Month: June 2017

THE UNCOVERD INTEREST PARITY PUZZLE (UIP): EVIDENCE FROM MAJOR CURRENCIES

Athanasios PETSAS

MSc. Hellenic Open University

apetsa@tee.gr

Theodoros PELAGIDIS

Professor, University of Piraeus & NR Senior Fellow, Brookings Institution, US. 21, Lambraki str., GR-18533

pelagidi@unipi.gr

Abstract

This paper investigates empirically the Uncovered Interest Parity puzzle, highlighting the weak relationship between exchange rates and interest rates in particular, using data for the exchange and interest rates from four countries, in different time horizons, running from 3 to 60 months. The analysis in particular focuses on the deviations from rational expectations as a possible explanation of the UIP puzzle.

Keywords: UIP, PPP, Exchange rates

JEL classification: F41, Macro focus

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WHO CARES ABOUT REGIONAL INEQUALITIES? EFFECTS OF FISCAL CONSOLIDATION

Vinko MUSTRA

Assistant professor Faculty of Economics, University of Split, Cvite Fiskovića 5, 21000 Split, Croatia

vmustra@efst.hr

Abstract

The most recent global economic crisis and the concerns about long-term (un)sustainability of public finances has supported the implementation of budgetary consolidation measures. Although there are relatively large number of papers investigating the impact of fiscal consolidation on different aspect of economy this paper represent unique attempt of investigating the effects of fiscal consolidation on regional inequalities. We test the hypothesis that in the period of fiscal consolidation, when some spending cut and/or tax hikes, less developed regions are not in position to protect themselves against undesired redistributive policies which put them in more disadvantaged position and increase regional inequalities. In empirical part of the paper we explore the impact of fiscal consolidation on regional inequalities on national levels among 13 EU member countries for period 1995-2009. Two groups of variables are particularly important for this study: measure of regional inequality and fiscal consolidation. Due to fact that recent literature recognizes problems with using cyclically-adjusted primary budget balance (CAPB) as a measure for fiscal consolidation we extend regional empirical literature by using a new database of fiscal consolidation that successfully tackles all this issues. The results indicate that fiscal consolidation led by tax hikes increases regional inequalities and that fiscal consolidation led by spending cuts doesn’t have significant influence on regional inequalities. Finally, the paper highlights that fiscal consolidation is not only the matter of the public debt levels or economic growth, but also important regional issue.

Keywords: Regional inequalities, Fiscal consolidation, European Union

JEL classification: R12, E62, H23

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LIVE HERE…? NO, THANK YOU! MIGRATION AND ITS CAUSES IN MOENCHENGLADBACH – A CITY FOR LIVING AND WORKING

Rüdiger HAMM

Head of the Niederrhein Institute for Regional and Structural Research (NIERS) at the Niederrhein University of Applied Sciences in Moenchengladbach, Germany, Richard-Wagner-Straße 140, 41065 Moenchengladbach, +4921611866411

ruediger.hamm@hs-niederrhein.de

Geogr. Katja KEGGENHOFF

Research Assistant at the Niederrhein Institute for Regional and Structural Research (NIERS) at the Niederrhein University of Applied Sciences in Moenchengladbach, Germany, Richard-Wagner-Straße 140, 41065 Moenchengladbach, +4921611866424, katja.keggenhoff@hs-niederrhein.de

Angelika JAGER

Research Assistant at the Niederrhein Institute for Regional and Structural Research (NIERS) at the Niederrhein University of Applied Sciences in Moenchengladbach, Germany, Richard-Wagner-Straße 140, 41065 Moenchengladbach, +4921611866432, angelika.a.jaeger@gmail.com

The original version of this document was drafted in German and published in the journal RaumPlanung 185 / 3-2016 of the `Informationskreis für Raumplanung e.V.´ (IfR).

Abstract

One of the essential tasks and goals of local policy makers and administrations is to provide a high quality of life and work for citizens and employees in a specified location. This especially applies in times of demographic change, in which cities are increasingly facing the challenge of an aging and shrinking population in the inter-municipal competition. Hence, key questions arise, such as: Which factors determine choice of location of private households? How are these factors evaluated in the living and working area of Moenchengladbach? In order to answer these questions, in a first step the migration processes of the city of Moncheng-ladbach are examined based on secondary statistics. In a second step, three primary statistical sur-veys are conducted in order to reveal information on which crucial factors influence the choice of residence for the observed migration processes and how the quality of Moenchengladbach as a resi-dential location is evaluated.

Keywords: Migration, Urban development, Locational factors, Citizens’ satisfaction, Job mobility

JEL classification: R21, R32

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