Etla » EU

EU:n rahoituskehykset – Suomen asema seuraavalla kehyskaudella 2014-2020

Hannu Kaseva — Fri, 04 Dec 2009 11:00:00 +0000

The study analyses the financial framework of the European Union in 2014-2020 and the prospects of Finland in this framework. The study is structured according to budget headlines the most central of which are the natural resources (agriculture and rural development), cohesion (regional and structural policies), and competitiveness. Scenarios concerning the future are built upon alterna-tive developments in the composition of the budget. The development of Finlands net payment posi-tion is analysed using different assumptions of GDP growth. A central assumption in most scenarios is the fact that the budget shares of the natural resources and regional and structural policies will decline substantially, also giving room to cut the size of the budget. According to our study, Finland will be able to adjust to the changes in the structure of the budget. In the case of agriculture, an increase in the size of farms, productivity growth, and especially the assumed continued national agricultural support will have an outcome that the level of agricultural output does not change substantially. In regional policy, a decrease in the growth of or cuts in EU regional subsidies can be compensated for by na-tional subsidies. The pressures for adjustment which Finland will face during the future financial framework will be decreased because during the current financial period Finland already experienced many adjustments. Finland will be able to respond to the growth of funding under the competitiveness headline, if the country will be able to develop capabilities to apply for research and other competi-tiveness funding.

JEL: O52, F53, F55, H87, Q18, R58, I28
Publication year: 2009
Pages: 102
Price: 10€
Language: Finnish
Discussion Papers no. 1207

Tax/benefit Systems and Growth Potential of the EU

admin — Thu, 14 Feb 2008 11:00:00 +0000

The EU has ambitious goals in terms of economic performance. The goals are to be reached in combination with social cohesion and sustainable development in terms of environment. The key economic policy instruments to be used by the EU member states are comprised of taxes and benefits. The economic and political framework for carrying out measures in this field is currently delineated, both encouraged and constrained, by factors such as ageing, globalisation and more intense international system competition in tax and social policies.

The aim of the project Tax/benefit systems and potential growth of the EU – TAXBEN (SCS8-CT-2004-502639), as outlined in SSP Priority 8 Topic 3.1. Task 4, has been to carry out an in-depth analysis of tax/benefit policies in five broad themes, where these policies play a crucial role in terms of the key EU goals : Employment; Corporate taxes under tax competition; Productivity growth and convergence; Macroeconomic policies under a single monetary policy; and Environment and climate change. The project was carried out by seven European economic policy research institutes within the ENEPRI (European Network of Economic Policy Research Institutes) network.

The project team has used many novel approaches, especially in building new tools that rely on the approach of general equilibrium models so that both the direct and indirect effects of taxation can be analysed. Also new applications of existing large-scale multi-country models were carried out to evaluate the impact of tax policies. In addition, recourse was taken to econometric estimation of the relationships between key economic target variables, on the one hand, and tax/benefit and other fiscal policies and other labour market indicators, on the other, using large international data sets. A number of theoretical approaches on economic policies under the single currency were carried out, too. The analysis covered the EU-15 countries, the New Member States, in some cases other OECD countries as well, and some research efforts made had a global approach to policy making.

Altogether, the projects output was 24 working papers in the five Work packages, and five seminars held, in addition to the Final Conference. The project delivered, on the one hand, a large number of research insights on actual behaviour related to tax/benefit systems and, on the other hand, reached conclusions which should be taken into account while considering policy-making in, and reforms related to, tax/benefit policies in the EU.

The projects web site at www.taxben.org provides detailed information on the whole output and events arranged within the project. Contact person is Kari E.O. Alho : Kari.Alho@etla.fi, scientific co-ordinator of TAXBEN.

Publication year: 2008
Pages: 89
Price: 10€
Language: English
Discussion Papers no. 1122

Growth Prospects of Emerging Market Economies in Europe – How Fast Will They Catch up with the Old West?

admin — Sun, 30 Dec 2007 11:00:00 +0000

Using a neo-classical growth model, we analyse the real and nominal GDP per capita convergence of 21 emerging market economies (EMEs) of Central and Eastern Europe towards the EU15 average by 2050. We estimate the countries initial capital stocks and project future investment as a function of the GDP per capita gap, among other things, in order to have converging physical capital intensities in the long run. Due to standard-convergence in the model, catching up will continue at a decelerating speed. Also nominal convergence in prices that will lead to a real appreciation of the EME currencies with respect to the euro is projected as a function of the GDP-per-capita gap vis-à-vis the EU15. We also discuss whether the level of human capital in the EMEs is likely to allow for full catching up. We argue that the EU membership of most of the EMEs is likely to improve their economic, investment and business environments and lead to economic and other policies that support long-term convergence. According to the results, the EMEs will not quite catch up with the EU15 by 2050. However, our analysis of the uncertainty related to the growth rates and calculations of a confidence band for the results, as well as a qualitative assessment of other factors (politics, institutions, human capital) that have not been taken into account in the model explicitly lead us to conclude that some of the EMEs are likely to catch up with the EU15 average during the course of the next couple of decades.

JEL: O47
Publication year: 2007
Pages: 46
Price: 10€
Language: English
Discussion Papers no. 1115

Free Trade between the EU and Russia – Sectoral Effects and Impacts on Northwest Russia

Ville Kaitila — Tue, 10 Apr 2007 11:00:00 +0000

We analyse the implications of free trade between the EU25 and Russia using GTAP, a computable general equilibrium model. We review the sectoral effects by countries and make a tentative assessment of the impact on the regions in Northwest Russia. Free trade on its own would have a negative terms-of-trade effect in Russia and cause a small decline in welfare. If coupled with an increase in productivity, welfare would increase. This emphasises the importance of reforms in the Russian economy. The quantity of production in Russia in ferrous and non-ferrous metallurgy, machine building and metal working, and wood and paper are the principal declining sectors with free trade. Production in capital goods, fuel industry, and services increases. Thus there are some symptoms of Dutch disease. Due to its production structure the northwest would seem to benefit slightly less than Russia on average in terms of the volume of gross regional product. In this respect there are differences between the regions of northwest Russia.

JEL: F15, F17
Publication year: 2007
Pages: 23
Price: 10€
Language: English
Discussion Papers no. 1087

Productivity, Employment and Taxes – A SVAR Analysis of Trade-offs and Impacts

admin — Tue, 27 Feb 2007 11:00:00 +0000

The paper considers time series evidence on the relationships, and possible trade-offs, between productivity and employment, and on the impact of taxes in this connection. First, a theoretical model is built for an open economy leading to the identification of technology, non-technology and labour and capital tax wedge shocks, as based on their long-run effects. Then structural VAR models are estimated for the EU-15 and some other OECD countries to infer the above relationships. Our conclusion is that there is in the EU a fairly uniform and significant short-run negative impulse on employment from a positive productivity shock, while this becomes smaller and statistically insignificant over time in most, but not in some member countries. The former situation is interpreted to be an indication of nominal and the latter that of real or structural rigidity in the economy. In the US, there is no such trade-off, either in the short or long run. The impulse response of the shocks in the tax wedge on labour in the aggregate EU-15 is a fairly sizeable negative impact on employment both in the short and long run, and the effects of capital income tax shocks are negative on productivity. In the majority of the individual EU-15 countries these results are not, however, statistically significant.

JEL: O49, H29, J20
Publication year: 2007
Pages: 19
Price: 10€
Language: English
Discussion Papers no. 1074

Productivity, Empoyment and Taxes – Evidence on the Potential Trade-offs and Impacts in the EU

admin — Wed, 15 Nov 2006 11:00:00 +0000

The paper considers time series evidence on the relationships, and possible trade-offs, between productivity and employment, and on the impact of taxes in this connection. First, a theoretical model is built for an open economy leading to the identification of technology, non-technology and tax shocks. Then structural VAR models are estimated for all the EU-15 and some other OECD countries to infer the above links. Our conclusion is that there is in the EU a fairly uniform and significant short-run negative impulse on employment from a positive productivity shock, while this becomes smaller and statistically insignificant over time in most, but not in some member countries. The former situation is interpreted to be an indication of nominal and the latter that of real or structural rigidity in the economy. In the US, there is no such trade-off, either in the short or long run. Tax shocks are found to have mostly a short-run negative effect which is stronger on productivity than on aggregate employment. However, if we separate the effects of labour taxes and corporate taxes, the former have in the EU-15 a strong negative effect on employment while the latter are fairly neutral. Second, we simulate an aggregative econometric labour market model and insert various types of shocks into it : a rise in productivity, achieved, e.g. by enhancing R&D, or by rationalising the use of labour, and a change in the tax/benefit system. We find that although there is no long-run trade-off between productivity and employment, over the medium run acceleration of productivity has a clear positive effect on employment.

JEL: O49, H29, J20
Publication year: 2006
Pages: 24
Price: 10€
Language: English
Discussion Papers no. 1054

Structural Reforms in the EU and Political Myopia in Economic Policies

admin — Thu, 09 Nov 2006 11:00:00 +0000

The paper considers economic reforms in the EU using an economic-political model which captures the possible myopia in economic policies, and analyses reforms in taxation, the welfare state, and in the labour and product markets. We show that high taxes and an extensive welfare state are likely to be the case under myopia as compared to the social optimum. We also consider the interaction between the reform activity and the Stability and Growth Pact, which hampers reforms in tax policies, but is conducive to reforming the wel-fare state, the product and labour markets, although the magnitude of these impacts is not marked under the actual tightness of the Pact. We also find that economic and political considerations tend to favour the emphasis to be put on reforming the goods market, instead of the labour market, which has also broadly speaking been the case in reality in the EU. Econometric evidence presented in the paper also supports these results. Coordination of re-forms in the EU is most important in the case of the product market, but not in other fields.

JEL: E20, H30
Publication year: 2006
Pages: 30
Price: 10€
Language: English
Discussion Papers no. 1050

Economic Effects of Free Trade between the EU and Russia

admin — Wed, 30 Mar 2005 11:00:00 +0000

JEL: F15, F17
Publication year: 2005
Pages: 14
Price: 10€
Language: English
Discussion Papers no. 969

Citizens Should Vote on Secession

Niku Määttänen — Wed, 20 Oct 2004 11:00:00 +0000

JEL: H77, D72, D61
Publication year: 2004
Pages: 15
Price: 10€
Language: English
Discussion Papers no. 939

Integration and Conditional Convergence in the Enlarged EU Area

Ville Kaitila — Thu, 07 Oct 2004 11:00:00 +0000

Publication year: 2004
Pages: 17
Price: 10€
Language: English
Discussion Papers no. 935