Focus on European Economic Integration Q4/12

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• Focus on European Economic Integration Q4/12 (PDF, 2.2 MB) December 2012.

Studies and Analyses

• Call for Applications (PDF, 698 kB) en Dec 31, 2012, 12:00:00 AM

• Recent Economic Developments and Outlook (PDF, 1.4 MB) en Dec 31, 2012, 12:00:00 AM

• Outlook for Selected CESEE Countries: Renewed Slowdown Followed by Modest Recovery (PDF, 1.1 MB) en Dec 31, 2012, 12:00:00 AM

• How Sustainable Are Public Debt Levels in Emerging Europe? (PDF, 1.4 MB) Eller, Urvová. Markus Eller, Jarmila Urvová – Focus on European Economic Integration Q4/12 To assess to which extent public debt positions in four CESEE economies (the Czech Republic, Hungary, Poland and Slovakia) are sustainable in the medium term, we apply a stochastic debt sustainability analysis (SDSA), building on Celasun, Debrun and Ostry (2007). In contrast to conventional debt sustainability analyses, this approach explicitly accounts for the risks surrounding medium-term debt dynamics, e.g. risks stemming from the interaction of (endogenously determined) fiscal and macroeconomic shocks. This is one of the first papers explicitly applying an SDSA to countries in emerging Europe. The baseline projections suggest that, on average, public debt would not get out of control in any of the four countries until 2016. However, when we also account for the risks around the median projection, the primary balance is apparently not responsive enough (with regard to public debt) so that increasing debt paths cover a considerable share of the overall frequency distribution. The probability of reaching, in 2016, a higher debt-to-GDP ratio than in 2011 is largest in the Czech Republic and Slovakia and less pronounced in Hungary and Poland. When confronting the baseline projections with alternative policy scenarios, we can confirm the importance of a timely and continuous response to debt developments; otherwise public debt will quickly get out of control. Furthermore, compliance with the defined Stability and Convergence Programme targets limits the overall risks to the debt outturns. en Public debt sustainability, fiscal reaction function, fan charts, stochastic simulations, public debt forecast, Central and Eastern Europe C54, E62, H63, H68, E62, P2 Dec 31, 2012, 12:00:00 AM

• The Impact of Memories of High Inflation on Households’ Trust in Currencies (PDF, 1.3 MB) Beckmann, Scheiber. Elisabeth Beckmann, Thomas Scheiber – Focus on European Economic Integration Q4/12 Many Central, Eastern and Southeastern European (CESEE) economies experienced periods of hyperinflation during transition. Given the importance of trust for households’ financial decision making, we analyze how memories of high inflation influence people’s trust in currencies. Individuals who have lived through periods of economic turbulence are more likely to perceive the euro as more trustworthy than the local currency. Individuals who have experienced hyperinflation retain an inclination for a safe haven currency and remain more alert to economic turbulence and prone to distrust currencies in general. en Trust in currencies, euroization, financial crisis, survey data; Central, Eastern and Southeastern Europe D03, D14, D83, D84, G01 Dec 31, 2012, 12:00:00 AM Oesterreichische Nationalbank

• IMF October 2012 World Economic Outlook and Global Financial Stability Report (PDF, 593 kB) Lerner. Christina Lerner – Focus on European Economic Integration Q4/12 en Dec 31, 2012, 12:00:00 AM

• 10th ESCB Emerging Markets Workshop (PDF, 955 kB) Slacík. Tomáš Sla?ík – Focus on European Economic Integration Q4/12 en Dec 31, 2012, 12:00:00 AM

• 17th Global Economy Lecture: John Van Reenen Trade-Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity (PDF, 893 kB) Julia Wörz – Focus on European Economic Integration Q4/12 en Dec 31, 2012, 12:00:00 AM

• Statistical Annex (PDF, 674 kB) en Dec 31, 2012, 12:00:00 AM

• Notes (PDF, 335 kB) en