OECD Journal: Economic Studies

English
Frequency
Annual
ISSN: 
1995-2856 (online)
ISSN: 
1995-2848 (print)
http://dx.doi.org/10.1787/19952856
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OECD Journal: Economic Studies publishes articles in the area of economic policy analysis, applied economics and statistical analysis, generally with an international or cross-country dimension. It draws significantly on economic papers produced by the OECD Economics Department, other parts of the OECD Secretariat and the Organisation’s intergovernmental committees.
We also welcome comments on articles previously published in the Journal.

 

Latest Articles Hide / Show all Abstracts

Mark Number Date Article Volume and Issue Click to Access
  07 Mar 2017 Efficiency and contestability in emerging market banking systems
Christian Daude, Julien Pascal

This paper explores some of the potential determinants of efficiency and contestability in the banking systems of major emerging countries, using a sample of the 24 countries over the period 2004-13. Stochastic and data envelopment analyses are used to estimate national levels of efficiency, while market contestability is captured through the H-statistic. Panel data econometric methods are used to determine potential drivers of both efficiency and market contestability, which provides the basis for an evaluation of potential complementarities and trade-offs between these two dimensions.

JEL classification: E44, G14, G21, G28, L11
Keywords: Banking, competition, efficiency, emerging markets                                                      

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec004.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/efficiency-and-contestability-in-emerging-market-banking-systems_eco_studies-2016-5jg1jxfzdj9v
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  07 Mar 2017 National testing policies and educator based testing for accountability
William C. Smith

Increasingly accountability in education has linked student test scores to teacher and school evaluations. The underlying assumption behind this educator based accountability is that the high stakes linked to student test scores will prompt behavioral change, thus improving student learning and education quality. This study conducts a cross policy analysis using pooled data from the 2009 PISA, categorizing participant countries of the 2009 PISA into three national testing policies based on what type of educator based accountability is applied in the country. Results indicate that initial differences between national testing policy categories are not significant once school types and school practices that select on the student are included. This suggests that potential gains from more stringent accountability may be an artifact of schools under pressure engaging in practices that shape their testing pool, such as admitting only relatively high achieving students or transferring out lower achieving students.

JEL classification: I21, I24, I25, I28
Keywords: Education, PISA, accountability, testing, equity                                                  

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec005.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/national-testing-policies-and-educator-based-testing-for-accountability_eco_studies-2016-5jg1jxftj4r3
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  07 Mar 2017 Administrative fragmentation and economic performance of OECD TL2 regions
David Bartolini

The present work investigates the relationship between administrative fragmentation and regional per capita GDP growth rate, using a panel of OECD TL2 regions in the period 1996-2011. According to the fiscal decentralisation literature, fragmentation should enhance growth as local governments can implement policies that better match citizens’ needs, thus providing services and public goods in a more efficient way. The presence of many local governments, however, may result in overlapping functions, (dis)economies of scale, and uncoordinated policies.

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec001.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/administrative-fragmentation-and-economic-performance-of-oecd-tl2-regions_eco_studies-2016-5jg318w59m6h
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  07 Mar 2017 The quantification of structural reforms in OECD countries: A new framework
Balázs Égert, Peter Gal

This document describes and discusses a new supply side framework that quantifies the impact of structural reforms on per capita income in OECD countries. It obtains the overall macroeconomic reform impacts by aggregating over the effects on physical capital, employment and productivity through a production function. On the basis of reforms defined as observed changes in policies, the paper finds that product market regulation has the largest overall single policy impact five years after the reforms. But the combined impact of all labour market policies is considerably larger than that of product market regulation. The paper also shows that policy impacts can differ at different horizons. The overall long-term effects on GDP per capita of policies transiting through capital deepening can be considerably larger than the 5- to 10-year impacts. By contrast, the long-term impact of policies coming only via the employment rate channel materialises at shorter horizon.

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec003.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/the-quantification-of-structural-reforms-in-oecd-countries-a-new-framework_eco_studies-2016-5jg1lqspxtvk
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  07 Mar 2017 Long-term growth and productivity projections in advanced countries
Gilbert Cette, Rémy Lecat, Carole Ly-Marin

In this period of high uncertainty about future economic growth, we have developed a growth projection tool for 13 advanced countries and the euro area at the 2100 horizon. This high uncertainty is reflected in the debate on the possibility of a “secular stagnation”, fueled by the short-lived Information and Communication Technology (ICT) shock and the current low productivity and GDP growth in advanced countries. Our projection tool allows for the modelling of technology shocks, for different speeds of regulation and education convergence, with endogenous capital growth and TFP convergence processes.
We illustrate the benefits of this tool through four growth scenarios, crossing the cases of a new technology shock or secular stagnation with those of regulation and education convergence or of absence of reforms. Over the period 2015-2100, the secular stagnation scenario assumes yearly TFP growth of 0.6% in the US, leading to a 1.5% GDP growth trend. The technology shock scenario assumes that the third technological revolution will, in the US, provide similar TFP gains to electricity during the second industrial revolution, leading to a 1.4% TFP trend, to which we add a TFP growth wave peaking in 2040, and thus to an average GDP growth rate of 3%. In non-US countries, GDP growth will depend on the implementation of regulation reforms, the increase in education and on the distance to the country-specific convergence target, namely the US, as well. Over the period 2015-2060, for the euro area, Japan and the United Kingdom, benefits from regulation and education convergence would amount to a 0.1 to 0.4 pp yearly growth rate depending on the initial degree both of rigidity and the TFP distance to the US.

JEL classification: O11, O33, O43, O47, O57
Keywords: Growth, productivity, long-term projections, structural reforms, innovation, education                                              

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec006.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/long-term-growth-and-productivity-projections-in-advanced-countries_eco_studies-2016-5jg1g6g5hwzs
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  07 Mar 2017 Fortune or fortitude? Determinants of successful adjustment with IMF programs
Martin Larch, Kristin Magnusson Bernard, Peter McQuade

Full adjustment programs in the wake of crisis episodes exact a major toll on a country’s economy, yet not all are blessed with success.We identify adjustment needs by a country’s decision to approach the IMF for official assistance.We then investigate the factors conducive to successful exit from official assistance during more than 170 adjustment episodes by means of a panel regression framework. In contrast to the existing literature, we do not use absolute benchmarks. We define success as a resumption of real GDP growth and a reduction of government debt compared to the pre-program period. Our econometric results suggest stringent policy action do play a role for the probability of success. At the same time, we also find that successful exit also very much depends on supportive external conditions and, linked to that, the degree of openness of an economy.

JEL classification: E61, F33, G01, H81
Keywords: Fiscal adjustment, financial crises, IMF lending                                                    

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec007.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/fortune-or-fortitude-determinants-of-successful-adjustment-with-imf-programs_eco_studies-2016-5jg1g64g196g
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  07 Mar 2017 Economic resilience: The usefulness of early warning indicators in OECD countries
Mikkel Hermansen, Oliver Röhn

The global financial crisis and the high associated costs have revived the academic and policy interest in “early warning indicators” of crises. This paper provides empirical evidence on the usefulness of a new set of vulnerability indicators, proposed in a companion paper (Röhn et al., 2015), in predicting severe recessions and crises in OECD countries. To evaluate the usefulness of the indicators the signalling approach is employed, which takes into account policy makers’ preferences between missing crises and false alarms. Our empirical evidence shows that the majority of indicators would have helped to predict severe recessions in OECD economies between 1970 and 2014. In the domestic areas, indicators that measure asset market imbalances (real house and equity prices, house price-to-income and house price-to-rent ratios), perform consistently well both in and out-ofsample. Domestic credit related variables appear particularly useful in signalling upcoming banking crises and in predicting the global financial crisis out-of-sample. Indicators of global risks consistently outperform domestic indicators in terms of their usefulness, highlighting the importance of taking international developments into account when assessing a country’s vulnerabilities. The good performance of the global indicators is however subject to a caveat: they are particularly suited to pick up recessions that affect a large number of countries simultaneously, such as the global financial crisis in 2008/09. The results are broadly robust to different definitions of costly events, different forecasting horizons and different time and country samples.

JEL classification: E32; E44; E51; F47
Keywords: Resilience, early warning indicators, vulnerabilities, imbalances, severe recessions, crises                                                

Volume 2016 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1316011ec002.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/economic-resilience-the-usefulness-of-early-warning-indicators-in-oecd-countries_eco_studies-2016-5jg2ppjrd6r3
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  22 Dec 2015 Incorporating anchored inflation expectations in the Phillips curve and in the derivation of OECD measures of the unemployment gap
Elena Rusticelli, David Turner, Maria Chiara Cavalleri

Inflation has become much less sensitive to movements in unemployment in recent decades. A common explanation for this change is that inflation expectations have become better anchored as a consequence of credible inflation targeting by central banks. In order to evaluate this hypothesis, the paper compares two competing empirical specifications across all OECD economies, where competing specifications correspond to the "former" and "new" specification for deriving measures of the unemployment gap which underlie the OECD Economic Outlook projections. The former OECD specification can be characterised as a traditional "backward-looking" Phillips curve, where current inflation is partly explained by an autoregressive distributed lag process of past inflation representing both inertia and inflation expectations formed on the basis of recent inflation outcomes. Conversely, the new approach adjusts this specification to incorporate the notion that inflation expectations are anchored around the central bank’s inflation objective. The main finding of the paper is that the latter approach systematically out-performs the former for an overwhelming majority of OECD countries over a recent sample period. Relative to the backward-looking specification, the anchored expectations approach also tends to imply larger unemployment gaps for those countries for which actual unemployment has increased the most. Moreover, the anchored expectations Phillips curve reduces real-time revisions to the unemployment gap, although these still remain uncomfortably large, in the case of countries where there have been large changes in unemployment.

JEL classification: C22, E24, E31, J64
Keywords: Anchored expectations, Phillips curve, equilibrium unemployment, real-time revisions

Volume 2015 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1315011ec009.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/incorporating-anchored-inflation-expectations-in-the-phillips-curve-and-in-the-derivation-of-oecd-measures-of-the-unemployment-gap_eco_studies-2015-5jrp104kjgmr
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  22 Dec 2015 Does the post-crisis weakness of global trade solely reflect weak demand?
Patrice Ollivaud, Cyrille Schwellnus

Global trade growth over the past few years has appeared extraordinarily weak, even in relation to weak global GDP growth. This paper shows that the apparent breakdown in the relationship between global trade and global GDP growth is largely explained by two factors: an inappropriate measurement of global GDP and extraordinary demand weakness in the euro area. As a measure of demand for traded goods, global GDP at market exchange rates is more appropriate than the conventional purchasing power parity-based measure. Moreover, extraordinary demand weakness in the euro area – which is a particularly trade intensive region – has had a substantial negative effect on intra-euro area trade flows, which are commonly counted towards global trade. When global GDP is measured at market exchange rates and intra-euro area flows are removed from the measure of global trade, econometric estimations suggest that over the past 15 years the long-term elasticity of global trade to GDP has been similar to that of the 1990s. Indeed, the overwhelming part of postcrisis trade weakness can be attributed to weak global demand rather than structural changes, according to the econometric estimations in this paper and supporting evidence on changes in global investment, international production fragmentation and protectionism.

Volume 2015 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1315011ec005.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/does-the-post-crisis-weakness-of-global-trade-solely-reflect-weak-demand_eco_studies-2015-5jrq9tzbwkr3
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  22 Dec 2015 Can pro-growth policies lift all boats?
Orsetta Causa, Alain de Serres, Nicolas Ruiz

In a majority of OECD countries, GDP growth over the past three decades has been associated with growing income disparities. To shed some lights on the potential sources of trade-offs between growth and equity, this paper investigates the long-run impact of structural reforms on GDP per capita and household income distribution. Pro-growth reforms can be distinguished according to whether they are found to generate an increase or a reduction in household disposable income inequality. Those that contribute to reduce inequality include the reduction in regulatory barriers to competition, trade and FDI, as well as the stepping-up in job search assistance and training programmes. Conversely, a tightening of unemployment benefits for the long-term unemployed is found to lift mean household income but to lower income among poorer households, thus raising inequality. Several other reforms have no significant impact on income distribution.

JEL Classification: 047, D37, E61
Keywords: Growth, inequality, pro-growth policies

Volume 2015 Issue 1
Click to Access: 
    http://oecd.metastore.ingenta.com/content/1315011ec004.pdf
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  • http://www.keepeek.com/Digital-Asset-Management/oecd/economics/can-pro-growth-policies-lift-all-boats_eco_studies-2015-5jrqhbb1t5jb
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