Since August 2007, the world economy has fallen into recession and been confronted by a severe financial crisis. In the midst of this global recession, what hope can we place in the fiscal stimulus plans that have been announced? This Working Paper evaluates whether the measures implemented in the euro area and the US will be adequate responses. It indicates that while these measures will undoubtedly prove useful in limiting the scale and duration of the downturn, they will not be sufficient by themselves to prevent a lengthy recession followed by a tepid recovery.

When the market for a certain good is sufficiently competitive, economic activities can be studied through the market-pricing mechanism. Because this is usually not feasible in the case of environmental goods with an embodied natural and cultural heritage, particular methods for economic valuation of such goods have to be applied. This working paper presents the economic valuation of the Landscape Development and Protection Area of Volčji Potok, which is an important Slovenian cultural landscape with internationally recognised characteristics.

We compare three EU countries that have recently experienced substantial but very different reforms of their family support systems: Austria, Spain and the UK. The structure of these systems is different: Austria emphases universal benefits, Spain tax concessions and the UK means-tested benefits. First the paper compares the distributional implications of these three approaches. The recent reforms have reinforced existing structures while increasing the amount of spending for children.

Regional disparities in the growth rates of GDP and total factor productivity (TFP) are a major policy concern in the EU, not least because of its inclusion of new transition economies. The growth rate of a nation’s TFP especially depends on its level of human capital rather than the increasing rate of human capital. The growth that is driven by innovation and the catching-up process spurred by technology imitation relies on education-based human capital and related agglomeration.

In the background of the Doha Round of trade negotiations, this study proposes a CGE assessment of multilateral liberalisation of market access for non-agricultural products. The scenarios considered include the so-called ‘Girard proposal’ (with alternative choices for the coefficient involved), the removal of tariff peaks and complete liberalisation.

Long-run per capita economic growth is driven by productivity growth. Major determinants of productivity are investments in education and research, and the intensity of competition in product markets. While these ideas have been incorporated into modern growth theories and tested in empirical analyses, they have not yet found their way to applied macroeconomic models used to forecast economic developments. In this paper, the authors discuss various options to include human capital, R&D and product market competition in a macroeconomic framework.

The aim of this paper is to estimate the effect of the EU’s eastern enlargement on the trade patterns of the Central and Eastern European countries (CEECs) that joined the Union in May 2004. In particular, the paper investigates whether and how the EU’s free trade agreements (FTAs) with the CEECs have affected centre-periphery and intra-periphery trade flows. It also evaluates whether the EU-membership factor has had the added positive effects on exports from the CEECs as anticipated.

Economic convergence of the EU’s new member countries (NMCs) towards the incumbent EU countries (EU-15) is of paramount importance for both partners, not only in terms of real income but also in nominal terms. This study creates a dynamic, computable general equilibrium model, starting from the Balassa-Samuelson two-sector framework, which is then modified and enlarged (with, among other things, endogenous capital formation, consumption behaviour and labour mobility) to address several other issues such as uncertainty, welfare and sustainability in terms of foreign indebtedness.

This paper documents the financial consequences of widowhood using both cross-section and panel data from the European Community Household Panel. The research reveals that there are large differences across countries. For example, widowed persons in Greece and Portugal have the lowest income – less than a half that of those widowed in Austria. Cross-country differences decrease somewhat if we consider household income net of housing costs, owing to the higher share of home ownership in low-income countries.

This study analyses how public R&D financing impacts companies. Our main goal is to study whether public and private R&D financing are substitutes or complements, and whether this impact differs between financially constrained and unconstrained companies. Our company-level panel data cover the period from 1996 to 2002. The statistical method employed in the research takes into account the possibility that receiving public support may be an endogenous factor. Our results suggest that public R&D financing does not crowd out privately financed R&D.