Focus on Transition

Editorial
Recent Economic Developments
Developments in Selected Countries 
Franz Schardax et al.

Studies

Similarity of Supply and Demand Shocks – Between the Euro Area and the Accession Countries 
Iikka Korhonen and Jarko Fidrmuc
This paper assesses the correlation of supply and demand shocks between the countries of the euro area and the CEECs in the 1990s. Shocks are recovered from estimated structural VAR models of output growth and inflation. We find that some accession countries have a quite high correlation of the underlying shocks with the euro area. However, even for many advanced accession countries, the shocks remain significantly more idiosyncratic. Furthermore, many EU countries seem to have a much higher correlation with the core euro area countries than in the previous decades. Continuing integration within the EU seems to have aligned the business cycles of these countries as well. 

Determinants of Real Exchange Rates in Transition Economies 
Bostjan Jazbec
This paper argues that real appreciation had different sources over time and across countries. Building on a simple analytical framework, the paper disentangles these differences and stresses the role of structural reforms and factor reallocation in determining the behavior of real exchange rates. Empirical findings seem to confirm that transition – when looking only at real exchange rate behavior – is over once the progress in structural reforms does not affect real exchange rate determination relative to other factors. 

Old-Age Pension Systems in the Czech Republic, Hungary and Poland 
Janos Kun
The paper investigates the old-age pension systems of three EU accession countries, the Czech Republic, Hungary and Poland. After a historical overview, the developments in the pension systems since the beginning of transition are presented. All three countries  developed their pay-as-you-go pension systems further in the 1990s in order to cope with an aging population: the retirement age was increased and the relationship between contributions and benefits was strengthened. Moreover, voluntary private pension funds were established in all three countries and obligatory pension funds were set up in Hungary and Poland, although Hungary has recently abolished the mandatory character of the latter again. It remains ambiguous whether the private pension funds in the three countries raise the savings rate or just entail a reallocation of savings, given the state subsidies and tax incentives attached to them. The funds invest mainly in domestic securities, and do not hold a significant share of markets yet. Once foreign investment restrictions have been eased, the private pension funds may increasingly diversify their portfolios and raise the share of foreign assets they hold.

Transcarpathia – Ukraine’s Westernmost Region and a Gateway to Central and Western Europe 
Stephan Barisitz
Transcarpathia – also called Carpatho-Ukraine, Subcarpathian Rus or Subcarpathian Ruthenia – lies in the far west of Ukraine and borders on Slovakia, Hungary, Romania and Poland. According to official figures, it is a poor region, even in the Ukrainian context, and is dominated by agriculture and forestry. Tourism has some potential. Given its favorable location, Trancarpathia constitutes a major center for cross-border shuttle trading with and temporary labor migration to neighboring Central European countries. These partly illegal activities are estimated (on average) to double Transcarpathians’ actual incomes and therefore make it easier for the population to cope. This state of affairs is bound to come under threat from the adoption of the Schengen visa regime by Transcarpathia’s/Ukraine’s Central European neighbors as a consequence of EU eastward enlargement, despite positive economic spillover effects of enlargement. Various measures, including EU activities, are suggested to counter possible exclusion effects for the region’s population.

OeNB Activities
Convergence and Divergence in Europe – The OeNB’s East-West Conference 2001 
Lectures organized by the Oesterreichische Nationalbank
The Reactions of the Exchange Rate and Bond Prices to Changing Fundamentals:
The Case of Poland – Andrzej Sawinski 
Presentation of the EBRD’s Transition Report 2001 – Alexander Auböck and Martin Raiser 
The "East Jour Fixe" of the Oesterreichische Nationalbank – A Forum for Discussion
The Monetary Transmission Mechanism in Austria, the Eurosystem and in Central and Eastern Europe -
Peter Mooslechner, Silvia Kaufmann, Ales Capek, Ilmar Lepik, Istvan Hamecz,
Pawe Durjasz and Marian Nemec 
Technical Cooperation of the Oesterreichische Nationalbank with Countries in Transition

Statistical Annex
Compiled by Andreas Nader
Gross Domestic Product 
Industrial Production 
Unemployment Rate 
Consumer Price Index 
Trade Balance 
Current Account 
Total Reserves Minus Gold 
Central Government Surplus/Deficit 
Gross External Debt 
Exchange Rate 
Official Lending Rate