Scientific Work on European Economic Integration (PDF, 43 kB) Focus on European Economic Integration 2006/2 en Jun 30, 2006, 12:00:00 AM

• Statistical Annex (PDF, 136 kB) Focus on European Economic Integration 2/2006 en Jun 30, 2006, 12:00:00 AM