A DSGE model with partial euroization: the case of the Macedonian economy

This paper describes the theoretical structure and estimation results for a DSGE model for the Macedonian economy. Having as benchmark the model of Copaciu et al. (2015), modified to allow for a fixed exchange rate, we are able to match relatively well the volatility observed in the data. Given the monetary policy regime in place, the debt deflation channel is more important relative to the financial accelerator one when compared to the flexible exchange rate case. The lack of balance sheet effects results in no significant differences in terms of net worth evolution across the two types of entrepreneurs when impulse response functions are evaluated. However, the shocks related to the financial sector appear to be especially important for investment, for the domestic interest rate and interest rate spreads, illustrating the relevance of including financial frictions in the model. With the exchange rate not acting as a shock absorber, the external shocks are more relevant for the CPI inflation and the domestic interest rate. The drop in GDP associated with the pandemic mainly reflects the negative innovations to the consumption preference shock and to the permanent technology shock.

Globalization of Agriculture and Atomization of Farming: Small Farms Crisis in Asia

Agriculture in Asia is being pushed into a new policy regime that uncritically promotes free trade and laissez faire policies. The World Trade Organization agreement on agriculture, regional preferential trading arrangements (PTAs) and neoliberal policies pursued by the individual nations are the central features of the new regime. The new regime is built disregarding the existing knowledge on agricultural commodities that they are prone to market failures, which are unlikely to be corrected if left unregulated. In this article, we portray the new regime in terms of two defining processes that are at work, viz. globalization of agriculture and atomization of farming. Globalization happens on account of integration of the agricultural markets at provincial, national and global levels. Atomization of farming occurs due to fragmentation of holdings on the one hand and weakening of ‘collective action’ on the other. In the farming end of the value chains, millions of small farms, who lack any market power whatsoever, compete among themselves. The post-harvesting nodes have fewer and larger firms. As we have argued at length, the large firms inhabiting the postharvest nodes of the commodity chains are capable of extracting profit out of volatilities in the market. The non-farm nodes are characterized by economies of scale and possible accumulation of market power. Such profiteering will be at the expense of the atomized farms as well as the final consumers of the commodities. The policy has become suddenly very active in abetting competition upstream and limiting it downstream. The regime legitimizes entry barriers downstream and intervenes directly to promote entry, augment supply/competition upstream. The policymakers do not want to intervene in the market to save producers from commodity problems; instead favour players profiteering out of such possible instances of market failure.

Theoretical and methodological framework for the analysis of international forest political processes by stakeholders´ perceptions at national level

Forests cover about 30% of the world´s land area and provide people and nature with essential ecosystem services and goods. Despite their importance, forests continue to be degraded. A variety of international forest governance and policy arrangements have developed to foster protection and sustainability of forests. However, number of studies point to nonexistence of a global forest policy regime per se, and growing institutional fragmentation of forest governance arrangements. In line with continuing priority of national sovereignty in the international regulation of forest policy, the role of domestic policies, mainly domestic forest policy actors, is considered central to international forest governance analysis by many researchers. The paper aimed to set the framework for the international forest policy analysis by domestic forestry stakeholders´ perceptions. The dimensions of Policy Arrangements Approach modified for purpose of meeting the nature of research, serve as theoretical foundations. In the first part, the paper aim to define dimensions theoretically. In the second part, specific international forest-focused political processes are described through adapted dimensions. The two steps serve as the basis for research to be subsequently applied in selected European countries.

Institutional complexity traps in policy integration processes: a long-term perspective on Swiss flood risk management

Complexity is inherent to the policy processes and to more and more domains such as environment or social policy. Complexity produces unexpected and counterintuitive effects, in particular, the phenomenon of policy regimes falling short of expectations while made by refined policies. This paper addresses this phenomenon by investigating the process of policy integration and its nonlinearities in the long run. We consider that the increase in the number of policies unexpectedly impacts the policy coherence within a policy regime. We argue that, depending on the degree of policy interactions, this impact varies in direction and intensity over time, which explains nonlinearities in integration. The impact turns negative when the regime is made of numerous policies, which favors non-coordinated policy interactions. Finally, the negative impact prevents further integration as stated by the Institutional Complexity Trap hypothesis and explains the contemporary paradoxical phenomenon of ineffective policy regimes made of refined policies. Empirically, we draw on a relational analysis of policies in the Swiss flood risk policy regime from 1848 to 2017. We study the co-evolution of the number of policies and of their de facto interlinkages, i.e., the co-regulations of a common issue. Findings support that the Institutional Complexity Trap is a structural and long-term dynamic punctuated by periods of policy learning and policy selection. We identify three main phases in the evolution of the regime: the start (1848–1874), the development (1874–1991), and the Institutional Complexity Trap (since 1991).

Estimating Fiscal Multipliers in Selected Asian Economies

The surge of the coronavirus disease (COVID-19) pandemic has driven countries worldwide to launch substantial stimulus packages to support economic recovery. This paper estimates effects of fiscal measures on output using data from 2000 to 2019 for a panel of nine developing Asian economies and a vector autoregression model. Results show that (i) the 4-quarter and 8-quarter cumulative fiscal multipliers for general government spending range between 0.73 and 0.88 in baselines, in line with recent estimates for developed countries but larger than those for developing countries; (ii) government spending is more effective than tax cuts in boosting the economy; and (iii) an accommodative monetary policy regime can make fiscal measures more effective.

The emergence of a New European Labour Policy regime: Continuity and change since the euro crisis

The architecture of European labour policy has changed in the past years of the euro crisis and its management. While in the pre-crisis phase EU labour policy still had a mainly symbolic character, the EU crisis management gave it a much more binding character. The article analyses the continuities and shifts in European labour policy against the background of austerity and crisis policy arguing that a new labour policy complex was able to emerge at the European level. While institutional shifts were considerable, the market-liberal orientation of labour policy remained in place. However, it was radicalized with the resilience approach. The article therefore provides an overview of the continuity and change of European labour policy in the euro crisis on the basis of institutional and discursive shifts.

Book review: Luca Anceschi. (2020). Analyzing Kazakhstan’s Foreign Policy: Regime Neo-Eurasianism in the Nazarbayev Era

Luca Anceschi. (2020). Analyzing Kazakhstan’s Foreign Policy: Regime Neo-Eurasianism in the Nazarbayev Era. Routledge. 208 pp. ISBN: 9780415711432.

Demand and growth regimes in finance-dominated capitalism and the role of the macroeconomic policy regime: a post-Keynesian comparative study on France, Germany, Italy and Spain before and after the Great Financial Crisis and the Great Recession

We contribute to the recent debates on demand and growth regimes in modern finance-dominated capitalism linking them to the post-Keynesian research on macroeconomic policy regimes. We examine the demand and growth regimes, as well as the macroeconomic policy regimes for the big four Eurozone countries, France, Germany, Italy and Spain, for the periods 2001–2009 and 2010–2019. First, our approach supports the usefulness of the identification of demand and growth regimes according to growth contributions of the main demand components and financial balances of the macroeconomic sectors. This allows for an understanding of the demand sources of growth, or stagnation, if there is a lack of demand, of how these sources are financed and of potential financial instabilities and fragilities. Second, when it comes to the macroeconomic policy drivers of demand and growth regimes, as well as their respective changes, we show that the exclusive focus on fiscal policies, as in the previous literature, is too limited and that it is the macroeconomic policy regime which matters here, i.e. the combination of monetary, fiscal and wage policies, as well as the open economy conditions.