The EU Single Market and the Maastricht Treaty are now aged 25. In this short history many events marked the way: the creation
of EMU in 1999, the introduction of the euro in 2002, and the great EU enlargement starting in 2004. And lastly – for the
first time – with the Brexit a reverse of the process of European integration takes place. The recession of 2009 and the Euro
crisis in 2010 led to a setback in the economic development in the EU. A quarter of a century invites to look back about the
achievements. How much trade and economic growth could be created by the Single Market plus euro plus EU enlargement? These
questions are treated here with the help of a consistent integration model. Embedded into an endogenous growth model approach
growth and trade effects for EU and EFTA countries are estimated. It turns out that (taking also into account GATT liberalisation)
the European integration added to per-capita GDP 0.5 percentage point to EU 28 countries but only 0.2 percentage point to
EFTA countries. Trade openness increased by 0.9 percentage point of GDP in EU 28 and by 0.3 percentage point in EFTA countries.
This essay reconsiders the interaction between the development of economic theories and economic reality since the 1920ies.
I begin with the systemic cause of the financial crisis, the coincidence of three "bear markets" (stocks, real estate, commodities)
which followed three parallel "bull markets". I then sketch the macroeconomic effects of the "manic-depressive" fluctuations
of asset prices and show how they paved the road into the present crisis. As next step, I explain how "bulls" and "bears"
are brought about. Then I sketch how the treatment of financial markets in economic theory and policy has shaped the long
cycle from the financial boom of the 1920ies, the Great Depression, the post-war prosperity under "realcapitalistic" framework
conditions to the "finance-capitalistic" regime since the 1970ies. The paper concludes with proposals how Europe could find
roads to new prosperity. After the upcoming financial crisis there will be a window of opportunity to implement these proposals.
Mit finanzieller Unterstützung von: Jubiläumsfonds der Oesterreichischen Nationalbank
Online seit: 02.11.2018 0:00
This paper analyses the effects of the introduction of the tax relief for families family bonus (Familienbonus) and supplementary
child benefit (Kindermehrbetrag) on household income in Austria, using the WIFO-Micromod microsimulation model that is based
on the EU-SILC data. The average yearly (person-weighted) equivalised household income increases by 320 €, which corresponds
to a relative increase of 1.4 percent. For the families concerned, the reform leads to an increase in the corresponding income
by 733 € or 3.1 percent and to a reduction in the average yearly income tax burden by 1,556 €. The effects are most pronounced
in the medium range of the household income distribution. The total personal income tax revenue decreases by 1.5 billion €
Leading indicators still point to favourable cyclical conditions in Austria until the end of 2018. GDP growth for the year
as a whole is set to reach 3 percent. Currency crises in some emerging market countries, lack of clarity about the further
course of US trade policy, and uncertainty surrounding the terms of Brexit increasingly strain international trade and with
it business activity in highly export-oriented economies. These factors will dampen GDP growth also in Austria, which is expected
to receed to 2 percent in 2019.
The Austrian economy continued to grow at a strong pace in the late summer of 2018, although the trend toward declining unemployment
slowed. In the euro area, growth remains stable, albeit modest. The US economy has benefitted from expansive fiscal policy,
posting particularly strong growth rates. Recent trade-policy signals have been stoking uncertainty. This, in combination
with a sharp depreciation in emerging market currencies, has had a dampening effect on global trade, with potential knock-on
effects for export-oriented industrialised economies.
In 2016, the cash-flow-to-sales ratio of the Austrian manufacturing sector reached an estimated 10.0 percent, a value higher
than the previous year's ratio of 9.4 percent. The ratio should have further increased to 11.0 percent in 2017. The rising
profit-ability ratio of manufacturing corresponds with sound economic growth performance of the sector. Its real value-added
growth rate amounted to 1.3 percent in 2016 and 6.7 percent in 2017, respectively. According to additional estimates of a
dynamic panel-econometric model at the industry level, the cash-flow-to-sales ratio in manufacturing will continue its up-ward
trend in 2018.
After a rather sluggish growth at the beginning of the year, economic activity in the USA gained considerably momentum in
the second quarter. In the EU, following a weak start, economic growth stabilised in the second quarter, although it slowed
again in the euro area. The economy in Austria continues to expand strongly. Despite growth slowing down in comparison to
previous quarters, GDP continues to expand faster than in the average of euro area countries. Unemployment dropped again in
This paper investigates the impact of human capital on the process of innovation and technology catch-up in European Union
countries. Based on the framework proposed by Benhabib and Spiegel (in: Aghion and Durlauf (eds) Handbook of economic growth,
1A, North-Holland, Amsterdam, 2005), a panel data model is estimated from 1950 to 2011 using the improved total factor productivity
and human capital variables included in PWT 8.0. Following Vandenbussche et al. (J Econ Growth 11(2):97-127, 2006) we also
analyse the differential impact of skilled and unskilled human capital on growth. The empirical analysis applies instrumental
variables panel data methods which resolve the endogeneity bias. Our results show robust evidence of the significant direct
and indirect effects of human capital on the process of total factor productivity growth in euro area countries. When we analyse
the impact of different kinds of human capital on different ways of increasing TFP we conclude that, regardless of academic
level, the quantity of unskilled human capital boosts imitation in EU countries while, by contrast, highly qualified human
capital is essential for growth through innovation.
The disconnection between productivity and workers' compensation after 1980 is a fact not only for the USA, Canada, Japan
but also for Europe. The level of the decoupling between labour productivity and real hourly compensation is highest in the
USA and Japan and lowest in Norway and Germany. This study investigates the great decoupling phenomena between 1950 and 2014
for eight economies with available time series data. The results should assist policy makers in developing efficient wage-setting
mechanisms and help researchers in the field of wage moderation policy and the great decoupling. For this purpose we use fractional
integration and cointegration techniques. Countries with stagnating minimum wages, rigid wage moderation policy and a high
level of technological progress (strong total factor productivity growth) register higher wage stagnation in relation to labour
productivity. Policy makers should be extremely careful when using wage moderation policy to improve a country's competitiveness
and should monitor the wage stagnation behind labour productivity (great decoupling) since workers have been producing more
but receiving significantly less since 1980. The great decoupling is more prominent today and it is constantly increasing
not just in the USA and Japan but worldwide.