bro jaarvdew 07

Transcription

bro jaarvdew 07

ANNUAL RESEARCH REPORT 2007
In 1928, Léon H. Dupriez established the Department of Economics at the Catholic University of Leuven.
Later, in 1955, Gaston Eyskens founded the Centre for Economic Studies. Currently the full-time
academic staff of the Department includes 20 professors grouped into 7 research units: Development Economics; Econometrics; Energy, Transport and Environment; International Economics;
Monetary and Information Economics; Public Economics; and Quantitative Economic History.
This Annual Report provides a comprehensive overview of the ongoing research at the Department
and its research output in 2007. The research covers a wide range of areas in the broadly defined
field of economics. The Report is largely organized according to the above-mentioned research
units. Besides describing research interests and listing publications, this Report also gives an
overview of externally funded research projects and of the research-related activities (conferences,
workshops, seminars, PhD thesis defences) that took place in the Department in 2007.
Over the last years, the department of economics has been hiring new academics: Laurens
Cherchye, Maarten Goos, Jo Van Biesebroeck and Gerald Willmann joined our ranks. They bring
to the department fresh expertise from top graduate schools and publications in top journals.
Any publication mentioned in this Report can be obtained by contacting Karla Vander Weyden
([email protected]) or by downloading it from the author's webpage.
Working papers can be downloaded from www.econ.kuleuven.be/eng/ew/
Stef Proost
Karla Vander Weyden
Chairman
Administrative Coordinator
CHAIRMAN:
Prof. Dr. S. Proost
Staff at the Economics Department as of January 1, 2008
FACULTY
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Prof. Dr.
Filip Abraham
Erik Buyst
Laurens Cherchye
Guido De Bruyne
André Decoster
Paul De Grauwe
Hans Degryse
Hans Dewachter
Geert Dhaene
Maarten Goos
Dirk Heremans
Jozef Konings
Luc Lauwers
Stef Proost
Erik Schokkaert
Frans Spinnewyn
Johan Swinnen
Patrick Van Cayseele
Frank Verboven
Gerald Willmann
EMERITI
Prof. Em. Dr. Jean-Paul Abraham
Prof. Em. Dr. Louis Baeck
Prof. Em. Dr. Anton Barten
Prof. Em. Dr. Lode Berlage
Prof. Em. Dr. Marc Eyskens
Prof. Em. Dr. Wim Moesen
Prof. Em. Dr. Theo Peeters
Prof. Em. Dr. Karel Tavernier
Prof. Em. Dr. Herman Van der Wee
Prof. Em. Dr. Paul Van Rompuy
2
POST- DOCTORAL RESEARCHERS
Dr. Marton Csillag
Dr. Fay Dunkerley
Dr. Miet Maertens
Dr. Sandra Rousseau
Dr. Marijke Verpoorten
Dr. Bert Willems
RESEARCHERS
Xiaoqiang Cheng
Koen Decancq
Dries De Smet
Kris De Swerdt
Kristof De Witte
Stijn Ferrari
Laura Grigolon
Catherine Haeck
Romain Houssa
Leonardo Iania
Svetlana Ikonnikova
Pelin Ilbas
George Isbasoiu
Yuemei Ji
Koen Jochmans
Emilia Jurzyk
Gerd Küpper
Kristof Lowyck
Agnieska Markiewicz
Joris Morbée
Laura Nurski
Javier Olivera Angulo
Kristian Orsini
Giulia Piccillo
Eline Poelmans
Thomas Provoost
Jo Reynaerts
Pablo Rovira Kaltwasser
Catherine Schaumans
Veerle Slootmaekers
Tom Truyts
Carine Van de Voorde
Anneleen Vandeplas
Hannah Van der Deijl
Peter Van Der Hallen
Saskia van der Loo
Annelore Van Hecke
Bert Van Landeghem
Denise Van Regemorter
Dirk Verwerft
Vera Zaporozhets
George Zhang
Blanca Zuluaga
ADMINISTRATIVE
COORDINATOR
Karla Vander Weyden
PROJECT AND FINANCE
COORDINATOR
Isabelle Benoit
ADMINISTRATIVE STAFF
Heidi De Vadder
Francine Olenaed
Development Economics ________________
p. 5
Econometrics __________________________ p. 17
Energy, Transport and Environment ______ p. 27
International Economics ________________ p. 39
Monetary and Information Economics ____ p. 47
Public Economics ______________________ p. 61
Quantitative Economic History __________ p. 77
Centre for Economic Studies Seminars __ p. 84
3
4
Development Economics
5
FACULTY MEMBERS:
Jo Swinnen
Johan Swinnen is involved in research on the impact of
institutions and reforms on performance, globalization and
FDI, labour reallocation and migration, media and development, agricultural and food policy.
I Trade, FDI, standards, and poverty
EMERITI:
Louis Baeck
Lodewijk Berlage
POST-DOCTORAL RESEARCHERS:
Nathalie Francken
Miet Maertens
Marijke Verpoorten
Liesbet Vranken
RESEARCHERS:
Liesbeth Colen
Thijs Vandemoortele
Anneleen Vandeplas
Kristine Van Herck
Bert Van Landeghem
Using original research from Asia, Africa, Europe and
Latin America, Jo Swinnen reviews the recent restructuring
of the global agri-food industry and the dramatic rise of
global retail chains in developing and transition countries.
He focuses on the private standards and requirements
imposed by multinational companies investing in these
countries, and the resulting changes to existing supply chains.
He also examines the impact of these changes on local
producers, particularly poor farmers, and considers the
long-term policy implications in terms of growth and poverty.
Food and agricultural commodity value chains in developing
and transition countries have undergone tremendous
changes in the past decades. The liberalization and privatization initially caused the collapse of state-controlled vertical
coordination. More recently, private vertical coordination
systems have emerged and are growing rapidly as a
response to both consumer demand for food quality and
safety, and the farmers' production constraints caused by
factor market imperfections. Miet Maertens and Jo Swinnen
demonstrate the importance of these changes, discuss
the implications for efficiency and equity, and provide
empirical evidence on the effects in several developing and
transition countries.
The emergence and spread of private vertical coordination,
and the accompanying rapid rise in standards, strongly
affects the rural economy. Miet Maertens and Jo Swinnen
6
Development Economics 7
analyze the labor market and welfare implications of high-value
trade, with specific attention to spillover effects resulting
from linkages between the farm and non-farm rural economy.
It is often argued that the increasingly demanding food
standards imposed by high-income countries diminish
export opportunities for developing countries and lead to
an unequal distribution of the gains from trade, resulting in
the marginalization of poorer farmers and small agri-food
businesses. However, when critically reviewing the arguments,
Miet Maertens and Jo Swinnen conclude that the empirical
evidence is often weaker than claimed and that high-standards
agricultural trade can be an engine of pro-poor export-led
growth in developing countries.
The governance of food markets is a crucial element for
efficiency and distributional effects. Jo Swinnen, Anneleen
Vandeplas and Miet Maertens use a conceptual model
to show that this governance itself is endogenous in an
environment of weak contract enforcement and imperfect
markets, and importantly depends on the value in the
chain. They relate the predictions of the theory to empirical
evidence on differences in supply chain governance in
Africa across different commodity types and by doing so,
they explain why private sector governance systems with
interlinked market transactions have emerged for higher
value crops but not for staple food crops.
In addition to their papers on the general impact of increasing
food standards and its implications, Miet Maertens and
Jo Swinnen investigate how the structure of the export supply
chains in Senegal has changed in response to increasing
standards and changing coordination in global value chains,
and investigate the welfare and poverty implications. Using both
company and household survey data from the vegetable
export chain in Senegal, they are the first to quantify income,
poverty and labor market effects of such high-standards trade.
Miet Maertens and Jo Swinnen find that exports have grown
sharply despite increasing standards, contributing importantly
to rural incomes and poverty reduction. Tightening food
standards induced a shift from smallholder contract-based
farming to large-scale integrated estate production, altering
the mechanism through which poor households benefit:
through labor markets instead of product markets.
Another original empirical contribution, is the paper by Bart
Minten, Lalaina Randrianarison and Jo Swinnen, who analyze
primary data collected to measure the impact of supermarkets
on small contract farmers in Madagascar, producing
vegetables for supermarkets in Europe. In this global supply
chain, small farmers' micro-contracts are combined with
extensive farm assistance and supervision programs to fulfill
complex quality requirements and phyto-sanitary standards
of supermarkets. Small farmers that participate in these
contracts have higher welfare, more income stability and
shorter lean periods.
Bart Minten, Lalaina Randrianarison and Jo Swinnen provide
evidence of strong spillover effects of high-value agriculture
for exports on land use. Using a matched plot sampling
design, the productivity of rice in Madagascar is shown to
be two-thirds higher on fields that were contracted during
the off-season for the production of vegetables, indicating an
increase of soil fertility due to the application of fertilizer and
compost. Although agricultural output goes up significantly, labor productivity stays the same, suggesting that
there is greater labor absorption on existing land, and the
diffusion of this type of technology at a larger scale throughout
Madagascar would be expected to substantially decrease
incentives to deforest by increasing wages and to boost
productivity of existing lands relative to newly deforested ones.
Improving quality is an important element of the transfer of
production to low wage countries. Higher quality requirements are part of complex contracting arrangements in
global supply chains. Jo Swinnen and Anneleen Vandeplas
analyze how weak contract enforcement institutions
and imperfect factor markets are affecting contracting
for quality products; what the implications are for growth
and equity, and how this changes with development.
The increased consumer demand for product standards
has important implications for development. Jo Swinnen,
Jim Vercammen and Scott Rozelle develop a formal
theory of the process of the introduction of high product
standards in developing countries and identify the
implications of the emergence of high product standards.
The model endogenizes the introduction of high standards
and the choices of the actors who make up the supply
chain. Initial differences in income, the nature of capital
constraints, transaction costs, the efficiency of traditional
marketing channels, and policies and institutions are
shown to affect the likelihood of, and the speed with
which the high standards economy emerges.
Jo Swinnen and Thijs Vandemoortele present a general
political economy model of standards that they use to
derive political and social optima, and to identify under
which cases “under-standardization” or “over-standardization” result. They analyze the impact of trade and
development on the political equilibrium, as well as the
role of the media and the interaction between private
standards and public standards.
I Conflict, media, and development
Marijke Verpoorten and Lode Berlage study welfare
gains and losses in two Rwandan provinces over the
time span 1990-2000, a period characterized by civil
war and genocide. Using an economic mobility analysis,
they find that households experiencing the murder
or imprisonment of one of their members, moved
considerably downward in the income distribution.
However, households affected by other war-related
shocks and the loss of physical capital, were not worse
off in 2002 compared to other households.
The economic literature has given due attention to
household coping strategies in peacetime. In contrast,
little is known about such strategies in wartime. Marijke
Verpoorten studies the use of cattle as a buffer stock
by Rwandan households during the period 1991-2001.
It is found that the probability of selling cattle increases
upon the occurrence of both peacetime and wartime
covariant adverse income shocks. The peacetime cattle
sales are largely explained by shifts in the household
asset portfolio. In contrast, in 1994, the year of the
genocide, almost half of the cattle sales were motivated
by the need to buy food. However, the effectiveness of
this coping strategy was severely reduced due to
the wartime conditions. First, during the year of ethnic
violence, cattle prices plummeted to less than half of
their pre-genocide value. Second, households most
targeted in the violence did not sell cattle. Several
explanations for this latter finding are discussed.
Nathalie Francken, Bart Minten and Jo Swinnen investigate
the role of media and monitoring in reducing corruption.
They analyze data on personal capture of public expenditures by local officials in Madagascar, collected in a
8
budget tracking survey in 2002-2003. The survey measured
the extent to which public spending on education reached
the local schools. They compare cash flows from the central
government to 24 decentralized district facility levels, and
from these levels to 185 public primary schools. Their findings
indicate important constraints on decentralization of public
service delivery, in particular in remote areas. Corruption
can be successfully constrained through a combination of
media programs and monitoring. Intensive monitoring and
access to mass media reduce capture. However, the impact
of media is conditional on characteristics of the population.
Nathalie Francken, Bart Minten and Jo Swinnen disentangle
data on two public funding schemes and compare the nature
and transparency of cash versus in-kind flows in the education
sector in Madagascar, and analyze how this affects the
level of local corruption. Their findings illustrate that the more
transparent funding mechanisms - in the sense of easiest
to monitor - are associated with lower capture by corrupt
officials. Hence, they demonstrate that the use of transparent
funding mechanisms should be encouraged in the future.
Nathalie Francken, Bart Minten and Jo Swinnen use evidence
from cyclone relief 2004 in 250 communes to analyze the
extent to which economic, media, and political variables
determine government responsiveness. In particular, they
compare government and non-government relief after
cyclone Gafilo hit Madagascar in March 2004. Their findings
indicate that the probability of both types of assistance
was higher in areas with a higher need for intervention.
Moreover, government responsiveness was conditional on
media and political determinants. First, radio access increased
the likelihood of receiving government relief, especially in
more remote areas. Second, the probability of receiving
government relief was higher in cyclone-affected communes
with political support for the current president.
While the availability of information has increased rapidly,
the public is still considered poorly informed. Jill McCluskey
and Jo Swinnen contribute to the emerging field of media
economics by studying how the demand side of the media
market affects news production and consumption. They show
that consumers are likely to remain imperfectly informed
on most issues and that negative news coverage is likely
to dominate positive news stories because of demand
side effects.
The application of biotechnology to agriculture is highly
controversial among consumers and lawmakers across
the globe, especially in the case of genetically modified
foods (GMFs). Consumer attitudes toward GMFs are largely
negative in the developed nations. However, studies
conducted in lesser developed countries (LDCs), find that
consumer attitudes toward GMFs are in some cases positive.
Using a theoretical model of the political economy of the
media, Kynda Curtis, Jill McCluskey and Jo Swinnen argue
that the increased time cost of obtaining media information
or “stories” in LDCs, leads to lower consumption on average
of biotechnology information, especially negative information,
than that of developed countries. Additionally, ideological
influences on media firms in many LDCs leads to differing
supplies of biotechnology stories between LDCs and
developed nations. Hence, reduced consumption of
biotechnology media stories and the potential for increased
positive stories, contributes to lower risk perceptions
among consumers in LDCs.
I Reform, transition & markets
Transition countries provide a natural experiment to
study the development of land markets. Jo Swinnen
and Liesbet Vranken provide survey-evidence of the
variation in the development of land markets, identify a
series of patterns, and provide a set of hypotheses to
explain these variations in land market development.
Liesbet Vranken, Karen Macours, Nivelin Noev and
Jo Swinnen use a unique 2003 survey dataset to analyze
the developments in land use and exchange in
Bulgaria. They look at the impact of fragmentation,
abandonment and co-ownership on resource allocation
and market development.
The recent land reform in Moldova was a natural
experiment used by Bert Van Landeghem, Jo Swinnen
and Liesbet Vranken to analyze the impact of land
ownership on welfare measured by subjective well-being
(SWB) data. They find that people, regardless of the
land distribution and even given the relatively low living
standards, rate their welfare by looking at how much
other people possess. The findings of the paper have
more general implications, as it is one of the first
attempts to measure the impact of wealth, rather than
income, on SWB.
Jo Swinnen and Liesbet Vranken develop a theoretical
model of the impact of reforms on efficiency changes,
and its mechanism, during transition and use a unique
set of representative farm survey data to calculate
efficiency and to assess the relation between reforms
and efficiency changes.
10
Credit market imperfections will affect the impact of
subsidies in the new Eastern Member States of the
European Union. Pavel Ciaian and Jo Swinnen study
the effects of agricultural subsidies in the new Eastern
Member States with a partial equilibrium model which
integrates credit and land market imperfections. They show
that credit constraints have important implications for
the distribution of policy rents. Credit market imperfections
may induce very different effects of direct payments
and lump-sum transfers.
Pavel Ciaian and Jo Swinnen document and explain
the extent of policy distortions to agricultural market
incentives in Central and Eastern Europe (CEE) over
the past decades. They provide historical review of the
policy changes in the CEE and calculate indicators of
direct and indirect assistance to agriculture and of taxation
of consumers.
Much has been written about the transition process
that occurred in the former centrally planned
economies of Central and Eastern Europe and the former
Soviet Union, but interestingly, however, little is known
about how all these changes have affected welfare,
and in particular poverty, in rural areas. Karen Macours
and Jo Swinnen use new poverty data, based on
household level surveys, to analyze changes in rural
poverty and rural-urban poverty differences in 23 transition
countries of Central and Eastern Europe and the
Former Soviet Union. They present a series of
hypotheses to explain differences across countries and
changes over time.
There is much emphasis on the importance of contract
enforcement in development. However, there is only limited
evidence. Azeta Cungu, Hamish Gow, Johan Swinnen
and Liesbet Vranken use survey data on Hungarian
farms to estimate the impact of contract hold-ups on
investment. They find that investment is affected by a
variety of factors. Contract breaches under the form of
delayed payments have a non-linear effect on investment:
they do not significantly affect investment at low levels,
but they do at high levels.
Romain Houssa and Marijke Verpoorten analyze the
mobilization and allocation of domestic financial
resources in Benin. They study domestic, as well as
foreign savings, that are not debt-creating. The authors
seek to answer the following questions: Which factors
explain the low investment level in Benin? Is this outcome
due to the investment climate? Is it due to a lack of
financial resources? Why is it that domestic savings
are so low in Benin? Is there any scope for mobilizing
additional non-debt resources?
I Publications
ARTICLES IN REVIEWED
INTERNATIONAL JOURNALS
BANERJEE, A., SWINNEN, J. and WEERSINK, A.
(2007), Skating on thin ice: rule changes and team
strategies in the NHL, Canadian Journal of
Economics 40(2), p. 493-514.
CUNGU, A., GOW, H., SWINNEN, J. and VRANKEN, L.
(2007), Investment with weak contract enforcement:
evidence from Hungary during transition, European
Review of Agricultural Economics, forthcoming.
CURTIS, K.R., McCLUSKEY, J. and SWINNEN, J.
(2007), Differences in global risk perceptions of
biotechnology and the political economy of the media,
International Journal of Global Environmental Issues,
forthcoming.
FRANCKEN, N., MINTEN, B. and SWINNEN, J.
(2007), Media, monitoring and capture: evidence
from Madagascar, World Development, forthcoming.
MACOURS, K. and SWINNEN, J. (2007),
Rural-urban poverty differences in transition countries,
World Development, forthcoming.
MAERTENS, M. and SWINNEN, J. (2007), Standards
as barriers and catalysts for trade and poverty
reduction, Journal of international agricultural trade
and development 4(1).
MINTEN, B., RANDRIANARISON, L. and SWINNEN, J.
(2007), Global retail chains and poor farmers: evidence
from Madagascar, World Development, forthcoming.
MINTEN, B., RANDRAINARISON, L. and SWINNEN, J.
(2007), Spillovers from high-value export agriculture
on land use in developing countries: evidence from
Madagascar, Agricultural Economics 37(2), p. 265-275.
SWINNEN, J. (2007), European integration, reforms,
and governance of food supply chains in Eastern
Europe, Journal of International Agricultural Trade
and Development 3(1), p. 23-38.
SWINNEN, J. and MAERTENS, M. (2007),
Globalization, privatization, and vertical coordination
in food value chains in developing and transition
countries, Agricultural Economics 37(2), p. 89-102.
From public to private governance in agri-food
supply chains of transition and developing countries,
Schriften der Gesellschaft fur Wirtschafts- und
Sozialwissenschaften des Landbaues 42, p. 37-44.
SWINNEN, J. and VANDEMOORTELE, T. (2007),
The political economy of nutrition and health
standards in food markets, Review of Agricultural
Economics, forthcoming.
VERPOORTEN, M. and BERLAGE, L. (2007),
Economic mobility in rural Rwanda: a study of the
long term effects of war and genocide at the household
level, Journal of African Economies 16(3), p. 1-44.
VERPOORTEN, M., Cattle sales in war and peacetime:
a study of household coping in Rwanda, 1991-2001,
Journal of Development Economics, forthcoming.
12
ARTICLES IN OTHER REVIEWED JOURNALS
BAECK, L. (2007), Discours intellectuels sur la
mondialisation en Chine, Monde Chinois 9. Parijs:
Editions Choiseul.
BERLAGE, L. (2007), Globalization: impact and
challenges, Vikas Vani Journal 3, p. 63-78.
BOOKS
SWINNEN, J., ed. (2007), Global supply chains,
standards and the poor. CABI Publishing.
CONTRIBUTIONS TO BOOKS
HOUSSA, R. and VERPOORTEN, M. (2007),
Mobilizing domestic financial resources in Africa:
Benin case study, in UNCTAD (ed.), Domestic
Financial Resource Mobilization in Africa.
MAERTENS, M., DRIES, L., DEDEHOUANOU, F.A.
and SWINNEN, J. (2007), High-value supply chains,
food standards and rural households in developing
countries, in SWINNEN, J. (ed), Global supply
chains, standards and the poor. CABI Publishing.
MAERTENS, M. and SWINNEN, J. (2007), The fall
and rise of vertical coordination in commodity chains
in developing and transition countries, in SARRIS, A.
(ed), Governance, coordination and distribution along
the commodity value chains. FAO Publications,
forthcoming.
SWINNEN, J. (2007), Endogenous agricultural
structures and institutions: insights from transition
countries, in BULTE, E. and RUBEN, R. (eds.),
Development economics between markets and
institutions. Wageningen: Academic Publishers.
SWINNEN, J. (2007), Ten years of transition
in Central and Eastern European agriculture,
in BECKMANN, V. and HAGEDORN, K. (eds.),
Understanding agricultural transition, institutional
change and economic performance in a comparative
perspective. IAMO. Aachen: Shaker Publisher.
Global supply chains and standards: implications for
government policy and international organizations,
in SWINNEN, J. (ed.), Global supply chains,
standards and the poor. CABI Publishing.
SWINNEN, J., SADLER, M. and VANDEPLAS, A.
(2007), Contracting, competition, and rent distribution
in supply chains: theory and empirical evidence from
Central Asia, in SWINNEN, J. (ed.), Global supply
chains, standards, and the poor. CABI Publications.
PROCEEDINGS AND REPORTS OF
INTERNATIONAL CONFERENCES
KADITI, E.A. and SWINNEN, J. (2007), Consumer
demands and rural supply chains: the environmental
impacts of food consumption and production, paper
prepared as part of a series papers for the European
Conference on Future Policies for Rural Europe 2013
and Beyond - Delivering Sustainable Rural Land
Management in a Changing Europe, organized by
the Land Use Policy Group (LUPG) and the German
Federal Agency for Nature Conservation,
19-20 September, Brussels.
MAERTENS, M. and SWINNEN, J. (2007), Linking
producers to markets: the challenge of emerging
standards, summary report of USAID's RAISE SPS
Task Order, Washington D.C.
MAERTENS, M., SWINNEN, J. and VANDEPLAS, A.
(2007), Governance and surplus distribution in
commodity value chains in Africa, invited paper
for the FAO Workshop on Staple Food Trade and
Market Policy Options for Promoting Development
in Eastern and Southern Africa, 1-2 March, Rome.
VRANKEN, L., MARCOURS, K., NOEV, N. and
SWINNEN, J. (2007), Property rights imperfections,
asset allocation and welfare: co-ownership in Bulgaria,
1st Mediterranean Conference of Agro-food social
scientists: Adding value to the Agro-food supply
chain in the Future Euromediterranean Space,
23-25 April, Barcelona, Spain.
VRANKEN, L. and SWINNEN, J. (2007), Causes
of efficiency change in transition: theory and
cross-country survey evidence from agriculture,
1st Mediterranean Conference of Agro-food Social
Scientists: Adding value to the agro-food supply
chain in the future Euromediterranean Space,
23-24 April, Barcelona, Spain
RESEARCH PAPERS
CIAIAN, P. and SWINNEN, J. (2007), Distortions to
agricultural incentives in Central and Eastern Europe,
Agricultural Distortions Working Paper No. 07, World
Bank, Washington D.C.
CIAIAN, P. and SWINNEN, J. (2007), Credit market
imperfections and the distribution of policy rents:
the common agricultural policy in the New EU Member
States, LICOS Discussion Paper No. 183/07, Leuven.
McCLUSKEY, J. and SWINNEN, J. (2007), Rational
ignorance and negative news in the information
market, LICOS Discussion Paper No. 190/07, Leuven.
SWINNEN, J. and VANDEPLAS, A. (2007), Quality,
efficiency premia, and development, LICOS Discussion
Paper No. 184/07, Leuven.
SWINNEN, J. and VRANKEN, L. (2007), Patterns
of land market developments in transition, LICOS
Discussion Paper No. 179/07, Leuven.
VERPOORTEN, M. (2007), Household coping
in war- and peacetime: cattle sales in Rwanda,
1991-2001, LICOS Discussion Paper No. 189/07,
Leuven.
VRANKEN, L., MACOURS, K., NOEV, N. and
SWINNEN, J. (2007), Property rights imperfections,
asset allocation, and welfare: co-ownership in Bulgaria,
LICOS Discussion Paper No.180/7, Leuven.
I Editorial activities
Jo Swinnen:
- Associate Editor, American Journal of Agricultural
Economics
- Guest Editor, World Development
I Doctoral dissertations
NATHALIE FRANCKEN, Mass media, government
policies and economic development: evidence from
Madagascar, June 26, 2007.
SUPERVISOR: Jo Swinnen
CO-SUPERVISOR: B. Minten
DOCTORAL COMMITTEE: P. Van Cayseele,
L. Berlage, S. Dercon, B. Minten
14
I Research projects
Contract enforcement and vertical integration
in transition: theory and empirical evidence of the
agri-food sector, January 2004 - December 2007,
funded by FWO, supervised by J. Swinnen.
The aim of this research project is to improve the
knowledge of contract enforcing mechanisms by
studying the emergence and operation of private
institutions for contract reinforcement in transition
countries. First, we develop a theoretical model of
the making of contracts in the presence of imperfect
(or missing) public contract enforcing mechanisms.
Based on this model, we derive the conditions for
self-enforcing contracts and how several factors
(such as property rights and the industrial organization of markets) may affect the enforcing problem.
Institutional reforms and land market in transition
countries, October 2003 - September 2009,
funded by BOF, supervised by J. Swinnen.
Micro-economic -foundations of institutional
change, policy, and performance, November 2005
- October 2010, funded by BOF, supervised by
J. Swinnen.
LICOS Centre for Transition Economics is one of
the leading research centres worldwide in its field.
An independent evaluation by the European
Economics Association ranked LICOS in the top 3
in the world among research institutes in transition
economics and the European Commission recognized LICOS as a EU Centre of Excellence in
2000. The objective of the “excellentiefinanciering”
(EF) is to address the challenges ahead by widening
and deepening the first generation transition
research in two dimensions of innovations:
a geographic dimension and an economic modeling
dimension. First, after ten years (“the first generation”)
of economic research on transition problems in
Central and Eastern Europe and the former Soviet
Union, several problems have been addressed
and new methodologies developed and lessons
learned. These methodologies are now ready to
be applied to urgent problems elsewhere, such as
China, in developing countries, or even in the West.
Second, important new problems are emerging in
transition and similar countries, requiring a new
set of methodological innovations. These issues are
the key challenges for the next decade (“the second
generation”) of economic research on “transition” or,
more generally, on “institutional change, policy and
economic performance”.
I Seminars and workshops
The Development Economics Workshop,
co-organized by Jo Swinnen met as follows:
February 27, 2007: LU XINHAI (Huazhong, University
of Science and Technology), Landless peasants in
rural China
March 6, 2007: THIJS VANDEMOORTELE
(K.U.Leuven), Media and humanitarian aid:
empirical evidence from Belgium
May 15, 2007: GANI ALDASHEV (University
of Namur), Internationalization of NGOs and
Competition on the Market for Donations
June 26, 2007: Workshop on Institutions,
Infrastructure, and Development, speakers included
Stefan Dercon (Oxford University) and Bart Minten
(IFPRI).
June 26, 2007: Workshop on Media, the Political
Economy of Information, and Development,
speakers included Minister Bourgeois (Vlaams
Minister van Bestuurszaken, Buitenlands Beleid,
Media en Toerisme).
July 03, 2007: ALASSANDRO OLPER (University of
Milano), Patterns and determinants of international
trade costs in the food industry
October 16, 2007: KNUD JORGEN MUNK (ECRU
and Aarhus University), The optimal use of border
taxes in developing countries
October 30, 2007: LU MING (Fudan University),
Leaving the land, but not their hometown? Public
trust and labor migration in rural China
I External visiting
To gain experience in carrying out empirical studies,
Thijs Vandemoortele has been cooperating with
Dr. Miet Maertens in her research on export supply
chains of vegetables and fruit from Senegal to Europe.
In particular, he has been collecting data in Senegal
from July 1 until August 10.
June 4, 2007: Workshop on Land, Institutions,
and Development, speakers included Alessandro
Olper (University of Milano) and Tatiana Goetghebuer
(University of Namur)
Anneleen Vandeplas is leaving for a long research stay
at IFPRI, New Delhi from October 2007 until August 2008.
June 05, 2007: CATHERINE GUIRKINGER
(University of Namur), Credit constraints and
productivity in Peruvian agriculture
Bert Van Landeghem has been visiting the Economics
department at the University of Warwick from
18 September 2007 until 31 January 2008, where he
has been working under the supervision of
Prof. Andrew Oswald.
16
Econometrics
17
FACULTY MEMBERS:
Econometrics
Geert Dhaene [1]
Luc Lauwers [2]
Frans Spinnewyn [3]
Frank Verboven [4]
1
3
2
4
EMERITI:
Anton Barten
ASSOCIATE FACULTY:
Peter de Goeij
RESEARCHERS:
Rembert De Blander
Laura Grigolon
Catherine Haeck
Koen Jochmans
Catherine Schaumans
Bram Thuysbaert
Miriam Van Hoed
18
Geert Dhaene is interested in econometric theory and
applications. He studies the consequences of incorrect
model specification for commonly used methods in econometrics. His current interests also include estimation of
stochastic volatility and integrated volatility subject to
micro-market noise, bias reduction methods for panel data
models, inference on income inequality and poverty, and
experimental analysis of sequential reciprocity.
Luc Lauwers is interested in social choice theory and
in game theory. He investigates methods that aggregate
individual preferences into a social preference (or into a
social outcome). With respect to game theory, he works
with László Á. Kóczy on solution concepts of games in
characteristic function form.
Frans Spinnewyn is interested in game theory, mechanism
design and insurance theory. In game theory, he studies
the relationship between non-cooperative and cooperative
solutions for bargaining models. In mechanism design,
he studies the transmission of information between two
individuals. In insurance theory, he applies principal agent
models to social security systems.
Frank Verboven is interested in industrial organization and
applied microeconomics. His main research focuses on
empirical industrial organization to study issues in competition
policy and regulation (such as mergers, vertical restraints,
and the regulation of liberal professions). Current research
includes the estimation of oligopoly models with product
differentiation, and the estimation of game-theoretic entry
models. In other areas of applied micro-economics, he has
recently studied the impact of introducing market-oriented
measures in the higher education markets.
Econometrics 19
Anton Barten is interested in micro and macro-economic
theory. He studies consumer allocation systems, macro
accounting models, the dynamics of macro-economic
models, and policy analysis.
I Econometric theory
Geert Dhaene and Koen Jochmans calculated the
exact bias of the Gaussian profile score for autoregressive
NxT panel data with arbitrary initial conditions and arbitrary
heterogeneity in intercepts, trends, and error variances.
This is, at once, the (large N, fixed T) asymptotic bias of the
Gaussian profile pseudo-score. The bias is a polynomial
function of the estimands, and does not depend on the initial
values or the incidental parameters. Subtracting its integral
from the profile loglikelihood leads to an adjusted profile
likelihood which, in the case without incidental trends and
error variances, coincides with Lancaster's (2002) marginal
posterior density. We show, largely by simulation, that the
expected adjusted profile loglikelihood (and hence the
expected marginal posterior log-density), in addition to
attaining a local maximum on [-1, 1] at the true value of p,
may attain a global maximum at 1. The latter occurs when
the initial values are strong inliers relative to the stationary
distribution, which leads to weakly informative data when
the autoregressive parameter is moderate to large, even with
very large N.
Geert Dhaene and Yu Zhu (Fudan university) studied
robust estimation of autoregressive panel data models with
fixed effects. In this context, efficient GMM estimates are
asymptotically unbiased, but are fragile to outliers. In particular, their influence function is unbounded and their
breakdown point is equal to zero. The authors propose a
class of median-type estimates that are asymptotically
(or even exactly) unbiased and robust at once. In the simple
setting of estimating the AR(1) coefficient from stationary
Gaussian data, the estimator is (a linear transformation of)
the median of the ratios (y(i,t)-y(i,t-1))/(y(i,t-1)-y(i,t-2)).
This estimator is exactly unbiased (for any N and T) if there
is no contamination, and is asymptotically sign-robust to
independent additive outlier (AO) contamination at any rate
and regardless of the AO distribution (hence, under such
contamination the breakdown point is 1). The asymptotic
bias is always towards zero. The influence functional,
the asymptotic bias, and the maximum bias are also derived.
I Financial econometrics
Cédric de Ville de Goyet, Geert Dhaene, and Piet Sercu
investigated the martingale hypothesis for futures prices
using a nonparametric approach where it is assumed that
the expected futures returns depend (nonparametrically)
on a linear combination of predictors. They first collapse
the predictors into a single-index variable where the
weights are identified up to scale, using the average derivative
estimator proposed by Stoker (1986). Then they use the
Nadaraya-Watson kernel estimator to calculate (and visually
depict) the relation between the estimated index and the
expected futures returns. An application to four agricultural
commodity futures illustrates the technique. Out-of-sample
results indicate that for soybeans, wheat, and oats, the
estimated index contains statistically significant information
regarding the expected futures returns. Implications of this
finding for a non-infinitely risk-averse hedger are discussed.
I Industrial organization
Econometrics
Research in industrial organization focused on the
understanding of market structure and market power,
with applications to competition policy and regulation.
A first research theme looks at competition issues in
markets characterized by product differentiation. In previous
research, Frank Verboven assessed several potentially
anti-competitive effects of the selective and exclusive
distribution system, i.e. the possibility that it acts as a
softening competition device, and as a mechanism to
engage in price discrimination. In ongoing new work,
Frank Verboven extends this line of research to examine
whether the distribution system may instead work as a
foreclosure device to deter competition from new entrants,
such as Asian manufacturers. This work combines product
differentiation with entry models.
A second theme looks at the estimation of game-theoretic
entry models to draw inferences about the nature and
extent of competition. Catherine Schaumans and
Frank Verboven revised their paper on the geographic
entry restrictions on pharmacies (Establishment Act).
They conclude that pharmacies and physicians' entry
decisions are strategic complements, and that the current
Establishment Act with entry restrictions does not protect
the consumers' interests. Frank Verboven, in collaboration
with Kathleen Cleeren, Marnik Dekimpe and Katrijn
Gielens, applied a related model to study the strategic
intra-format and inter-format competition between
supermarkets and discounters.
Catherine Schaumans extended her research to assess
the phenomenon of supplier induced demand by physicians. She collected a new unique data set on physician
visits, supporting some evidence of supplier-induced
20
demand. In her most recent job-market paper she developed an entry model with incomplete information.
This has attractive features to flexibly model the strategic
interaction between general practitioners and specialists
(substitutes versus complements). She applied it to obtain
new insights in the phenomenon of gate-keeping.
Stijn Ferrari, Frank Verboven and Hans Degryse completed
a paper on investment and usage of new technologies,
applied to the Belgian shared ATM network. Their model
combines an entry (investment) model with a demand
model, applied to a unique new data set on the number
of transactions at all ATMs in Belgium in 1994. The decision
to invest in ATMs involves a trade-off between variable
transaction cost savings at branches, and the fixed costs
of setting-up the ATM network. Consumers respond to
increases in ATM density by doing more cash transactions
at ATMs instead of at the banks' branches. This implies a
variable cost saving to the banks, to be traded-off against
the extra fixed costs of investment. The paper finds that
the coordinating banks invested in too few ATMs, leading
to insufficient ATM coverage. However, more importantly,
they find that the price incentives for usage of the ATM
network were too low. Since there is no charge on costly
branch transactions, consumers use branches too often.
Most of the welfare gains to be realized come from consumers using the existing ATM network more efficiently,
rather than from expanding the ATM network.
A third theme concerns the calculation of cartel damages
incurred by direct purchasers. Previous work has
stressed that the cartel should not pay the full price overcharge as a damage payment to the direct purchasers,
but can obtain a discount because the direct purchasers
can pass-on part of the cartel overcharge to consumers.
In joint work with Theon van Dijk, Frank Verboven shows
Econometrics 21
that it is necessary to adjust the discount formula to account
for the output effect, i.e. the direct purchasers loose market
share when passing-on the cartel overcharge. The adjustment
involves only limited data requirements. The output effect is
also crucial for computing the total loss of the cartel, i.e.
the loss on both the direct purchasers and the consumers.
I Other areas applied micro-economics
Stijn Kelchtermans and Frank Verboven developed a
discrete choice model to analyze the determinants of the
participation and schooling decisions in higher education.
In their most recent paper, Kelchtermans and Verboven
extend the model to study the welfare effects of the recent
efforts by the Flemish government to promote institutions
to cut programs which are often small and duplicated at
many campuses. Their results show, somewhat surprisingly,
that the need to reduce program variety and cut fixed
costs is not that high from a welfare perspective, implying
that the governments incentive mechanism to reduce
program diversity is ineffective.
I Economic theory
Luc Lauwers and Laszlo Koczy (University of Maastricht)
showed that the minimal dominant is a non-empty coreextension. A set of outcomes for a transferable utility game
in characteristic function form is dominant if it is, with
respect to an outsider-independent dominance relation,
accessible and closed. This outsider-independent dominance
relation is restrictive in the sense that a deviating coalition
cannot determine the payoffs of those coalitions that are
not involved in the deviation. Each game generates a unique
minimal (for inclusion) dominant set.
This minimal dominant set is non-empty and returns the
coalition structure core in case this core is non-empty.
We provide an algorithm to find the minimal dominant set.
Luc Lauwers investigated the existence of a transitive,
complete, finite anonymous, and Pareto relation in the set
of infinite utility streams. He shows that, although such
relations do exist, their existence hinges on the Axiom of
Choice. In other words, such a relation cannot be constructed. In terms of set theory: the order extension axiom
entails the existence of a non-Ramsey set. Hereby, a nonRamsey set is a non-constructible object (somewhat similar to a non-measurable set).
Thomas De Muynck (RUGent) and Luc Lauwers provide a
test for the joint hypothesis that players in a noncooperative
game (allowing mixtures over pure strategies) consult an
independent preference relation and select a Nash equilibrium.
They show that it suffices to study the reaction of the
revealed collective choice upon changes in the space of
strategies available to the players. The joint hypothesis is
supported if the revealed choices satisfy an extended version
of Richter's congruence axiom together with a contractionexpansion axiom that models the noncooperative behavior.
In addition, they provide sufficient and necessary conditions
for a binary relation to have an independent ordering
extension, and for individual choices over lotteries to be
rationalizable by an independent preference relation.
I Publications
Econometrics
CHESHER, A., DHAENE, G. and VAN DIJK, T.
(2007), Guest editorial: endogeneity, instruments
and identification in Econometrics, Journal of
Econometrics 139, p.1-3.
DE VILLE DE GOYET, C., DHAENE, G. and SERCU, P.
(2007), Testing the martingale hypothesis for futures
prices: implications for hedgers, Journal
of Futures Markets, forthcoming.
RESEARCH PAPERS
DHAENE, G. and BOUCKAERT, J. (2007),
Sequential reciprocity in two-player, two-stage
games: an experimental analysis, CES Discussion
Paper Series 07.17, p. 62. Leuven.
KOCZY, L. and LAUWERS, L. (2007), The minimal
dominant set is a non-empty core-extension,
Games and Economic Behavior 61(2), p. 277-298.
FERRARI, S., VERBOVEN, F. and DEGRYSE, H.
(2007), Investment and usage of new technologies:
evidence from a shared ATM Network, CES
Discussion Paper Series 07.31, p. 44. Leuven.
SCHAUMANS, C. and VERBOVEN, F. (2007),
Entry and regulation: evidence from health care
professions, Rand Journal of Economics, forthcoming.
KELCHTERMANS, S. and VERBOVEN, F. (2007),
Reducing product diversity in higher education,
CES Discussion Paper Series 07.26, p. 32. Leuven.
THUYSBAERT, B. (2007), Inference for the measurement
of poverty in the presence of a stochastic weighting
variable, Journal of Economic Inequality, forthcoming.
VERBOVEN, F. and VAN DIJK, T. (2007), Cartel
damages claims and the passing-on defense,
VERBOVEN, F. (2007), Price discrimination: empirical
studies, in The new Palgrave: a dictionary in economics.
MacMillan, forthcoming.
VERBOVEN, F. and VAN DIJK, T. (2007), Quantification
of damages, in ABA Publications in antitrust.
22
VERBOVEN, F. (2007), Efficiency enhancing or anticompetitive vertical restraints: selective and exclusive
car distribution in Europe, forthcoming in Cases in
European competition policy: the economic analysis,
edited by Bruce Lyons. Cambridge University Press.
VERBOVEN, F., CLEEREN, K., DEKIMPE, M.
and GIELENS, K. (2007), Intra- en inter- format
competition among discounters and supermarkets.
Econometrics 23
Frank Verboven
- Editor of the Journal of Industrial Economics
- Associate Editor of the Journal of the European
Economic Association
Geert Dhaene
Journal of Econometrics, special issue on
“Endogeneity, instruments and identification”,
139 (1), p. 1-236 (July 2007)
Luc Lauwers
Editor Mathematical Social Sciences
THUYSBAERT BRAM, Econometric essays on
the measurement of poverty, April 27, 2007.
SUPERVISOR: Geert Dhaene
DOCTORAL COMMITTEE: E. Schokkaert,
A. Decoster, J.Y. Duclos, S. Firpo
I Research projects
Optimal hedge ratios for commodity price risk:
new versus old estimators, January 2004 - December
2007, funded by Research Foundation Flanders,
supervised by P. Sercu and G. Dhaene.
The purpose of the project is to (i) develop and
test a regression estimator of the variance-minimizing hedge ratio that takes into account the
special characteristics of commodity price series,
and (ii) test the unbiasedness of commodity futures.
Entry, competition and economic efficiency,
October 2003 - September 2010, funded by BOF,
supervised by H. Degryse and F. Verboven.
New industrial organization methods, with applications to automobiles and telecommunications,
January 2006 - December 2007, funded by Research
Foundation Flanders, supervised by F. Verboven.
This is an extension of an earlier project (2002-2005),
where the focus is on estimating models with
product differentiation, applied to the European
car market. The current extension includes issues
in environmental economics, and methodological
problems in estimating general discrete choice
models.
Reductie van de vertekening van niet-lineaire
dynamische panel data schatters, January 2007 December 2010, funded by Research Foundation
Flanders, supervised by G. Dhaene.
Universities and firms: a comparative analysis of the
interaction between market processes, organizational
strategies and governance, January 2007 December 2010, promotor R. Veugelers, co-promotor
F. Verboven.
I Seminars and Workshops
THE ECONOMETRIC SEMINARS
organized by Geert Dhaene, met as follows:
Econometrics
January 19, 2007: JOHANNES SPINNEWIJN (M.I.T.),
Revising and opposing in bargaining problems
April 27, 2007: SERGIO FIRPO (PUC, Rio),
Unconditional quantile regressions
THE JOINT SEMINAR ECONOMETRICS STATISTICS
co-organized by Gerda Claeskens, Christophe
Croux, Geert Dhaene, Martina Vandebroek and
Frank Verboven met as follows:
February 16, 2007: RUDY SETIONO (National
University of Singapore), Risk management and
regulatory compliance: a data mining framework
based on neural network rule extraction
February 23; 2007: DOMENICO GIANNONE
(Université Libre de Bruxelles), A quasi maximum
likelihood approach for large approximate dynamic
factor models
March 2, 2007: CHRISTIAN HAFNER
(Université Catholique de Louvain), Asymptotic
theory for multivariate GARCH models
March 9, 2007: STEFAN SPERLICH (University
of Goettingen), Semiparametric inference in mixed
models with applications in small area statistics
March 16; 2007: HAJO HOLZMANN (University of
Goettingen), Statistical inverse problems: inference
and lack of fit tests
24
March 23, 2007: HOWARD SMITH (Oxford University),
Supermarket choice with multi-stop shopping
March 30, 2007: DAVE WOODS (University of
Southampton), Designing experiments for generalized
linear models
April 20, 2007: ROLF TSCHERNIG (University of
Regensburg), Long memory and the term structure
of risk
April 24, 2007: JEROEN VERMUNT (University of
Tilburg), Multilevel variants of discrete and continuous
latent variable models: the latent gold framework
May 4, 2007: RICHARD SMITH (University of
Cambridge), Discrete choice nonresponse
May 11, 2007: DICK VAN DIJK (Erasmus University
Rotterdam), Predicting the term structure of interest
rates: incorporating parameter uncertainty, model
uncertainty and macro-economic information
THE JOINT SEMINAR ECONOMETRICS
Monetary and Information Economics, co-organized
by Geert Dhaene and Frank Verboven, met as follows:
April 30, 2007: STIJN FERRARI (K.U.Leuven),
Coordinated investment in a shared ATM network
November 23, 2007: CATHERINE SCHAUMANS
(K.U.Leuven), Distinguishing between competition
and complementarity effects in entry models:
the case of health professionals
Econometrics 25
THE JOINT ECORE-KUL ECONOMETRICS SEMINAR
May 8, 2007
GEERT RIDDER (University of Southern California):
Complementarity and aggregate implications of
assortative matching: a nonparametric analysis
PHD POSTER SESSION
MARTA BANBURA (ULB): How small is large
enough? Assessing the informational assumptions
in applied macroeconomic modeling
KRIS BOUDT (K.U.Leuven): Robust M-Estimation of
multivariate conditionally heteroscedastic time series
models with elliptical innovations
CARLOS CASTRO IRAGORRI (ULB): Confidence
sets for asset correlation
STIJN FERARRI (K.U.Leuven): Coordinated
investment in a shared ATM network
KOEN JOCHMANS (K.U.Leuven): An adjusted profile
likelihood for non-stationary panel data models with
incidental parameters
MICHELE MODUGNO (ULB): Forecasting the
term-structure of interest-rates using a large panel
of macro-economic data.
BART VERMEULEN (K.U.Leuven): Efficient designs
for conjoint choice experiments including a
no-choice option
JIE JU (K.U.Leuven): The importance of attribute
interactions in conjoint choice design and modeling
26
Econometrics
Energy, Transport and Environment
27
FACULTY MEMBERS:
Stef Proost
VISITING FACULTY:
Philippe Barla
Andre de Palma
Inge Mayeres
Bruno De Borger
Johan Eyckmans
Guido Pepermans
The research group focuses on Energy, Transport and
Environmental problems. The group specializes in the use
of modeling tools (general equilibrium, partial equilibrium)
to address pricing, regulation and investment problems. It has
developed models such as GEM-E3, MARKAL, TRENEN,
TREMOVE and MOLINO that are used for policy making at
national and EU level. Research activities are almost fully
covered by external funds. There is close cooperation with
the Engineering Faculty of the K.U.Leuven via the 'Energy
Institute' of the K.U.Leuven (www.kuleuven.be/ei) and via
the spin-off company 'Transport Mobility Leuven'
(www.tmleuven.be).
I Environmental economics
DOCTORAL RESEARCHERS:
Fay Dunkerley
Sandra Rousseau
Bert Willems
Vera Zaporozhets
SENIOR RESEARCHER:
Denise Van Regemorter
RESEARCHERS:
Thomas Blondiau
Julien Jacqmin
Joris Morbée
Bert Saveyn
Saskia Van der Loo
Eef Delhaye
Gerd Kupper
Jose Moyano
Ikonnikova Svetlana
George Zhang
VISITING RESEARCHES:
Carole Billiet
28
Bert Saveyn was financed by the Flemish Centre of
Expertise for Environmental Policy Sciences and by the
Flemish government. He successfully defended his PhD,
which deals with environmental policy in a federal state.
This includes the vertical tax interactions of federal and
regional environmental policy, the environmental instrument
choice of special interest groups in metropolitan areas, and
the NIMBY (Not-in-my-Backyard) behavior of small jurisdictions in metropolitan areas. In cooperation with Denise
Van Regemorter, he introduces the theoretical results into
a multi-regional CGE model (GEM-E3-Flanders) and
applies the model to assess the effects of the NECDirective that limits the emission of conventional air pollutants.
Sandra Rousseau continued to investigate monitoring and
enforcement aspects associated with environmental regulations. Her research was financed by the FWO project
“Economic Aspects of the enforcement of environmental
policy instruments” and the SBO project “Environmental
law enforcement: a comparison of practice in the criminal
Energy, Transport and Environment 29
and the administrative tasks”. Firstly, she studied how
firms' compliance decisions are influenced by the expected
fine for non-compliance with environmental regulations.
She measured the effect of the probability of inspection
and the size of the fine - jointly and separately - on the
compliance decisions made by textile firms in Flanders.
The results confirm the deterrence effect of increasing
inspections, but they do not support a similar finding for
monetary sanctions. The low levels of the sanctions that
courts levy, and the rapidly increasing marginal abatement
costs, imply that firms' compliance decisions are not positively
affected by the imposed penalties.
Thomas Blondiau is developing a model to investigate how
the choice of an enforcement instrument can depend on
the judges' objective functions. More specifically, he focuses
on the choice between fines (a monetary sanction) and firm
closures (a non-monetary sanction).
I Transport issues
Secondly, Sandra Rousseau has explicitly incorporated the
dynamic aspects of conservation programs with incomplete
compliance. The results show that incomplete and instrument-specific enforcement can have a significant impact
on the choice between subsidy schemes and reserves for
conservation policies. The results suggest that it is useless
to design a conservation scheme for landholders if the
regulator is not prepared to explicitly back the program
with a monitoring and enforcement policy.
Fay Dunkerley, Saskia Van der Loo and Stef Proost
continued their work co-ordinating the FUNDING consortium
and leading the research on this EC project
(www.econ.kuleuven.be/funding/). FUNDING focuses on
financing the Trans European Transport Network (TENs)
infrastructure from revenues raised on the transport sector
as a whole, in conjunction with user charges on the particular
infrastructure. The consortium uses a variety of modeling
approaches to assess a number of alternative funding
scenarios. In cooperation with Andre de Palma and Jose
Moyano, the pricing and investment model MOLINO was
extended to more general networks and can now be used
to study the financing of the TENs infrastructure investments.
Finally, Sandra Rousseau and Carole M. Billiet have developed
the structure of the database in which data on the sanctioning of environmental violations will be collected.
Moreover, in light of the future analysis of the collected
data, some preparatory research has been performed.
A literature overview of empirical studies concerning the
enforcement of environmental crime has been made.
Also, using a law & economics approach, the firms' compliance decisions are analyzed in a simple framework and
special attention is given to the factors determining the size
of the expected sanction.
Stef Proost continued his research on the economics of
transport pricing and investment in a multi-level government
context. Bruno de Borger, Fay Dunkerley and Stef Proost
compared pricing and investment in serial and parallel
transport networks where both local and transit traffic can
use the network. In both cases capacity and pricing decisions
were solved endogenously in a two-stage game. These
types of networks characterize most of the TEN investment
problems. They also worked on the impact of returns to
scale in capacity expansion and cost recovery, examining
the need for different policy approaches for road and rail.
Stef Proost worked with B. De Borger and K. Van Dender
on a related problem, studying the pricing and investment
in ports and the roads in the hinterland.
which can be used to improve traffic safety: a km tax,
a fine on speeding, regulation, a subsidy for mitigation
measures, and public investments in road infrastructure.
Finally, Stef Proost worked with B. De Borger and
E. Calthrop (EIB) on better justified cost benefit rules
for transport investments.
Eef Delhaye successfully defended her PhD on the
economics of traffic safety. She focuses on the behavior
of people - and more particularly on the choice of
speed/level of care and the number of trips they make
- as 85 percent of all accidents are mainly due to road
users' error. This behavior can be influenced by the use
of different instruments, such as traffic regulation, liability
rules, infrastructural and technical measures, education,
and sensitisation. The focus of this work lies on regulation and its enforcement, liability rules and economic
instruments, which influence the behavior of people,
and hence traffic safety.
George Zhang continued work on his PhD thesis on
pricing and investment of transport infrastructure in
China. This includes a case study of Shanghai with
2 parallel and 2 serial roads; long distance travel and
competition between rail and aviation; and a political
economy model to understand tolling practices in China.
Saskia van der Loo, Eef Delhaye and Stef Proost
worked on the EC funded GRACE research project.
Transport policies are usually implemented by different
government levels that may have conflicting objectives.
This can result in inconsistent pricing policies where
one level wants marginal cost based pricing while a
lower level may prefer much higher taxes on transit,
and may want to subsidize rather than tax certain
modes. Stef Proost and Saskia van der Loo addressed
this question by analyzing the effects of different regulations a higher level government can impose on lower
level governments considering the problem of asymmetric
information where the lower state governments know
the marginal cost with more precision.
Eef Delhaye and Stef Proost worked on a computable
general equilibrium model for GRACE which includes
the feedback effects of accidents on the behavior of
consumers and the government. The goal is to model
accident costs in a more realistic way and to compare
the relative efficiency of the following instruments,
30
Eef Delhaye, Sandra Rousseau and Stef Proost continued
work on a political economy model to analyze the choice
between inspection probability and level of the fine for
speeding. Two lobby groups are assumed, the 'vulnerable'
road users and the 'strong' road users. The respective
weights of the lobby groups influence both the level of
the expected fine, and the composition of this expected
fine when it is assumed to be fixed. The main reason
for this result is that increasing the inspection probability
is costly for society as a whole, while increasing the
fine mainly influences the car drivers.
Julien Jacqmin and Stef Proost worked on a general
equilibrium model of pricing commuting traffic (a project
funded by Research Foundation Flanders). They extended
a model formerly developed by Parry and Bento by
introducing concerns for tax deductibility, agglomeration
effects and redistribution effects. A small numerical
simulation model illustrates the theoretical work.
Stef Proost worked with Amihai Glazer (UC Irvine) on different
political economy issues, covering the relation between
road charges and investment, and the decentralization of
expenditure decisions in two level governments.
I Energy economics
Denise Van Regemorter continued to act as focal point
for the development and use of the GEM-E3 model. This is
a multi-period, multi-country general equilibrium model for
the EU that now also exists in a world version. The country
modules are linked via trade flows and environmental damage
flows. The model was further developed to integrate
endogenous biaised technical progress and the modeling
of energy technologies. This year, the World model was
used to evaluate the impact of different participation
schemes for post-Kyoto scenarios for EU DGENV.
The MARKAL/TIMES model represents the Belgian energy
sector and was used by Denise Van Regemorter to study
the cost and the technological options at the Belgian level
for stringent post Kyoto reduction targets. Denise Van
Regemorter participates in the EU project NEEDS for the
construction of an EU wide MARKAL/TIMES model with
each EU country modelled and interlinked, and with a full
integration of the external costs.
Gerd Küpper studies the interplay between resource- and
environmental economics. He compares price- and quantity
instruments to address environmental pollution, when the
polluting resource is supplied by a foreign monopoly. He also
analyzes whether such a resource monopoly renders international environmental agreements (IEAs) more stable due
to an improved bargaining position of the resource-importing
countries.
Joris Morbée and Stef Proost finalised their study of
Russia's market power on the European natural gas market.
This work started in 2006, the year in which Gazprom
sharply increased gas prices for Ukraine, Belarus, Georgia
and Moldova. The work of Joris Morbée and Stef Proost
assesses (i) to what extent Europe is vulnerable to similar
use of market power by Russia, and (ii) to what extent the
construction of strategic gas storage could help Europe to
reduce its vulnerability. The European market for imported
gas is described by differentiated Cournot competition
between Russia and other - potentially more reliable - suppliers,
in particular LNG imports. The results show that Russian
market power is limited, because demand is not completely
inelastic even in the short run. Moreover, if Russia's unreliability
increases (or if European short-run demand elasticity
decreases), Russia gives away more and more of its
expected profits to the other suppliers. For Europe, buying
gas from more reliable suppliers at a price premium turns
out to be more attractive than building storage capacity.
Meanwhile, Joris Morbée is starting new research on the
political economy of energy resources. He is analyzing the
relation between countries' fiscal regimes for hydrocarbons,
and various factors such as import/export dependency
and resource abundance.
Svetlana Ikonnikova continues her research on coalition
formations in gas supply networks with the example of the
Eurasian Gas Supply Network. The purpose is to develop
a new methodology to predict and reveal the most efficient
developments of the network in the presence of the commitment problem.
Bert Willems and Gerd Küpper studied the welfare
effects of using market mechanisms to allocate
interregional transmission capacity in recently liberalized electricity markets. They show that it might
be optimal to grant exclusive use of the transmission
line to the incumbent player, if the transmission
capacity is small and if the incumbent player can
reduce production costs by taking advantage of
interregional production cost differences.
Bert Willems is coordinating the ETE contribution to
an interdisciplinary project (IDO) at K.U.Leuven, with
the engineering divisions TME and Electa, and the law
faculty (IMER). The project will develop a simulation
model for the Belgian electricity system, and will
incorporate the most essential features of the economic, environmental, legal and technical reality.
Within this project, and together with his colleagues
of the engineering divisions and the law faculty,
Gerd Küpper is currently working on the problem of
market power in the Belgian electricity market and how
it can be reduced. In particular, they study the effect
of an increased international transmission capacity.
In cooperation with the Technical University
Dresden, Bert Willems is developing a comparison
of supply function equilibria and Cournot equilibria
with contracting. The aim of the project is to test
whether the two equilibria concepts have economically significant differences.
Joris Morbée and Bert Willems are developing a
model on the pricing of futures and options in the
electricity market using a partial equilibrium model.
They test whether vertical integration will change
forward premiums.
32
Bert Willems continued his work on long term contracts
and market power in electricity markets. He is writing
a policy paper on mitigating market power by the
regulation of contracts in which he shows that the
current regulatory process in Europe is not optimal.
Guido Pepermans continued his research on the
valuation of reliable electricity supply by households
and by Small and Medium Enterprises. The results
show that Flemish households have a larger willingness to pay to avoid power outages than those
obtained in other studies.
I Publications
CALTHROP, E., DE BORGER, B. and PROOST, S.
(2007), Externalities and partial tax reform: does it
make sense to tax road freight (but not passenger)
transport?, Journal of Regional Science, forthcoming.
DE BORGER, B., DUNKERLEY, F. and PROOST, S.
(2007), Strategic investment and pricing decisions
in a congested transport corridor, Journal of Urban
Economics.
DE BORGER, B., DUNKERLEY, F. and PROOST, S.
(2007), The interaction between tolls and capacity
investment in serial and parallel transport networks,
The Review of Network Economics, forthcoming.
MOONS, E., PROOST, S., SAVEYN, B. and HERMY, M.
(2007), Optimal location of new forests in a suburban
area, Journal of Forest Economics, forthcoming.
MOONS, E. and ROUSSEAU, S. (2007), Policy
options for afforestation in Flanders, Ecological
Economics 64(1), p. 194-203.
PEPERMANS, G. and WILLEMS, B. (2007), Network
unbundling, ownership structure and oligopolies:
A case study for the Belgian electricity market,
Competition and Regulation in Network Industries 1(2).
PERUZZI, R., POLETTI, A. and ZHANG, S. (2007),
China's views of Europe: a maturing partnership,
European foreign affairs review 12, p. 311-330.
ROUSSEAU, S. (2007), Timing of environmental
inspections: survival of the compliant, Journal of
Regulatory Economics 32(1), p. 17-36.
DELHAYE, E. (2007), The enforcement of speeding:
should fines be higher for repeated offences?,
Transportation Planning & Technology 30(4),
p. 355-375.
ROUSSEAU, S. (2007), Journal evaluation by
environmental and resource economists: a survey,
Scientometrics, forthcoming.
EGGHE, L., ROUSSEAU, R. and ROUSSEAU, S.
(2007), TOP-curves, Journal of the American Society
for Information Science and Technology 58(6),
p. 777-785.
ROUSSEAU, S. and BILLIET, C.M. (2007),
Rechtseconomische analyse van de handhavingsnood in het milieubeleid, Tijdschrift voor Economie
en Management, forthcoming.
EYCKMANS, J. and FINUS, M. (2007), Measures
to enhance the success of global climate treaties,
International Environmental Agreements: Politics,
Law and Economics 7, p. 73-97.
ROUSSEAU, S. and MOONS, E. (2007), Handleiding
voor een economische evaluatie van het milieubeleid:
toepassing op het Vlaamse bosbeleid, Tijdschrift
Voor Economie en Management 52(1), p. 95-118.
ROUSSEAU, S. and MOONS, E. (2007), The potential
of auctioning contracts for conservation policy,
European Journal of Forest Research, forthcoming.
ROUSSEAU, S. and PROOST, S. (2007), The relative
efficiency of market-based environmental policy
instruments with imperfect compliance, International
Tax and Public Finance, forthcoming.
BOOKS
DE PALMA, A., LINDSEY R. and PROOST, S. (eds.)
(2007), Investment and the use of tax and toll
revenues in the transport sector. Elsevier Science,
p 330.
PROOST, S. and ROUSSEAU, S. (2007), Inleiding
tot de milieueconomie. Leuven: Acco.
DE BORGER, B. and PROOST, S. (2007), Transport
pricing when several governments compete for
transport tax revenue, in RIETVELD, P. and
STOUGH, R. R., Institutions and sustainable
transport: Regulatory reform in advanced economies,
p. 211-230. Cheltenham: Edward Elgar.
DE PALMA, A., LINDSEY, R. and PROOST, S.
(2007), Investment and the use of tax and toll
revenues in the transport sector: The research agenda,
in DE PALMA, A., LINDSEY, R. and PROOST, S.,
Investment and the use of tax and toll revenues
in the transport sector. Elsevier Science.
34
DE PALMA, A., LINDSEY, R. and PROOST, S.
(2007), Synthesis of case study results and
prospects, in DE PALMA, A., LINDSEY, R.
and PROOST, S., Investment and the use of tax
and toll revenues in the transport sector, forthcoming.
Elsevier Science.
DE PALMA, A., LINDSEY, R., PROOST, S. and
VAN DER LOO, S. (2007), Comparing alternative pricing
and revenue use strategies with the Molino model,
in DE PALMA, A., LINDSEY, R. and PROOST, S.,
Investment and the use of tax and toll revenues in
the transport sector, forthcoming. Elsevier Science.
EYCKMANS, J. (2007), Economic evaluation of
environmental policy instruments: The case of
voluntary cooperation agreements in Flanders,
in OSTRENG, W., Consilience, interdisciplinary
communications 2005/2006, p. 104-107.
Oslo: Center for Advanced Studies.
EYCKMANS, J. (2007), International environment
agreements and the case of global warming,
in COGY, M. and STEINIGER, K., The economics
of global environmental change - International
cooperation for sustainability, p. 196-224.
Cheltenham: Edgar Elgar.
PROOST, S., DE BORGER, B. and KOSKENOJA, P.
(2007), Public finance aspects of transport charging
and investments, in DE PALMA, A., LINDSEY, R.
and PROOST, S., Investment and the use of tax
and toll revenues in the transport sector.
Elsevier Science.
PROOST, S. and VAN REGEMORTER, D. (2007),
Economie voor een klimaatminister, K.U.Leuven,
CES Leuvense Economische Standpunten, p. 13.
Leuven.
PROCEEDINGS OF CONFERENCES
MORBEE, J. and PROOST, S. (2007), Russian market
power on the EU gas market: can Gazprom do the
same as in Ukraine?, in ENERDAY, Dresden, April 2007
and in IAEE European Energy Conference, Florence,
June 2007
ROUSSEAU, S. (2007), Enforcement aspects of
conservation policies: compensation payments
versus reserves, in BIOECON conference,
Cambridge UK, September 2007.
ROUSSEAU, S. (2007), The impact of sanctions
and inspections on firms' compliance decisions,
in EAERE conference, Thessaloniki, Greece, June 2007.
RESEARCH PAPERS
DE BORGER, B., PROOST, S. and VAN DENDER, K.
(2007), Private port pricing and public investment in
port and hinterland capacity, CES Discussion Paper
Series 07.08, p. 44. Leuven.
DE JAEGER, S. and EYCKMANS, J. (2007),
Assessing the effectiveness of voluntary solid waste
reduction policies: methodology and a Flemish Case
Study, CES Discussion Paper Series 07.12, p. 37.
Leuven.
DELHAYE, E., PROOST, S. and ROUSSEAU, S.
(2007), Catching or fining speeders: a political
economy approach, CES Discussion Paper Series
07.14, p. 24. Leuven.
ROUSSEAU, S., DELHAYE, E. and PROOST, S.
(2007), Catching or fining speeders: a political
economy approach, in EALE conference,
Copenhagen, Denmark, September 2007.
GLAZER, A. and PROOST, S. (2007), The preferences of voters over road tolls and road capacity,
ROUSSEAU, S. (2007), Alternatieve financieringstechnieken voor bodemsaneringen, in Vlaams
bodemcongres, Technopolis, Mechelen,
November 2007.
KÜPPER, G. and WILLEMS, B. (2007), Arbitrage
in energy markets: competing in the incumbent's
shadow, CES Discussion Paper Series 07.30, p. 46.
Leuven.
ROUSSEAU, S. (2007), Economic empirical analysis
of sanctions for environmental violations: a literature
overview, CES Working Papers ETE WP 2007-03,
Leuven.
ROUSSEAU, S. (2007), The impact of sanctions and
inspections on firms' environmental compliance decisions,
CES Working Papers ETE WP 2007-04, Leuven.
WILLEMS, B., RUMIANTSEVA, I. and WEIGT, H.
(2007), Cournot versus supply functions: what does
the data tell us?, CES Discussion Paper Series 07.20,
p. 26. Leuven.
DELHAYE EEF, Economic analysis of traffic safety,
July 04, 2007.
SUPERVISOR: Stefan Proost
DOCTORAL COMMITTEE: E. Schokkaert,
D. Heremans, B. De Borger, E. Verhoef
SAVEYN BERT, Environmental policy in a federal
state, February 27, 2007.
SUPERVISOR: Stefan Proost
DOCTORAL COMMITTEE: J. Swinnen, A. Decoster,
B. De Borger, R. Braid
Stef Proost served on the editorial board of
Transportation Research - Part B and of the Review of
Environmental Economics and Policy and was member
of the scientific committee for the yearly conference of
European Environmental and Resource Economists.
I Research projects
Funding infrastructure: Guidelines for Europe
(FUNDING), July 2005 - December 2007, funded by
EU, coordinated by S. Proost and F. Dunkerley
In this project the emphasis is placed on optimal
charging and investment to fund new infrastructure:
a number of Trans European Network (TEN-T)
priority projects are considered as case studies.
The main project objectives are
- to develop a scientifically sound methodology
for the use of a EU transport infrastructure fund
and or mark-ups to fund investments
- to estimate the financing gap for investments
by mode and by country at horizon 2020
36
- to develop alternative scenarios for investment
infrastructure funds and mark-ups that range
between heavy reliance on a European fund and
low mark-ups and at the other extreme a small
role for the European fund and an important role
for the internal funding of investments via mark-ups
- to test the effect of different infrastructure fund
scenarios on the transport investments and
network developments in the long term using
network models as well as project level models
- to develop research in the area of pricing and
investment in transport
Generalization of Research on Accounts and cost
estimation (GRACE), July 2005 - December 2007,
funded by EU, supervised by S. Proost
The project aims to support the development of
sustainable transport systems by facilitating
implementation of transport pricing systems that
reflect the costs of infrastructure use. Its objectives
are to:
- undertake new case study research to address
gaps in the existing level of knowledge of marginal
social costs for road and rail transport
- undertake new case study research to address
gaps in the existing level of knowledge of marginal
social costs for air and water borne transport
- develop and refine the methods of using transport
accounts to monitor the implementation of
transport pricing reform in an enlarged Europe
- undertake innovative research on the issue of
the appropriate degree of complexity in transport
charges,
- provide clear guidance on the marginal social
cost of the different modes of transport in specific
circumstances and on simple and transparent
methods for determining charges
- refine the use of models to address the broad
socio-economic impacts of pricing reform
- to draw clear conclusions, and recommendations
for policy and for research in the field of transport
infrastructure costs and charges.
Interdisciplinair Onderzoeksprogramma (IDO),
2005 - 2008, funded by Bijzonder Onderzoeksfonds,
K.U.Leuven, supervised by B. Willems and S. Proost
The objective of this project is to develop a simulation
model for the Belgian electricity system, while also
taking into account the European context in which
this electricity market is functioning. The model
should incorporate the most essential features of
the economic, environmental, legal and technical
reality as well as possible, and should allow simulating the effect of changes in either of these on
the functioning of the electricity market.
Economic aspects of the enforcement of environmental policy instruments, January 2005 December 2007, funded by FWO, supervised by
S. Rousseau and S. Proost
We aim to develop a theoretical economic model
of environmental enforcement complemented
with substantial empirical support. We focus on
several aspects of enforcement.
Firstly, we seek to explain the observation that
warnings take such an important place in regulatory
practice as an enforcement instrument. At first
sight it is not clear why firms comply with environmental regulation prior to their first warning. Is it
not always more advantageous for firms to wait
until after the warning is received?
Secondly, we investigate how to realistically model
non-monetary sanctions. After all, in order to compare different penalties, it is necessary to monetary
value them. Existing models present non-monetary
sanctions as sanctions that involve social costs.
However, this does not take into account several
characteristics of non-monetary sanctions. Some
penalties, such as firm closure or imprisonment,
often automatically include the conclusion of the
violation. We will incorporate these aspects in the
comparison of different sanctioning instruments.
NEEDS, September 2004 - December 2008,
funded by EC, supervised by D. Van Regemorter
and S. Proost
The NEEDS proposal addresses Sustainable
Energy Systems and more specifically: socio-economic tools and concepts for energy strategy. Its
ultimate objective is to evaluate the full costs and
benefits of energy policies and of future energy
systems, for both individual countries and for the
enlarged EU as a whole.
Major advancements will be achieved in the three
main areas of: Life Cycle Assessment of energy
technologies; monetary valuation of externalities
from energy production, transport, coversio and
use; integration of LCA and externalities information
into policy formulation and scenario building.
FORASSET, November 2005 - October 2007,
funded by EC, supervised by D. Van Regemorter
and S. Proost
The objective of the project is to adapt economic
models for the analysis of the role of environmental
technologies, taking into account the international
dimension and the economic and environmental
regulation. To adapt economic models to assess
the impact of the diffusion of environmental technologies and competitiveness and trade. To adapt
economic models for the analysis of the impact of
different instruments of environmental policies on
the process of technological change.
Environmental law enforcement: a comparison
of practice in the criminal and the administrative
tasks, April 2007 - March 2011, funded by IWT,
supervised by S. Rousseau and S. Proost.
This research project has three strategic goals. (1)
We want to lay the foundations for the development
of a public (penal and administrative) environmental
law penalization that is internally consistent.
(2) We want to lay the foundations for the learning
process that environmental administrations will
have to complete with regard to several penalization
instruments already known by the penal court
system. (3) We want to check if there are possibilities
to optimize the way in which penalization instruments
are currently used and whether certain aspects of
current practice call for changes in the law. Basic
features of the research design are a.o. the following:
(1) The research is based on empirical data concerning penalization practice (building up of
databases); (2) The parallel between the penal and
administrative track dominates the project elaboration. We conduct the research as a twin panel,
step by step confront the regulation and practice
from the penal track with those of the administrative
track; (3) The research is multidisciplinary: law
(with internal transdisciplinarity environmental,
administrative and penal law), economics (especially
environmental economics) and Law & economics.
38
I Conferences
Second International Conference of Funding
Transport Infrastructure, September 19 -21, 2007
Bert Willems and Stef Proost organized a two day
doctoral workshop by:
Prof. YVES SMEERS (CORE) on Investment and
uncertainty in electricity markets
International Economics
39
FACULTY MEMBERS:
Filip Abraham [1
Paul De Grauwe [2]
Hans Dewachter [3]
Gerald Willmann [4]
1
2
3
4
EMERITI:
Theo Peeters
RESEARCHERS:
Romain Houssa
Leonardo Iania
Pelin Ilbas
Agnieszka Markiewicz
Pablo Rovira Kaltwasser Giulia Piccillo
Veerle Slootmaekers
VISITING PROFESSORS:
Karolien De Bruyne
Konstantijn Maes
Gunther Schnabl
40
Filip Abraham has recently studied the consequences of
the recent EU enlargement. Whereas in previous years his
research focused on trade integration and FDI, he now
pays more attention to migration and employment effects
of EU enlargement. Last year, Filip Abraham also started a
research project investigating the impact of China's rise in
the world economy on the Belgian and the EU economy.
Finally, he continues his research on "doing business" in
Europe. This includes investigating the determinants of
production and specialization within the EU.
Paul De Grauwe's research interests are focused in two
areas. The first one deals with the theory and the empirical
analysis of optimal currency areas. The second area concerns
exchange rate modeling with an emphasis on behavioral
finance models.
Hans Dewachter's research focuses on issues related to
monetary economics, finance and econometrics. In recent
research, he has been analyzing both theoretically and
empirically the interactions between the macroeconomic
dynamics and the financial markets within the framework
of rational expectations models.
Gerald Willmann's research focuses on policy aspects of
trade and European economic integration. He has recently
studied dynamic aspects of endogeneous trade policy and
the political differences between customs unions and free
trade areas, as well as the enlargement versus deepening
trade-off facing the European Union.
Hans Dewachter continued his research on macro-finance
models. The standard macro-finance models, incorporating
both macroeconomic and financial variables, are extended
by (i) introducing learning dynamics, and (ii) by using
Bayesian estimation techniques. Introducing learning
International Economics 41
allows analysis of the (contribution of) deviations from
rational expectations, while Bayesian econometrics allows
the comparison of non-nested models. It is found that
allowing for deviations from rational expectations improves
the explanatory power of the model (especially in the
macroeconomic dimension). This research has been presented
at various international conferences and seminars, including
those at the ECB, the Bundesbank and ZEW. The research
is currently summarized in the paper;
DEWACHTER, H. and LYRIO, M. (2007), Learning, macroeconomic dynamics and the term structure of interest
rates: a Bayesian approach, in ZEW Bundesbank - Conference
on Monetary Policy and Financial Markets, May 2007.
Hans Dewachter and Leonardo Iania started a new
research project in which the standard Vasicek yield curve
model is extended. In particular, the standard assumption
of normally distributed errors is replaced by the assumption
that the shocks are skew-normally distributed. It is shown
that this new class of model is still within the class of exponentially affine yield curve models. Next to being a purely
statistical extension, this new model is also economically
relevant because it allows to measure the price impact of
skewed expectations (i.e. to assess the price impact of
beliefs in extreme events occurring only very rarely).
Hans Dewachter and Leonardo Iania are currently extending
the class of macro-finance models by introducing liquidity
factors. These liquidity factors capture the 'preferred habitats'
and the liquidity preferences in certain segments of the
bond markets. Technically, the extended macro-finance
model can identify the liquidity factor by means of Kalman
Filtering. The model will be applied to measure the time
variation in the liquidity effects on the international bond
markets.
Hans Dewachter, Romain Houssa and Lasse Bork completed
their research project on dynamic factor models. This project
aims at designing a procedure that filters the factors
underlying the dynamics of a large set of macroeconomic
variables. Unlike standard dynamic factor analysis (which
is based on latent factors), this procedure filters the factors
given a number of identifying restrictions. In particular,
the procedure allows for sign and size restrictions for the
impact of the factors on (a given subset of) macroeconomic
variables. As such, the filtered factors can be given a clear
and unambiguous economic interpretation.
Hans Dewachter and Romain Houssa started their research
project on geography and monetary union. The project
aims to develop spatial econometric models in order to
analyze several impacts of monetary union. At the current
stage, they are analyzing the spatial effects of monetary policy
shocks on housing prices in the European Monetary Union.
Pelin Ilbas and Hans Dewachter have started analyzing the
effects of instability on the design of optimal monetary policy
when private agents show adaptive learning behavior.
Agents are assumed to learn on the infinite horizon, in a
model characterized by nominal and real rigidities. One of
the aspects to be analyzed in this project will be the effects
of a (change in) monetary policy strategy of the central
bank on the stability of the economy.
Pelin Ilbas continued her research on optimal monetary
policies in dynamic stochastic general equilibrium models.
Her focus has moved in the direction of the effects of
uncertainty on welfare and the robustness of alternative
optimal monetary policy rules.
Paul De Grauwe and Pablo Rovira Kaltwasser analyzed
how the existence of divergent beliefs about the underlying
fundamental value of a currency, affect the dynamics of
the exchange rate in a theoretical framework. They find
that a divergence of beliefs creates the potential for
waves of optimism and pessimism that alternate in an
unpredictable way. These waves are disconnected from
the underlying (objective) fundamental value. In such a
world bubbles exist, and their timing and length are
unpredictable.
In cooperation with Christian Bauer (University of
Bayreuth) and Stefan Reitz (Deutsche Bundesbank),
Paul De Grauwe developed a simple behavioral model
of the exchange market with chartists and fundamentalists, and analyzed their trading behavior in a floating
regime and in a target zone regime. Regarding the
floating regime, the model replicates the well-known
stylized facts like excessive volatility, fat tails, volatility
clustering and the exchange rate disconnect. When introducing a credible target zone, the exchange rate
remains in the center of the band for a considerably
long period. The resulting hump-shaped distribution of
the exchange rate greatly reduces the frequency of
central bank intervention. The introduction of a target
zone regime significantly reduces exchange rate volatility
by decreasing speculative activity in the FX market.
Together with Cláudia Costa Storti (European Monitoring
Centre for Drugs and Drug Addiction), Paul De Grauwe
studied the mechanisms underlying the dramatic
decline of the retail prices of major drugs like cocaine
and heroin during the last two decades. They formulate
the hypothesis that the major driving force behind the
price decline is a reduction of the intermediation margin
(the difference between the retail and producer prices),
42
which was influenced by globalization. This phenomenon
might have a strong impact on the effectiveness of drug
policies, increasing the relative effectiveness of policies
aiming at reducing the demand of drugs.
Agnieszka Markiewicz analyzed exchange rates volatilities.
In particular, she proposed an explanation for shifts in
the volatility of exchange rate returns. She showed
how uncertainty about the exchange rate model may
lead private agents to focus excessively on only a subset
of fundamental variables. As a result, exchange rate
volatility is mainly determined by the dynamics of this
subset of fundamentals. She empirically investigated
the relevance of this result within the Taylor-rule based
model applied to the British Pound/US Dollar
exchange rate. Her results suggest that the agents
focus on a new set of fundamentals after the Bank of
England introduced an inflation targeting strategy.
Reduced uncertainty about interest rates implied by
inflation targeting strategy made the interest rate a
more useful variable for predicting the exchange rate
movements. As a result, in addition to the price differential
variable, agents focus on the interest rate differential.
Econometric analysis suggested that this shift of the
model triggered a substantial instantaneous decrease
in the volatility of exchange rate returns. Accordingly,
she observed a shift from a high to a low volatility
exchange rate regime.
Romain Houssa completed the last paper of his doctoral
dissertation. The goal of the paper was to provide an
international comparison of the welfare effects of consumption fluctuations. In order to do so he proposed
a Bayesian method for estimating the distribution of
the welfare cost of volatility in consumption whereas
the literature has produced merely point estimates.
In line with the literature he interpreted the cost of volatility as
the benefit from stabilization. Moreover, he compared the
welfare gain from stabilization with the welfare gain from
growth. An application to data on 82 countries indicates
that it is impossible to choose between stabilization, and
growth in 45 percent of countries including both developed
and developing nations. The finding of indecisiveness
between stabilization and growth is new to the literature.
Giulia Piccillo has done research on the relationship
between exchange rates and the asset market. She focused
on two fronts. The first one was aimed at the choice of a
theoretical structure. Several theories have been under study.
At first, a pure DSGE approach from the New Open
Economy Macroeconomics literature was considered, with
the introduction of portfolio-type assumptions. Secondly some
financial theories have been under study. Finally a partial
equilibrium model of the type Hau - Rey (2006) has been
chosen, that models exchange rates from an (equity) order
flows point of view. The second front focused on timedependent models, with a particular emphasis on Markov
Switching Models. As a result a MSM has been used to
estimate a time dependent dynamics of exchange rates
and asset prices based on an equity-trade induced order
flow theory. This paper is now almost complete.
Veerle Slootmaekers focused on issues related to the market
structure and institutions in transition countries, for which
she works with firm-level data. In a joint project with Filip
Abraham and Joep Konings, she investigated the direct
and indirect effects of foreign direct investment on productivity
of Chinese firms. In a second project, she examined
together with Marialuz Moreno Badia, the importance of
financial constraints on investment spending and the implications for firm productivity in Estonia.
I Publications
DEWACHTER, H. and SMEDTS, K. (2007), Limits
to international arbitrage: an empirical evaluation,
International Journal of Finance & Economics 12,
p. 273-285.
DE GRAUWE, P. and VANSTEENKISTE, I. (2007),
Exchange rates and fundamentals: a non-linear
relationship?, International Journal of Finance
and Economics 12, p. 37-54.
DE GRAUWE, P. (2007), Quo Vadis Europe?
Fortress or land of opportunities, Quarterly
Economic Bulletin, p. 21-36, August.
DE GRAUWE, P. and COSTA STORTI, C. (2007),
Globalization and the price decline of illicit drugs,
International Journal of Drug Policy.
HOUSSA, R. (2008), Monetary union in West
Africa and asymmetric shocks: a dynamic
structural factor model, Journal of Development
Economics 85, p. 319-347.
LEWIS, V. (2007), Productivity and the real
euro-dollar exchange rate, Weltwirtschaftliches
Archiv-Review of World Economics, forthcoming.
BOOKS
DE GRAUWE, P. (2007), Economics of Monetary
Union, 7th edition, 281pp. Oxford University Press.
DE GRAUWE, P. (2007), De onvoltooide globalisering,
verkenning van een nieuwe wereld, 238 pp. Lannoo
en Nieuw Amsterdam.
ABRAHAM, F. (2007), The four freedoms in the
European Union: free at last? in Liber Amicorum
Frans Vanistendael, p 1-6.
ABRAHAM, F., GOOS, M. and KONINGS, J. (2007),
De concurrentiepositie van België: zin of onzin van
de loonnorm?, CES Leuvense Economische
Standpunten, p. 16. Leuven
DE GRAUWE, P. (2007), Beloften en realisaties
van de paarse coalitiepartners, CES Leuvense
Economische Standpunten, p. 13. Leuven.
DE GRAUWE, P. (2007), Preconditions for a
successful euro adoption, in BASCI, TOGAN
and VON HAGEN (eds.), Macroeconomic policies
for EU accession. Cheltenham: Edward Elgar.
44
VAN ASSCHE, A., HONG, C. and SLOOTMAEKERS,
V. (2008), China's international competitiveness:
reassessing the evidence, forthcoming in AUBERT,
B. (ed.), Délocalisation, fondements et analyzes
(tentative title). CIRANO, Montréal.
PROCEEDINGS OF CONFERENCES
DEWACHTER, H. and LYRIO, M. (2007), Learning,
macroeconomic dynamics and the term structure
of interest rates: a Bayesion approach, in ZEW
Bundesbank - Conference on Monetary Policy
and Financial Markets, May 2007.
DE GRAUWE, P. (2007), The challenge of enlargement,
SUERF Annual Lecture 2007, The European Money
and Finance Forum, Vienna, 2007.
DE GRAUWE, P. und COSTA STORTI, C. (2007),
Monetäre Politik und reale Ökonomie, in
SCHETTKAT, R. and LANGKAU, J. (Hg.),
Aufschwung für Deutschland, Dietz, Bonn.
RESEARCH PAPERS
ABRAHAM, F., KONINGS, J. and SLOOTMAEKERS, V.
(2007), FDI spillovers in the Chinese manufacturing
sector: evidence of firm heterogeneity, CEPR
Working Paper no 6573, November 2007.
DE GRAUWE, P. (2007), European Monetary Union:
a project of promise and risk, in COTTRELL, P.,
NOTARAS, G., TORTELLA, G., (eds.), From
the Athenian Tetradrachm to the Euro. Ashgate,
Aldershot.
BLANCHARD, E. and WILLMANN, G. (2007), Political
stasis or protectionist rut? Policy mechanisms for trade
reform in a democracy, CESifo Working Paper 2070.
DEWACHTER, H. and LYRIO, M. (2007), Learning,
macroeconomic dynamics and the term structure
of interest rates, in CAMPBELL, J., Asset pricing
and monetary policy. Cambridge: NBER.
DE GRAUWE, P. and ROVIRA KALTWASSER, P.
(2007), Modeling optimism and pessimism in the
Foreign Exchange Market, CESifo Working Paper
no. 1962, April.
DE GRAUWE, P., BAUER, C. and REITZ, S. (2007),
Exchange rates dynamics in a target zone- a
heterogeneous expectations approach,
CESifo Paper no. 2080, August.
DE GRAUWE, P. (2007), The scientific foundations of
the DSGE-Models, (mimeo) European Central Bank,
December.
FACCHINI, G., OLARREAGA, M., DA SILVA, P.
and WILLMANN, G. (2007), Substitutability and
protectionism: Latin America's trade policy and
imports form China and India, CES Discussion
Paper Series 07.13.
MARCO LYRIO, Modeling the yield curve with
macro factors, November 2, 2007.
SUPERVISOR: Hans Dewachter
CO-SUPERVISOR: Paul De Grauwe
DOCTORAL COMMITTEE: P. Sercu, G. Dhaene,
O. Tristani
I Research projects
Monetary policy and the stabilization of financial
market expectations, January 2004 - December
2007, funded by FWO, supervised by H. Dewachter
The project analyzes the role of expectations in the
dynamics of financial market returns. More specifically,
we allow for learning in the expectation formation,
which gives rise to a second type of dynamics
originating from the learning process. Next, to analyze
the implications of learning dynamics of financial
markets, we also look at the scope of stabilization
of the learning dynamics by an appropriate monetary
policy rule.
The foreign exchange market in a behavioral
framework, January 2006 - December 2009, funded
by FWO, supervised by P. De Grauwe
Too many anomalies in the FX markets have been
detected to maintain the efficient market model as
a vehicle to think about its functioning. Our ambition
is to further develop the theory and the empirics of
the foreign exchange market using the behavioral
finance framework. We model the exchange market,
assuming that agents follow simple rules using
incomplete information. The fitness of the rule is tested
continuously, allowing agents to switch to a different
rule. We will introduce more than two agents. This will
lead to models with diversity of opinions about
what drives the exchange rate. We will analyze the
effect this diversity has on the dynamics of the
exchange rate. In addition, we plan to study its implications for the effectiveness of interventions in the
foreign exchange markets. Finally, we will test this
model empirically on data of the euro/dollar, the
sterling/dollar and other major currencies.
Regionale effecten van monetaire unificatie:
speelt geografie een rol: January 2007 - December
2010, funded by FWO, supervised by H. Dewachter
I Conferences
Paul De Grauwe organized the CESifo area
Conference on Macro, Money and International
Finance, in Munich on 23-24 February.
Paul De Grauwe organized a Workshop on the
“Many Dimensions of Competitiveness” at the Venice
Summer Institute, in Venice, 20-21 July.
September 26, 2007: LARS JONUNG (DG ECFIN),
The Euro - what's in it for me? An economic analysis
of the Swedish euro referendum of 2003
December 17, 2007: AGNIESZKA MARKIEWICZ
(CES, K.U.Leuven): Monetary Policy, model uncertainty
and exchange rate volatility
I External visiting
Together with Robert Kohlmann (ULB) and
Raf Wouters (National Bank of Belgium),
Paul De Grauwe and Hans Dewachter organized
the CEPR Conference on International Adjustment,
National Bank of Belgium, Brussels, November 9-10.
The International Economics Workshop,
co-organized by Paul De Grauwe, Filip Abraham
and Hans Dewachter, met as follows:
January 25, 2007: GERALD WILLMANN (CES,
K.U.Leuven), Why legislators are protectionists:
the role of majoritan voting in setting tariffs
May 15, 2007: ROBERT KOLLMANN (ECARES),
International portfolios with demand and supply
shocks
July 4, 2007: MICHAEL BORDO (Rutgers University),
Monetary policy and stock market booms and busts
in the 20th century
September 19, 2007: WILLIAM BRANCH
(University of California, Irvine), Asset return
dynamics and learning
46
Filip Abraham was a Visiting Professor
and International Research Fellow of the Kiel Institute
for the World Economy.
Paul De Grauwe was a visiting professor at the
University of Genoa in April 2007. He also taught at
the Università Cattolica del Sacro Cuore of Milan in
May 2007. From 1 October to 31 December he visited
the European Central Bank in Frankfurt as
Wim Duisenberg Fellow.
Veerle Slootmaekers completed a Summer Internship
at the International Monetary Fund, July October 2007 Washington DC.
Veerle Slootmaekers was a Visiting Researcher
at Peking University (China Center for Economic
Research), Beijing, China, April - June 2007.
Monetary and
Information Economics
47
FACULTY MEMBERS:
Monetary and Information Economics
Hans Degryse [1]
Maarten Goos [2]
Dirk Heremans [3]
1
2
4
5
Jozef Konings [4]
Patrick Van Cayseele [5]
3
48
Hans Degryse's research focuses on issues in banking
competition, market microstructure, and monetary economics. His research in banking covers both theoretical
and empirical banking. In particular, he covers issues
of entry barriers and banking competition, and bank-firm
relationships. His research on market microstructure
concentrates on competition between different types of
markets, both theoretically and empirically. His work in
the field of monetary economics mainly focuses on the
pass-through of monetary policy rates to bank-retail rates.
Maarten Goos is currently examining the quantitative and
qualitative changes in the job structure of OECD countries,
the labor market impact of technological change, the employment impact of employer subsidies and product market
regulation, foundations of real and nominal wage rigidities,
and the nature of product and labor market imperfections.
EMERITI:
Jean-Paul Abraham
Karel Tavernier
RESEARCHERS:
Xiaoqiang Cheng
Jan De Loecker
Stijn Ferrari
Emilia Jurzyk
Laura Nurski
Jo Reynaerts
Catherine Schaumans
Annelore Van Hecke
Stijn Vanormelingen
The monetary and information economics research
group has developed a tradition in studying the functioning
of financial, product and labor markets in their macroeconomic, microeconomic and institutional aspects for both
developed and emerging economies.
Italo Colantone
Dries De Smet
George Isbasoiu
Aysegul Kayaoglu
Thomas Provoost
Anna Salomons
Mark Van Achter
Christophe Wuyts
Dirk Heremans specializes in monetary economics and in
the economic analysis of law. His recent research focuses
on law and finance. More specifically, it covers issues of
financial stability and financial regulation within the rapidly
changing financial landscape characterized by consolidation
into financial conglomerates and by the realisation of the
single financial market in Europe.
Monetary and Information Economics 49
Jozef Konings' current research interests focus on the
micro-econometric analysis of globalization, firm performance
and labour market dynamics in emerging markets.
His recent research has analyzed the entry and exit
process of firms and its implications on job creation and
destruction in transition countries and the effects of trade
liberalization on market power and firm performance in the
emerging economies of Asia and Central and Eastern
Europe.
Patrick Van Cayseele's research is on the economics of
industrial organization and financial intermediation. More
specifically, his research interests include the economics of
antitrust and competition policy, innovation and the
dynamics of firm growth, as well as game theory applied to
cartel profit sharing. His recent research analyzes the implications of bank mergers on loan rates and liquidity, payment
mechanisms, value safekeeping and two-sided markets
(platform competition).
I Banking and banking competition
Using a combination of propensity score matching and
difference-in-difference techniques, Emilia Jurzyk and
Olena Havrylchyk (CEPII) investigate whether the performance
of banks in Central and Eastern Europe changed after they
have been taken over by foreign investors. They study factors
that determine entry decisions of foreign banks and, controlling for this selection bias, use a new methodology to
investigate the impact of foreign bank ownership on profits,
net interest margin, loan loss reserves, overhead costs,
and loan growth of takeover banks.
Emilia Jurzyk, Hans Degryse (Tilburg University and
K.U.Leuven), Olena Havrylchyk (CEPII), and Sylwester Kozak
(National Bank of Poland) study the effects of bank ownership
on the price and amount of credit offered by banks to
borrowers, characterized by varying degree of informational
asymmetry. Using Polish banking data, they examine factors
influencing levels of interest rates granted by four different
types of banks (i.e. foreign greenfield and domestic banks,
and domestic private and public banks) to five groups of
customers (large private firms, large public firms, small
entrepreneurs, individuals and farmers).
Hans Degryse and Steven Ongena (Tilburg University)
have examined the impact of interbank competition on
bank orientation. The research question addressed is
whether competition between banks and bank-firm relationships are inimical. They find that greater competition
between banks spurs bank-firm relationship formation.
Together with Gregory Nguyen (National Bank of Belgium),
Hans Degryse investigated how interbank markets may
potentially lead to contagion risk. They find that contagion
risk has decreased over time but may stem more from
cross-border exposures. Geraldo Cerqueiro (Tilburg
University and Federal Reserve Board), Hans Degryse and
Steven Ongena studied the importance of discretion in
loan rate setting. They find that loan rates are more dispersed
for older firms, firms with shorter relationships and more
risky firms.
I Competition between trading
systems
Hans Degryse, Mark Van Achter (University of
Bonn) and Gunther Wuyts continued the analysis of
investors choosing between trading systems. They find
that systematic patterns in order flow in one trading
system may result from imbalances in the other trading
system.
I Competition policy
Jan De Loecker, Jozef Konings and Patrick Van
Cayseele develop a methodological framework for
quantifying the impact of merger control regulations.
While most countries have different criteria in terms of
sales, market shares or combinations of the above,
and while listing an inventory of these criteria is easy,
such an exercise does not provide an answer regarding
their impact on the market for corporate control.
A methodology is developed to compare empirically
the percentage of firms affected in an industry in a country,
by the “clearing in advance” regulation. By comparing
industries and countries, we are able to provide an
indication of the impact of merger regulations for a
large number of industries in Europe. As such, we provide
a first indication of the tightness of ex ante merger review.
Guidelines only bear a slight link to the economic
determinants of the advantages that an infringement
produces. As a result, they introduce distortions, in the
sense that some offenders are dealt with more severely
than others. It is therefore not possible to translate
stricter enforcement into more effective enforcement.
While serious offenders may still escape with a relatively
favorable fine, there is now a risk that “overkill” will be
created in other cases.
The convergence (or lack thereof) between the economic
principles underlying the imposition of fines and the
intentions displayed by the European Commission in
its new directives, is discussed by Patrick Van Cayseele.
Considered too lax in the past, the fining policy is now
deemed much more severe. Unfortunately, the directives
bear little, if any, relation with the economic determinants
of the advantages emanating from an infringement.
As such, the guidelines produce distortions to the
extent that some perpetrators are sanctioned more
heavily than others, excluding the translation of “more
severe” to “more effective”. The possibility remains that
serious offenders are off the hook with a relatively favorable
fine, creating “overkill” in other cases. Even worse, is the
fact that the Commission in pursuing the truth is sensitive
only to higher fines.
I Credit markets
Patrick Van Cayseele, Peter Camesasca and Kristof
Hugmark test the economic principles that play a role
in imposing fines against the intentions put forward by
the EC Commission in the new 2006 Fine Guidelines.
Whereas a number of economists in the past adopted
the opinion that cartel enforcement policy was too lax
in Europe, it is now much stricter. The 2006 Fine
50
Hans Degryse and Xiaoqiang Cheng study the
effects of informational barriers on consumer finance
rationing, and the impact of internally produced and
externally shared information on these informational
barriers. They find that informational barriers have both
a statistically and economically significant impact on
credit rationing. Internally produced information per se cannot
alleviate such barriers. While information sharing weakens
the value of internally produced information, it reduces information asymmetries and promotes lending.
I European settlement and depository
services industry
Patrick Van Cayseele and Christophe Wuyts examine
whether the European settlement and custody institutions
operate in an efficient way. To do this, they start from an
analytically founded discussion regarding the activities
performed by the operators in this sector. Based on the
insights obtained, they estimate both a translog cost function
and a constant elasticity of substitution - quadratic cost
function. From the results obtained, there are clearly economies
of scale in this industry. Moreover, also economies of
scope between the activities performed are present. These
findings imply that probably further consolidation is ahead,
and that separating certain activities from others can only
be done at a cost in terms of efficiency.
I Entry behavior in local markets
Economists have long been occupied with understanding entry and market structure, and how they are
related with competition, market power and economic efficiency. Recently, empirical research has begun to address
issues of entry based on structural econometric models.
The advantage of this emerging literature is that it
becomes possible, under suitable identification assumptions
and based on limited data, to distinguish between two
broad determinants of entry and market structure: nonstrategic technological and demand factors and strategic
factors (intensity of competition).
These models are being applied in different sectors to
address remaining policy issues. Stijn Ferrari, Frank
Verboven and Hans Degryse consider investment (entry)
and usage in a shared ATM network. They find that banks
substantially underinvested in the shared ATM network and
that consumer usage of the available ATM network is too
low. A direct promotion of investment (through subsidies or
other means) can improve welfare, but the introduction of
retail fees on cash withdrawals at branches would be more
effective, even if this does not encourage investment per se.
I Financial regulation and Corporate
Governance
Dirk Hermans updated previous work in a survey paper on
regulation of banking and financial markets. It incorporates the
role of corporate governance for financial institutions as a
necessary complement to financial regulation. Also, the new
regulatory and supervisory challenges raised by the increasing
importance of OTC derivatives and securitization of loans
creating an upheaval in the financial landscape are addressed.
Financial globalization raises major issues for market discipline,
requiring also a new approach to regulatory governance.
In a paper by Frank Verboven and Catherine Schaumans,
the conduct in health care markets is analyzed and the
methodology is extended to allow for entry restrictions.
The authors conclude that the current establishment act in
pharmacy markets, which limits the number of pharmacy
entrants per municipality, is not in the public interest.
I Globalization and firm
I Labor economics
performance
Using Indonesian manufacturing census data,
Mary Amiti and Joep Konings estimate the effects
of trade liberalization on plant productivity. The productivity gains that arise from reducing tariffs on
final goods are disentangled from those that arise
from reducing tariffs on intermediate inputs. Lower
output tariffs can produce productivity gains by
inducing tougher import competition, whereas
cheaper imported inputs can raise productivity via
learning, variety, and quality effects. It is shown that
a 10 percentage point fall in input tariffs leads to a
productivity gain of 12 percent for firms that import
their inputs, at least twice as high as any gains
from reducing output tariffs.
Joep Konings and Hylke Vandenbussche test
whether Antidumping (AD) protection affects the
market power of import competing domestic firms,
using panel data of about 4000 EU producers that
were involved in AD cases, to estimate mark-ups
before and after the filing of a case. It is found that
AD protection has positive and significant effects
on domestic mark-ups, except in cases where
import diversion after protection is strong, like in
'seamless steel tubes'. A randomly drawn control
group of firms not subject to AD policy did not have
rising mark-ups during the same period.
52
Marc De Vos and Joep Konings give a critical overview of
the main problems facing the Belgian labor market. They
emphasize the need to end all types of labor market discrimination, increase labor market participation, implement policies
to cope with an ageing population and to control the overall
wage evolution.
Abraham, Goos and Konings ask whether imposing a
maximum rate of wage growth, as currently in Belgium,
is successful in preserving the country's international
competitiveness. The authors find that the current system
is useful, but suggest some important changes.
Filip Abraham, Joep Konings and Stijn Vanormelingen estimate
price-cost margins and union bargaining power for Belgian
manufacturing firms. They find evidence that union bargaining
power increases with the profit margin in the sector.
Moreover, globalization places a downward pressure on
both bargaining power and price-cost margins.
In a recent study, Maarten Goos and Joep Konings examine the
significance of payroll tax subsidies on employment and
wages. Despite the substantial experience of advanced
nations with payroll tax subsidies, the lack of formal evaluation
evidence leaves much uncertainty concerning the likely
impacts of such policies. Therefore, their work makes use of a
unique panel of firm level data and a natural experiment to
analyze the incidence of wage subsidies on employment and
wages in Belgium. Using a number of evaluation estimators,
they find that wage subsidies increased employment and pretax wages of subsidized workers without any evidence of
adverse effects on non-subsidized workers. These insights can
provide some guidance towards policies aimed at improving the
employment and income prospects of disadvantaged workers.
Maarten Goos examines the economic significance of
restricted shop opening times. There is a small but growing,
amount of literature related to the idea that product market
regulation affects employment. This paper argues that also
shop closing hours can affect the level and composition of
employment in retail industries. First, this paper exploits
recent changes in Sunday Closing Laws in the US to find
that total employment, total revenue and the number of
shops increase in deregulating industries, and possibly
decrease in non-deregulating industries without much
evidence for an impact on wages or prices. Second, building
on what we know about retail markets, a model is presented
to show how consumer behavior and retail competition
can explain the observed impact of deregulation on retail
labor and product markets and therefore, ultimately,
employment.
Maarten Goos and Anna Salomons aim to make a contribution
to the literature on the gender wage gap by developing a
simple network model where one's wage is determined by
the number and quality of one's network ties. Since
employers cannot perfectly observe worker ability, and
given that there are inbreeding biases by gender and by
ability, they are willing to pay a wage premium for hiring the
network ties of a well-connected high-ability incumbent
worker. In equilibrium, women are paid a lower wage
because they have fewer network ties, even if ability is
equally distributed among women and men. The model is
validated empirically using UK data; it is found that there is
indeed a wage premium for workers who are hired through
referral, and that this premium is higher for men than for
women.
Alan Manning, Maarten Goos and Anna Salomons are
documenting employment structure changes in 15 European
Union countries. For the US and the UK, evidence of
polarization, where both high- and low-skill jobs increase
their relative share of employment at the expense of the middling jobs, has been found. However, the analysis had not
yet been performed at the European level. In addition to
documenting changes in the European employment structure,
the authors try to estimate to what extent these changes
are due to technological change, out-sourcing, and trade,
respectively.
I Two-sided markets
Patrick Van Cayseele and Jo Reynaerts study pricing
decisions in two-sided markets when two or more platforms
are needed simultaneously for the successful completion
of a transaction. The model is a natural extension of the
Cournot-Ellet theory of complementary monopoly featuring
clear cut asymmetric single- and multihoming patterns
across the market. The results indicate that the so-called
anticommons problem generalizes to two-sided markets.
Allocative inefficiencies arise as individual platforms fail to
internalize the negative pricing externality they exert on the
other platforms. As a result, mergers between such platforms
then may be welfare enhancing, but involve a redistribution
of surplus from one side of the market to the other. On the
other hand, the limit of an atomistic allocation of property
rights is not monopoly pricing, indicating that there also
exist differences with the received theory of complementarity.
The Belgian newspaper industry is analyzed from a two-sided
markets perspective by Patrick Van Cayseele and Stijn
Vanormelingen. They build up a specific structural model
to assess market power and the degree of competition in
the newspaper market.
I Publications
Patrick Van Cayseele and Dries De Smet examine
the existence of network effects in the market for
Yellow Pages. Based on a panel of data from a
number of European countries, they apply the structural model of Rysman (2004). Their results partially
confirm the two-sidedness of the Yellow Pages
market, as argued by the seminal paper of Rochet
and Tirole (2003). Advertisers value users and vice
versa. This possibly explains the high concentration
in the market. These findings contrast with more
traditional media markets where readers seem to
dislike advertisements.
I Fiscal federalism and
decentralization
Koen Algoed, Dirk Heremans and Theo Peeters
made a critical analysis of the financing of the
Communities and Regions in the devolution
process in Belgium. The successive financial
arrangements involve serious vertical and horizontal
imbalances, contributing to the dysfunctioning of
the Belgian Federal State. Using the insights of the
new political economy approach of fiscal federalism,
recommendations are made to give priority top
more financial and fiscal responsibility in the introduction of future state reform.
ABRAHAM, F., KONINGS, J. and VANORMELINGEN, S.
(2007), The effect of globalization on union bargaining
and price-cost margins of firms, Review of World
Economics, forthcoming
AMITI, M. and KONINGS, J. (2007), Trade liberalization,
intermediate inputs and productivity: Evidence from
Indonesia, American Economic Review 97(5),
p. 1611-38.
DEGRYSE, H. and ONGENA, S. (2007), The impact
of competition on bank orientation, Journal of
Financial Intermediation 16, p. 399-424.
DEGRYSE, H. and NGUYEN, G. (2007), Interbank
exposures: an empirical examination of contagion
risk in the Belgian banking system, International
Journal of Central Banking 3, p. 123-172.
DE LOECKER, J., KONINGS, J. and VAN
CAYSEELE, P. (2007), Merger review: how much of
industry is affected in an international perspective?,
Journal of Industry, Competition and Trade,
forthcoming.
GOOS, M. and MANNING, A. (2007), Lousy and
lovely jobs: The rising polarization of work in Britain,
The Review of Economics and Statistics 89(1),
p. 118-133.
54
VAN CAYSEELE, P. and WUYTS, C. (2007), Cost
efficiency in the European securities settlement and
depository industry, Journal of Banking and Finance
31(10), p. 3058-3079.
VAN CAYSEELE, P., CAMESASCA, P. and
HUGMARK, K. (2007), The EC Commission's 2006
fine guidelines reviewed from an economic perspective:
risking over-deterrence, The Antitrust Bulletin,
forthcoming.
ABRAHAM, F., GOOS, M. and KONINGS, J. (2007),
De concurrentiepositie van België: zin of onzin van
de loonnorm, CES Leuvense Economische
Standpunten, 2007/116, Leuven.
ALGOED, K., HEREMANS, D. and PEETERS, T.
(2007), Voorrang geven aan meer financieel-fiscale
verantwoordelijkheid in een nieuwe staatshervorming,
CES Leuvense Economische Standpunten,
2007/115, Leuven.
DEGRYSE, H. (2007), Competition between
exchanges, What to expect from MiFID?, Banken Financiewezen/Revue Bancaire et Financiere.
HEREMANS, D. and DE SMET, D. (2007), Prudential
supervision in an integrating EU Financial market,
Documentatieblad Financiën 67(2), pp 117-146
VAN CAYSEELE, P. (2007), Het boetebeleid bekeken
vanuit economisch perspectief, Tijdschrift voor
Belgische Mededinging - Revue de la Concurrence
Belge 1, p. 21-30.
BOOKS
DE VOS, M. and KONINGS, J. (2007), Van baanzekerheid naar werkzekerheid op de Belgische
arbeidsmarkt, Itinera Instituut Studie.
DEGRYSE, H. and ONGENA, S. (2007), Competition
and regulation in the banking sector: a review of
the empirical evidence on the sources of bank rents,
in THAKOR, A. and BOOT, A. (eds), Handbook of
Financial Intermediation and Banking, forthcoming.
Oxford University Press.
DEGRYSE, H. and ONGENA, S. (2007), Technology,
regulation and the geographical scope of banking,
in FREIXAS, X., HARTMANN, P. and MAYERS, C.
(eds.), Handbook of European Financial Markets
and Institutions, forthcoming. Oxford University Press.
HEREMANS, D. (2007), Naar meer fiscaal evenwicht
in de staatshervorming. Een rechtseconomische
opgave in België, in Liber Amicorum Frans
Vanistendaal, (Knops Publ.), p. 193-199
HEREMANS, D. (2007), Regulation of Banking and
Financial Markets, in VAN DEN BERGH, R. (ed.),
Regulation and Economics, forthcoming. E. Elgar.
I Proceedings of conferences
CERQUEIRO, G., DEGRYSE, H. and ONGENA, S.
(2007), Rules, discretion and loan rates, in EVANOFF D.
(ed.), Federal Reserve Bank of Chicago Conference
on Bank Structure and Competition Proceedings,
p. 100-109.
DEGRYSE, H. and ONGENA, S. (2007), Competition
and regulation in retail banking: background paper, in
Competition and Regulation in Retail Banking, OECD
Competition Committee Roundtable 69, p.15-58.
GOOS, M. (2007), De toenemende polarisatie van
onze arbeidsmarkt, Business InZicht, 24 (Maart),
p. 2-3.
GOOS, M. and KONINGS, J. (2007), Het effect op
de werkgelegenheid en verloning van een verlaging
van de werkgeversbijdrage: een natuurlijk experiment
met Belgische data op bedrijfsniveau, Over.Werk
1/2007.
I Research papers
ABRAHAM, F., KONINGS, J. and SLOOTMAEKERS,
V. (2007), FDI spillovers in the Chinese manufacturing
sector: evidence of firm heterogeneity, CEPR
Working Paper.
CERQUEIRO, G., DEGRYSE, H. and ONGENA, S.
(2007), Rules versus discretion in loan rate setting,
COLANTONE, I. and SLEUWAEGEN, L. (2007),
Entry and exit of firms in a global economy: a crosscountry and industry analysis, Vlerick Leuven Gent
Management School Discussion Paper 2007/36.
56
COLANTONE, I. and SLEUWAEGEN, L. (2007),
Globalization and entrepreneurship: what do we
know?, Flanders District of Creativity Research Report
FERRARI, S., VERBOVEN, F. and DEGRYSE, H.
(2007), Investment and usage of new technologies:
evidence from a shared ATM Network, CES
Discussion Paper Series 07.31, p. 44. Leuven.
GOOS, M. (2007), No can do?: A test of the textbook model of labour markets, CES Discussion
Paper Series 07.06. Leuven.
GOOS, M. and KONINGS, J. (2007), The impact
of payroll tax reductions on employment and wages:
a natural experiment using firm level data, LICOS
Discussion Paper 178, p. 30. Leuven.
GOOS, M. and SALOMONS, A. (2007), Dangerous
liaisons: a social network model for the gender wage
gap, CES Discussion Paper Series 07.22, p. 26.
Leuven.
HEREMANS, D. (2007), Corporate governance
issues for banks. A financial stability perspective,
KONINGS, J. (2007), The impact of training on
productivity and wages. Evidence from Belgian firm
level panel data, LICOS Discussion Paper 197.
KONINGS, J. and VANDENBUSSCHE, H. (2007),
Antidumping protection and productivity of domestic
firms: a firm level analysis, LICOS Discussion Paper 196.
SCHAUMANS, C. (2007), Supplier inducement in the
Belgian primary care market, CES Discussion Paper
VAN CAYSEELE, P. and REYNAERTS, J. (2007),
Complementary platforms, CES Discussion Paper
MARK VAN ACHTER, Essays on the market
microstructure of financial markets, July 6, 2007
SUPERVISOR: Hans Degryse
CO-SUPERVISOR: P. Van Cayseele
DOCTORAL COMMITTEE: D. Heremans,
H. Dewachter, T. Foucault, E. Theissen
1. Patrick Van Cayseele was a member of
the scientific committee of the 34rd Annual
Conference of the European Association for
Research in Industrial Economics (EARIE),
5-8 September, Valencia.
2. Patrick Van Cayseele is a member of the
Redactiecomité of the Tijdschrift voor Belgische
Mededinging - Revue de la Concurrence Belge.
3. Patrick Van Cayseele is a member of the scientific
commission “Economie en Bedrijfskunde”
of the Funds for Scientific Research Flanders
(FWO).
I Research projects
Entry and competition: applications to the financial
sector, health services and retail, January 2004 December 2007, funded by FWO, supervised by
H. Degryse and F. Verboven, and funded by BOF,
October 2004 - October 2008, supervised by
F. Verboven and H. Degryse
Economists have long been occupied with understanding entry and market structure, and how they
are related with competition, market power and
economic efficiency. Theoretical research has
focused on a wide range of issues, for example the
questions whether free entry generates too much or
too little product variety from an efficiency perspective.
The majority of empirical research has been of a
descriptive nature, and has resulted in a many stylized
facts regarding the relationship between entry/market
structure and performance measures such as
industry profits, prices and innovation. Only recently,
has empirical research begun to address issues
of entry based on structural econometric models.
The advantage of this emerging literature is that it
becomes possible, under suitable identification
assumptions, to distinguish between two broad determinants of entry and market structure: non-strategic
technological and demand factors, and strategic
factors (intensity of competition).
Endogenous entry barriers in the banking industry,
January 2005 - December 2008, funded by FWO,
supervised by J. Bouckaert (University of Antwerp)
and H. Degryse.
Financial and banking markets have been liberalized
in many countries with the intention of enhancing
economic integration and to intensify competition in
banking markets. Financial and banking markets
are integrated when sufficient cross-border entry
and cross-border activities occur.
This project investigates the impact of endogenous
obstacles impeding banking market integration,
such as information asymmetries, switching costs,
and contracts as barriers to entry.
Endogenous entry barriers in the banking industry,
January 2005 - December 2008, funded by FWO,
supervised by J. Bouckaert (University of Antwerp)
and H. Degryse
Financial and banking markets have been liberalized
in many countries with the intention of enhancing
economic integration and competition in banking
markets. Financial and banking markets are integrated
when sufficient cross-border entry and cross-border
activities occur. This project investigates the
impact of endogenous obstacles impeding banking
market integration such as information asymmetries,
switching costs, and contracts as barriers to entry.
Decentralization and optimal management of public
debt in a federal state, January 2007- December
2010, funded by Flemish policy-research program
on budgetary and tax policy, supervised by
D. Heremans and K. Algoed.
Public debt in a federal state raises complex
issues as to the effects on financial markets, its
implications for sustainable budgetary policies,
and its requirements for corresponding fiscal
autonomy. These different implications of decentralization and sharing of debt in the ongoing devolution
process in Belgium are to be modeled in the project.
I Awards
Xiaoqiang Cheng received the Gregory Chow Best
Paper Award, 2007, Changsha, China, awarded at
the Chinese Economists Society Annual Conference,
granted by the Chinese Economists Society.
58
I Conferences
Dirk Heremans as a project director in the Flemish
Policy Research Program on Budgetary and Tax
Policy, organized a symposium on “The Political
Economy of Fiscal Federalism. Issues of
Decentralization in “Belgium” Leuven, 5 October 2007.
I External visiting
Xiaoqiang Cheng visited the Central Bank of Finland
between May and August 2007.
Italo Colantone spent the Fall 2007 semester
as a visiting student at Penn State University,
Pennsylvania, USA.
Emilia Jurzyk was a Visiting Researcher at the Department
of Finance of the Tilburg University in the Netherlands
between January - March 2007. She worked there on
the paper “Performance of Foreign Banks: Inherited or
Earned?”, which is a joint work with Olena Havrylchyk.
Emilia Jurzyk was a Visiting Researcher at the National
Bank of Poland in March and April 2007. She worked
there on the paper “The Effect of Foreign Bank Entry
on the Cost of Credit in Transition Economies. Which
Borrowers Benefit Most?”, which is a joint work with
Hans Degryse (Tilburg University and K.U.Leuven),
Olena Havrylchyk (CEPII), and Sylwester Kozak
(National Bank of Poland).
Catherine Schaumans visited the Kellogg School of
Management at Northwestern University (Chicago,
US) from January to June 2007.
Patrick Van Cayseele holds the Chair of Industrial
Economics at the University of Amsterdam.
I Presentations
Italo Colantone was invited to give the lecture “Entry
and Exit in Globalizing Industries: Evidence from the
EU” at the Max Planck institute of Economics in Jena,
Germany (May 2007).
Dries De Smet presented the paper “Measuring Network
Effects in the Classified Ads Market” (2007) by Patrick
Van Cayseele and Dries De Smet at the Monetary and
Information Economics Summer Camp, 27 April, Centre
for Economic Studies, Katholieke Universiteit Leuven,
and at the Media and Communication: Quantitative
and Econometric Analysis Conference, 22-23 November,
Sorbonne, Paris.
Dirk Heremans gave a lecture on “Corporate Governance:
The role of independent directors in the audit Committee”,
at the Audit Committee Workshop, International Institute
of Auditors, 5 May 2007, Brussels.
Emilia Jurzyk presented the paper “The effect of foreign
bank entry on cost of credit in transition economies.
Which borrowers benefit most?” (2007) by Hans Degryse,
Olena Havrylchyk, Emilia Jurzyk, and Sylwester Kozak
at the National Bank of Poland, 29 May, Warsaw.
Aysegul Kayaoglu presented a literature overview of
job polarization at the Monetary and Information
Economics Summer Camp, 27 April, Centre for Economic
Studies, Katholieke Universiteit Leuven.
Jo Reynaerts presented the paper “Complementary
Platforms” (2007) by Patrick Van Cayseele and
Jo Reynaerts at the Monetary and Information
Economics Summer Camp, 27 April, Centre for
Economic Studies, Katholieke Universiteit Leuven.
Anna Salomons presented a draft version of the paper
“A Social Network Model for the Gender Wage Gap”
(2007) by Maarten Goos and Anna Salomons at the
Monetary and Information Economics Summer Camp,
27 April, Centre for Economic Studies, Katholieke
Universiteit Leuven.
Patrick Van Cayseele gave the lecture “Competition in
the European Market for Custodians” at the Master of
Financial Transaction Services Program, 31 January,
Marche-en-Famenne.
Patrick Van Cayseele presented the paper “Complementary Platforms” (2007) by Patrick Van Cayseele and
Jo Reynaerts at the Autoridade da Concorrência,
7 May, Lisbon.
Patrick Van Cayseele presented the paper “Prices and
Network Externalities in Two-Sided Markets: The Belgian
Newspaper Industry” (2007) by Patrick Van Cayseele
and Stijn Vanormelingen at the Autoridade da
Concorrência, 7 May, Lisbon.
Patrick Van Cayseele presented the paper “Prices and
and Stijn Vanormelingen at the 34th Annual Conference
of the European Association for Research in Industrial
Economics (EARIE), 5-8 September, Valencia.
Patrick Van Cayseele gave the lecture “Competition in
Banking: An Antitrust Risk Assessment” at the Belgian
Financial Forum on Competition and Consolidation in
the Financial Industry (Febelfin) Colloqium, 20 November,
Brussels.
Patrick Van Cayseele gave the lecture “Indicators of
Economic Competition and Priorities in Competition
Policy Enforcement” at the Joint Meeting of the National
Courts of Auditors, 22 November, Rekenkamer, The Hague.
Patrick Van Cayseele gave the lecture “Recente
Wetenschappelijke Ontwikkelingen met Mededingingsapplicaties” at the Annual Meeting of ENCORE
Fellows, 7 December, Amsterdam.
Stijn Vanormelingen presented the paper “Prices and
and Stijn Vanormelingen at the 5th International
Industrial Organization Conference at Georgia Southern
University, 14-15 April, Savannah, the Monetary and
Information Economics Summer Camp, 27 April,
K.U.Leuven, and the Economics of Industry work in
progress seminar series at the London School of
Economics.
Christophe Wuyts presented his paper “Efficiency
and the Organization of the European Settlement and
Depository Industry” at the Monetary and Information
Economics Summer Camp, 27 April, Centre for
Economic Studies, Katholieke Universiteit Leuven.
60
Public Economics
61
FACULTY MEMBERS:
Public Economics
Laurens Cherchye [1]
Guido De Bruyne [2]
André Decoster [3]
Erik Schokkaert [4]
1
2
Guido De Bruyne is doing research on macroeconomic
optimising models of imperfect competition with sticky
prices and (or) wages. Within this general framework,
he focuses on the welfare analysis of alternative monetary
policy rules and of various institutional arrangements,
for example the regulation in goods and labour markets.
3
4
André Decoster is interested in income (re)distribution, more
specifically the measurement of inequality and poverty, and the
redistributive effects of direct and indirect taxes and social
security. The analysis rests on the use of microdata and on the
methodology of micro simulation. The measurement issues
are also applied to the topical subject of world inequality.
EMERITI:
Mark Eyskens
Paul Van Rompuy
Wim Moesen
AFFILIATED RESEARCHER:
Tom Van Puyenbroeck Koen Algoed
DOCTORAL RESEARCHERS:
Kristof Bosmans
Erwin Ooghe
Bart Capéau
RESEARCHERS:
Koen Decancq
Bram De Rock
Kristof De Witte
Kris De Swerdt
Yuemei Ji
Kristian Orsini
Javier Olivera Angulo
Nicky Rogge
62
Laurens Cherchye is interested in the modeling of microeconomic choice behavior and in composite indicator
construction. As for the modeling of microeconomic choice
behavior, he mainly focuses on nonparametric techniques
for analyzing rational consumption and production behavior.
As for composite indicator construction, he mainly focuses
on endogenous weighting methods for measuring multidimensional policy performance.
Jeroen Sabbe
Tom Truyts
Carine Van de
Voorde (50%)
Dirk Verwerft
Vera Zaporozhets
Blanca Zuluaga
Wim Moesen is interested in the measurement of public
performance using composite indicators with endogenous
weights. He also investigates the empirical relationship
between the quality of public institutions and economic
welfare. Within the area of public finance he assesses the
municipal finances in Belgium.
Erik Schokkaert is interested in welfare economics and in
public economics. In welfare economics he studies different
notions of social welfare and economic justice, and uses
survey research to see whether these notions are accepted
by the population. In public economics he focuses on the
trade-off between justice and efficiency and on the role of the
government with respect to taxation, health and social security.
Public Economics 63
Paul Van Rompuy is interested in economic issues of
federalism (i.e. decentralization of economic policies and
social protection, incentives for lower level governments,
interregional fiscal flows) and in the analysis of the impact
of institutional factors on the performance of European
labour markets.
I The measurement of inequality and
welfare dominance
Koen Decancq is interested in the measurement of
multidimensional inequality and poverty. He worked out a
multidimensional generalization of the Gini inequality index.
He focused on the sensitivity of multidimensional inequality
measures to the dependence between the dimensions and
applied the copula function to model and describe
dependence. The derived multidimensional indices were
applied to Russian household data and to the evolution of
the world well-being inequality, with special attention to the
weights of the dimensions.
Erik Schokkaert analyzed the limitations and possibilities of
making Sen's framework of capabilities operational for policy
evaluation. He collaborates with BEPA (Bureau of
European Policy Advisers) to see whether capabilities can
be useful to better structure the impact assessments within
the EU.
Together with Marc Fleurbaey, he analyzed different methods
to measure "unfair" inequalities in health and health care.
Measuring “unfairness” implies that a distinction is introduced
between causal variables, leading to ethically legitimate
inequalities and causal variables, leading to ethically illegitimate
inequalities. An example of the former could be life-style
choices, an example of the latter is social background.
They show how to derive measures of unfair inequalities in
health and in health care delivery from a structural model
of health care and health production; "direct unfairness",
linked to the variations in medical expenditures and health
in the hypothetical distribution, in which all legitimate
sources of variation are kept constant; "fairness gap",
linked to the differences between the actual distribution
and the hypothetical distribution, in which all illegitimate
sources of variation have been removed. They compare
their proposal to the more common approach using concentration curves, and discuss how inequalities in health
care can be integrated in an overall evaluation of social
inequality.
I Microsimulation and social security
André Decoster, Kris De Swerdt and Kristian Orsini
continued their work on the microsimulation model MIMOSIS.
The labour supply model has been further refined and used
to simulate the labour supply, distributional and revenue
effects of the introduction of a workbonus in Belgium.
During his stay at Statistics Norway, Kristian Orsini cooperated
extensively with John Dagsvik and Zhiyang Jia on the
development of a more refined modeling framework to
improve the treatment of demand side rationing in individuals'
and households' labour supply opportunities. The new
model was then used and compared with the previous
model in an evaluation of the Belgian workbonus. Together
with Mathieu Lefèbvre and Alexis Paszukiewicz of the
University of Liège, Kristian Orsini designed an additional
behavioral module for MIMOSIS to analyze retirement
decisions. The module is not yet operational, but the first
estimations and simulations are promising.
Public Economics
André Decoster and Kris De Swerdt started estimating
effective marginal and participation tax rates using
MIMOSIS to give a detailed picture of the distribution
of work (dis)incentives across the population for different
wage levels and number of hours worked. The model
has also been used to cast some light on the distribution
of average effective tax rates taking into account social
security contributions and benefits.
André Decoster, Kris De Swerdt, Bram De Rock and
Dirk Verwerft worked on a European Commission
sponsored project that is aimed at incorporating indirect
tax effects into the EUROMOD micro-simulation program.
They built a generic program to link the detailed indirect
tax legislation to the detailed itemization of a country
specific budget survey, and applied it to compare the
distributional effect of indirect taxes in five EU member
states: Belgium, Greece, Hungary, Ireland and the UK.
Secondly, they evaluated different matching methods
devised to concatenate budget and income surveys
into one dataset. The goal is to identify and select the
best performing method to be used in EUROMOD.
André Decoster and Kristian Orsini combined the
microsimulation model EUROMOD with the Belgian
budget survey of 2001, to estimate the behavioral,
budgetary and distributional effects of the introduction
of a flat tax.
64
I The foundations of the welfare
state and the reduction of poverty
Blanca Zuluaga analyzed the relationship between
early childbearing and women educational attainments.
The idea is to determine under which conditions an
early birth has irreversible effects for the future
performance of the young mothers. The effects are
considered irreversible if either women never catch up
to their fellow non-teen mothers (w.r.t. socioeconomic
achievements), or if the time to catch up is so large that
it could considerably affect their returns.
Tom Truyts continued investigating the use of consumption
for communication purposes and as a source of preference interdependencies. He examined the influence
of status driven social network formation on the transmission of economic inequality through generations,
and explored the implications of the use of consumption
for communication purposes for the theory of optimal
taxation. He is finishing his doctoral thesis entitled
“Diamonds are a girl's best friend - five essays on the
economics of social status”.
Yuemei Ji has particular interest in group poverty and
education. She is currently working on the theory of
identity and its impact on the underinvestment in education
by low income families. In the theoretical part, she tries
to model the formation of the low belief/identity of education, taking into account the social and psychological
factors. She will test her theoretical insights on identity
and educational choice with the Add Health dataset.
Public Economics 65
Javier Olivera Angulo analyzes the importance of social
norms and intergenerational transfers within families.
His theoretical work is meant to provide a better insight into
the future of intergenerational support in Latin America,
including the optimal way to organize the pension system.
I Public choice
Vera Zaporozhets focuses on the theoretical analysis of
political institutions and behavioral responses such as voting,
legislative politics, lobbying, and on evaluation of efficiency
properties of these institutions/procedures. She also analyzed
the extent to which direct collective choice procedures
provide incentives for individuals and groups to represent
their true preferences.
I Health insurance
Erik Schokkaert, Carine Van de Voorde and Kris De Swerdt
worked under a contract with RIZIV/INAMI to propose a
formula for the risk-adjusted distribution of the health care
budget over the Belgian sickness funds. In 2007, the focus
was on the analysis of the various methodological and
empirical issues raised by the integration of diagnostic
information in the risk adjustment formula. Carine Van de
Voorde contributed to an international comparison project
on risk adjustment and risk selection in Belgium, Germany,
Israel, the Netherlands and Switzerland in the period 20002006. Since 2000, two major trends can be observed. On the
one hand, the risk adjustment systems have been
improved, for example, by adding relevant health-based
risk adjusters.
On the other hand, in all 5 countries there is evidence of
increasing risk selection, which increasingly becomes a
problem, in particular in Germany and Switzerland. Some
potential explanations are given for these seemingly
contradictory observations.
Erik Schokkaert and Carine Van de Voorde also wrote a
theoretical paper on the analogy between risk adjustment
on the one hand, and standardization methods on the
other hand. Traditional methods of risk adjustment are
analogous to indirect standardization. They do not remove
incentives for risk selection. An alternative method of risk
adjustment based on direct standardization (as proposed
for Ireland), does remove the incentives for risk selection,
but at the cost of violating a neutrality condition, stating
that insurers should receive the same premium subsidy for
all members of the same risk group. The conflict between
removing incentives for risk selection and neutrality is
unavoidable if the health expenditure function is not additively
separable in the morbidity and efficiency variables.
Erik Schokkaert and Carine Van de Voorde were involved
in a research project (together with Diana De Graeve from
the University of Antwerp and coordinated by the KCE,
Federaal Kenniscentrum voor de Gezondheidszorg), to
analyze the distributional impact of out-of-pocket payments
for health care. In 2007, the focus was on the effect of the
so-called maximum billing mechanism. In the context of
that project, they analyzed (together with Diana De Graeve,
Ann Lecluyse and Tom Van Ourti, EURotterdam) the differential
take-up and the behavioral effects of supplemental health
insurance in Belgium. There is no evidence of adverse
selection in the coverage of supplemental health insurance,
but there are strong effects of socio-economic background.
Public Economics
A count model for hospital care shows that supplemental insurance has no significant effect on the number
of spells, but a negative effect on the number of nights.
This is in line with patterns of socio-economic stratification that have been well documented for Belgium.
It is also in line with the regulation on extra-billing,
protecting patients in common rooms.
I Composite performance indicators
Within the framework of the KEI Project (Knowledge
Economy Indicators) of the European Commission,
Laurens Cherchye, Wim Moesen, Nicky Rogge and
Tom Van Puyenbroeck use the method to the
Technology Achievement Index (in a joint paper with
various people of the Joint Research Center at Ispra).
They apply uncertainty and sensitivity analysis to
assess the robustness of the final outcome and to analyze
how much each source of uncertainty contributes to
the output variance.
Laurens Cherchye, Wim Moesen, Nicky Rogge
and Tom Van Puyenbroeck continued their work on the
construction of composite performance indicators with
endogenous weights. This non-uniform weighting
method may be labelled as “benefit-of-the-doubt”
weighting. It involves linear optimization techniques,
which allow countries to emphasize and prioritize
those aspects on which they perform relatively well.
They showed how such a synthetic performance indicator
may be instrumental within the framework of benchmarking the performance of nations.
Laurens Cherchye, Erwin Ooghe and Tom Van
Puyenbroeck proposed a robust ranking methodology
for multi-dimensional country performances that simultaneously accounts for disagreement about (i) how to
weight single-dimensional scores in the different
dimensions, and (ii) how to aggregate the weighted
scores over the different dimensions. They illustrate the
usefulness of the methodology by assessing the
robustness of the human development country ranking/
classification (produced annually by the United
Nations) in a descriptive and statistical way.
Laurens Cherchye, Wim Moesen and Tom Van
Puyenbroeck applied (in a joint paper with Knox Lovell)
this procedure to the dynamic performance of the
EU Internal Market, thereby highlighting its capacity to
disaggregate member states' observed performance
shifts into changes relative to benchmarks and performance changes of the benchmarks (i.e. catching up
versus genuine progress). Their results indicate that
the latter factor is more important in explaining the
observed progress.
I Public finance
Paul Van Rompuy analyzed the problem of how to
set up incentives at the sub-federal level to increase
the regional rate of employment. This issue was
integrated into the broader question of the regional
decentralization of some aspects of the Belgian Social
Security System.
Kristof De Witte and Wim Moesen investigated the
“optimal” size of the Belgian budget sector in a benchmark
exercise with some 20 mature OECD-economies.
66
Public Economics 67
Policy recommendations could be forwarded for the
Belgian public sector and economy, taking into account
country specific characteristics such as the degree of
openness and the average family size. They also assessed
the corporate governance in the Belgian public utilities
related to local governments.
I Nonparametric techniques for
analysing choice behavior and
for efficiency analysis
Together with Frederic Vermeulen, Laurens Cherchye
compared the empirical performance of unitary and collective
labour supply models, using representative data from the
Dutch DNB Household Survey. They conducted a nonparametric analysis that avoids the distortive impact of an
erroneously specified functional form for the preferences
and/or the intra-household bargaining process. Their analysis
focused on the goodness-of-fit of the two behavioral models.
To guarantee a fair comparison, they complemented this
goodness-of-fit analysis with a power analysis. Their results
strongly favoured the collective approach to modeling the
behavior of multi-person households.
Laurens Cherchye, Bram De Rock and Frederic Vermeulen
developed a nonparametric testing methodology for the general
collective consumption model, with public consumption and
externalities inside the household. Based on this testing
methodology, they developed a methodology that allows for
recovering the structure of the choice process (including
individual preferences and the intra-household allocation
process) that underlies the observed collective consumption
behavior. They argue that this methodology allows for
addressing welfare-related questions that are specific to
the collective consumption model, which pertain to the
within-household distribution of the household income.
Together with Jeroen Sabbe, they designed operational tools
that allow for efficiently implementing the newly proposed
methodology.
Laurens Cherchye and Bram De Rock (in a joint paper with
Sabrina Bruyneel) used the methodology for nonparametrically
testing the collective consumption model, and the underlying
assumption of Pareto efficiency, on the basis of experimental
data. By using nonparametric testing tools and experimental
data, they avoid the usual problems associated with parametric tests (i.e. non-verifiable parametric structure) and
the use of `real life' data sets (i.e. preference heterogeneity).
In addition, their collective rationality tests complement the
existing nonparametric-experimental evidence on individual
rationality.
Laurens Cherchye and Tom Van Puyenbroeck worked further
on the interpretation of “Data Envelopment Analysis” (DEA)
technical efficiency measures in terms of profit efficiency
and cost efficiency. They proposed a semi-radial technical
efficiency assessment framework, which combines technical
efficiency, as captured by the classical Farrell measure,
with an economically meaningful mix efficiency component.
They illustrated their theoretical ideas by analyzing the
profit efficiency of German farm types.
Together with Ides Nicaise, Laurens Cherchye, Kristof
Dewitte and Erwin Ooghe presented a nonparametric
approach for efficiency and equity evaluation in education.
They applied this approach for comparing private (i.e.
catholic) and public primary schools in Flanders. Firstly,
they used a nonparametric (DEA) model that is specially
tailored to assess educational efficiency at the pupil level.
Public Economics
Secondly, they proposed two multidimensional stochastic dominance criteria as naturally complementary
aggregation criteria for comparing the performance
of different school types (private and public
schools); these criteria are specifically designed for
aggregating pupils' output performance while adjusting for environment-corrected inefficiency. While the
first criterion only accounts for efficiency, the second
criterion also takes equity into consideration.
Kristof De Witte developed and applied non-parametric models to estimate the efficiency of local
public utilities. In particular, focusing on light handed
regulation, he designed incentives to trigger the
monopolistic drinking water utilities. In addition,
he investigated the merger economies in the Dutch
water sector (in joint papers with Rui Marques and
Elbert Dijkgraaf).
I Publications
BOSMANS, K. (2007), Income inequality,
quasi-concavity, and gradual population shifts,
Mathematical Social Sciences 53, p. 29-45.
CAPEAU, B. and OOGHE, E. (2007), On comparing
heterogeneous populations: is there really a conflict
between welfarism and a greater concern for equality
in living standards?, Mathematical Social Sciences
53, p. 1-28.
CHERCHYE, L., DE ROCK, B. and VERMEULEN, F.
(2007), The collective model of household consumption:
a nonparametric characterization, Econometrica 75,
p. 553-574.
CHERCHYE, L., LOVELL, K., MOESEN, W. and
VAN PUYENBROECK, T. (2007), One market,
one number? A composite indicator assessment of
EU internal market dynamics, European Economic
Review 51, p. 749-779.
CHERCHYE, L., MOESEN, W., ROGGE, N. and
VAN PUYENBROECK, T. (2007), An introduction
to 'Benefit of the Doubt' composite indicators,
Social Indicators Research 82, p. 111-145.
68
Public Economics 69
CHERCHYE L., MOESEN, W., ROGGE, N., VAN
PUYENBROECK, T., SAISANA, M., SALTELLI, A.,
LISKA, R. and TARANTOLA,S. (2007), Creating
composite indicators with DEA and robustness
analysis: the case of the technology achievement
index, Journal of the Operational Research Society,
forthcoming.
CHERCHYE, L., OOGHE, E. and VAN PUYENBROECK, T. (2007), Robust human development
rankings, Journal of Economic Inequality, forthcoming.
CHERCHYE, L. and VAN PUYENBROECK, T. (2007),
Profit efficiency analysis under limited information.
With an application to German farm types, OmegaInternational Journal of Management Science 35(3),
p. 335-349.
CHERCHYE, L. and VAN PUYENBROECK, T. (2007),
Semi-radical technical efficiency measurement,
European Journal of Operational Research, forthcoming.
CHERCHYE, L. and VERMEULEN, F. (2007),
Nonparametric analysis of household labour supply:
Goodness-of-fit and power of the unitary and the
collective model, Review of Economics and
Statistics, forthcoming.
DECANCQ, K., DECOSTER, A. and SCHOKKAERT, E.
(2007), The evolution of world inequality in well-being,
World Development, forthcoming.
DECOSTER, A., ORSINI, K. and VAN CAMP, G.
(2007), Stop the grief and back to work! An evaluation
of the government's plan to activate widows and
widowers, Brussels Economic Review, forthcoming.
DEKIMPE, K., DE ROCK, B. and MALFAIT, W.
(2007), The Anosov relation for Nielsen numbers
of maps of infra-nilmanifolds, Monatshefte Fur
Mathematic, forthcoming.
DEKIMPE, K., DE ROCK, B. and MALFAIT, W.
(2007), The Anosov theorem for intra-nilmanifolds
with cyclic holonomy group, Pacific Journal of
Mathematics, forthcoming.
DE WITTE, K. and MARQUES, R. (2007), Towards a
benchmarking paradigm in the drinking water sector,
Public Money and Management, forthcoming.
LUTTENS, RI. and OOGHE, E. (2007), Is it fair
to 'make work pay'?, Economica 74, p. 599-626.
OOGHE, E. (2007), Weighted utilitarianism and
sequential dominance, Economics Letters 94,
p. 208-212.
OOGHE, E., SCHOKKAERT, E. and VAN DE GAER,
D. (2007), Equality of opportunity versus equality of
opportunity sets, Social Choice and Welfare 28,
p. 209-230.
SCHOKKAERT, E. (2007), Capabilities and satisfaction
with life, Journal of Human Development 8 (3),
p. 415-430.
SCHOKKAERT, E. (2007), Macrojustice as a
research program, Economics and Philosophy,
forthcoming.
Public Economics
VAN DE VEN, W., BECK, K., VAN DE VOORDE, C.,
WASEM, J. and ZMORA, I. (2007), Risk adjustment
and risk selection in Europe: 6 years later, Health
Policy 83, p. 162-179.
DE WITTE, K. and MOESEN, W. (2007),
Intercommunales, corporate governance onder de
radar, Vlaams Tijdschrift Voor Overheidsmanagement
12(1), p. 36-43.
VAN PUYENBROECK, T. (2007), Proportional
representation, Gini coefficients, and the principle of
transfers, Journal of Theoretical Politics, forthcoming.
SCHOKKAERT, E. (2007), Hebben gezondheidszorg
en ziekteverzekering vrije markten nodig?,
CM-Informatie 228, Juni 2007, p. 9-24.
ALEXANDER, J. and DECANCQ, K. (2007),
Concepts and measurement of development, bridging
the gap. A review of: “Rights, deprivation and disparity:
essays in concepts and measurement” by
S. Subramanian, Economic and Political Weekly,
p. 35-37.
DE GRAEVE, D., LECLUYSE, A., SCHOKKAERT, E.,
VAN OURTI, T. and VAN DE VOORDE, C. (2007),
Wie betaalt supplementen in de Belgische gezondheidszorg?, Belgisch Tijdschrift voor Sociale
Zekerheid 49(1), p. 159-191.
DE GRAEVE, D., LECLUYSE, A., SCHOKKAERT, E.,
VAN DE VOORDE, C. and VAN OURTI, T. (2007),
Supplementen en de kostprijs van gezondheidszorg
voor de patiënt, Welzijnsgids 66, p. 123-141.
DE WITTE, K. (2007), Het beste van twee werelden:
Vewin versus Dijkgraaf, Helder 2(7), p. 6-7.
DE WITTE, K. and MARQUES, R. (2007),
Regulering brengt efficiëntie in de drinkwatersector,
Economische Statistische Berichten 92(4506).
DE WITTE, K. and MOESEN, W. (2007), De voetdruk
van de familie en de omvang van de overheid,
Tijdschrift Voor Openbare Financiën 1, p. 1-7.
70
SCHOKKAERT, E. (2007), Des marchés libres sont-ils
nécessaires pour les soins de santé et l'assurancemaladie?, MC-Informations 228, Juin 2007,
p. 9-24.
ALGOED, K., HEREMANS, D. and PEETERS, T.
(2007), Voorrang geven aan meer financieel-fiscale
verantwoordelijkheid in een nieuwe staatshervorming,
BARGAIN, O. and ORSINI, K. (2007), Beans for
breakfast? How exportable is the British Workfare
model?, in BARGAIN, O., Research in Labor
Economics, Vol 25, 165-198
DECOSTER, A. and ORSINI, K. (2007), Verdient
een vlaktaks zichzelf terug?, CES Leuvense
Economische Standpunten, p. 20.
(2007), Overlevingspensioen en toegelaten arbeid:
winnaars en verliezers bij invoering van het
Generatiepact-systeem [Gainers and losers of the
introduction of the Pact between Generations which
changes the allowed combination of labour market
activity and survivor pensions], in VAN DEN
TROOST, A. en VLEMINCKX, K. (eds.), Een pensioenstelsel op vrouwenmaat?, Garant, p. 105-136.
Public Economics 71
LECLUYSE, A., DE GRAEVE, D., SCHOKKAERT, E.,
VAN DE VOORDE, C. and VAN OURTI, T. (2007),
Hoger-lager? Een analyse van de uitgaven voor
patiënten onderaan de sociale ladder, in VRANKEN, J.
(ed.), Armoede en sociale uitsluiting: Jaarboek 2007.
Acco, Leuven, p. 193-206.
SCHOKKAERT, E. and VAN DE VOORDE, C. (2007),
Defederalisering van de Belgische Gezondheidszorg,
VAN ROMPUY, P. (2007), Sleutelen aan onze
staatsstructuur voor meer werk, CES Leuvense
Economische Standpunten, p. 16.
RESEARCH PAPERS
BOSMANS, K. and LAUWERS, L. (2007), Lorenz
comparisons of nine rules for the adjudication of
conflicting claims, CES Discussion Paper Series
07.05, p. 16.
BOSMANS, K. and SCHOKKAERT, E. (2007),
Equality preference in the claims problem: a questionnaire study of cuts in earnings and pensions, CORE
Discussion Paper 2007/30.
BOWEN, H., DE WITTE, K., CHAVEZ, J. G. and
MOESEN, W. (2007), The competitiveness of
Flanders in the ranking of the world economic forum,
Internal Report Vlerick Leuven Gent Management
School.
BOWEN, H. and MOESEN, W. (2007),
Benchmarking the competitiveness of nations:
benevolence versus equal treatment?, Paper
presented at the CES-IFO conference (Venice).
BRUYNEEL, S., CHERCHYE, L. and DE ROCK, B.
(2007), How to modeling collective rationality?
Evidence from a laboratory experiment, ECORE
Discussion Paper 2007-116.
CHERCHYE, L., DE ROCK, B. and VERMEULEN, F.
(2007), The revealed preference approach to collective
consumption behavior: testing, recovery and welfare
analysis, CES Discussion Paper Series 07.24, p. 38.
Leuven (also appeared as: CentER Discussion Paper
2007-73, Tilburg, CentER; IZA Discussion Paper
3062, Institute for the Study of Labor, Bonn).
CHERCHYE, L., DE WITTE, K., OOGHE, E. and
NICAISE, I. (2007), Equity and efficiency in private
and public education: a nonparametric comparison,
CES Discussion Paper Series 07.25, p. 20.
CHERCHYE, L., MOESEN, W., ROGGE, N. and
VAN PUYENBROECK, T. (2007), Benefit-of-the-doubt
benchmarking and missing data, Presentation at the
Final Workshop of the KEI project in Brussels,
8 & 9 November, 2007.
DECANCQ, K., DECOSTER, A. and SCHOKKAERT, E.
(2007), The evolution of world inequality in well-being,
CES Discussion Paper Series 07.04, p. 34.
DECOSTER, A., DE ROCK, B., DE SWERDT, K.,
FLANNERY, D., LOUGHREY, J., O'DONOGUE, C.
and VERWERFT, D. (2007), Comparative analysis
of different techniques to impute expenditures into
an income data set, Workpackage 3.4 of Accurate
Income Measurement for the Assessment of Public
Policies (AIM-AP Contract no 028412), Leuven.
Public Economics
FLANNERY, D., LOUGHREY, J., O'DONOGUE, C.
and VERWERFT, D. (2007), Matching indirect taxes
rates on budget surveys for five selected countries,
Workpackage 3.3 of Accurate Income Measurement
for the Assessment of Public Policies (AIM-AP
Contract no 028412), Leuven.
DE WITTE, K. and MARQUES, R. (2007), Towards a
benchmarking paradigm in the drinking water sector,
CES Working Paper.
FLANNERY, D., HAYES, P., HYNES, S., LOUGHREY,
J. and O'DONOGUE, C. (2007), Selection of the
countries and detailed description of the indirect tax
legislation, Workpackage 3.1 of Accurate Income
Measurement for the Assessment of Public Policies
(AIM-AP Contract no 028412), Leuven.
LE BRETON, M. and ZAPOROZHETS, V. (2007),
Legislative lobbying under political uncertainty,
CES Discussion Paper Series 07.10.
DECOSTER, A., DE SWERDT, K. and VERBIST, G.
(2007), Indirect taxes and social policy: distributional
impact of alternative financing of social security,
K.U.Leuven, CES Discussion Paper Series 07.11, p. 25.
(2007), Labour market responses of survival pensioners:
estimating a labour supply model and predicting the
effect of the reform, CES Discussion Paper Series
07.03, p. 49.
DE WITTE, K. and DIJKGRAAF, E. (2007), Mean and
bold? On separating merger economies from structural
efficiency gains in the drinking water sector,
Tinbergen Institute Discussion Paper 092/3.
DE WITTE, K. and MARQUES, R. (2007), Designing
incentives in local public utilities, an international
comparison of the drinking water sector, CES
Discussion Paper Series 07.32, p. 32.
72
FLEURBAEY, M. and SCHOKKAERT, E. (2007),
Unfair inequalities in health and health care, CORE
Discussion Paper 2007/90.
SCHOKKAERT, E. (2007), The capabilities approach,
SCHOKKAERT, E., DEVOOGHT, K., CAPEAU, B.
and LELLI, S. (2007), Allocating an indivisible good.
A questionnaire-experimental study of intercultural
differences, CES Discussion Paper Series 07.16.
SCHOKKAERT, E. and VAN DE VOORDE, C. (2007),
Direct versus indirect standardization in risk adjustment,
SCHOKKAERT, E., VAN OURTI, T., DE GRAEVE, D.,
LECLUYSE, A. and VAN DE VOORDE, C. (2007),
Supplemental health insurance and equality of
access in Belgium, CES Discussion Paper Series
07.29.
TRUYTS, T. (2007), Social status in a social structure:
noisy signaling in networks, CES Discussion Paper
Series 07.19.
ZULUAGA, B. (2007), Different channels of impact
of education on poverty: an analysis for Colombia,
Public Economics 73
Erik Schokkaert is member of the editorial board
of Social Choice and Welfare, Economics and
Philosophy and Recherches Economiques de Louvain.
BRAM DE ROCK, Collective choice behavior: nonparametric characterization, December 3, 2007.
SUPERVISOR: Laurens Cherchye
CO-SUPERVISOR: Frederic Vermeulen
DOCTORAL COMMITTEE: F. Spinnewyn,
A. Decoster, M. Browning, P. Chiappori, I. Crawford
I Research projects
Economic policy and finance in the global economy:
equilibrium analysis and social evaluation:
January 2007 - December 2011, IUAP-PAI project
funded by Belgian Science Policy, supervised by
E. Schokkaert (other Belgian partners: CORE, IRES,
SHERPPA, FUNDP Namur and ECARES; foreign
partners: LSE, Marseille, Toulouse, Maastricht).
The general purpose of the project is to develop
and use economic, social-choice, finance and
game-theoretical concepts to address the challenges
of globalization for developed and developing
countries and to normatively evaluate proposed
policies. Part I of the project is devoted to the
study and the design of markets and social
mechanisms, involving networks and coalitions,
bargaining procedures and conflict resolution.
General equilibrium modeling of long-term issues
in a macro and international perspective, as well
as computation methods for applications are also
included in this part. The second part - on social
evaluation and public governance - is concerned
with normative issues and political feasibility considerations. New equity criteria and their compatibility
with collective efficiency in different types of social
situations are considered. This is done in different
settings and for different issues: poverty and
social protection, educational subsidies, mobility,
pollution, multidimensional inequality and intergenerational equity. The third part is devoted to
international economics and finance. It concerns
trade policy, competition policy in the EU, the spatial
redistribution of economic activities and international
migration. From an econometric point of view,
it aims at developing quantitative tools to analyze
investment decisions in the presence of interest
rate and inflation risk (that may differ between
countries), and at understanding the differences of
stock market microstructures across competing
markets (for instance, European markets), as well
as the interrelations between financial variables
generated from these markets (for instance the
lead-lag effect between Asian, American and
European markets).
Construction of a distribution mechanism for the
health insurance budget: January 2003 March 2008, funded by RIZIV/INAMI, supervised by
E. Schokkaert and C. Van de Voorde.
The objective of this research project is the development of an operational explanatory model for the
medical consumption of all social insured persons
within the scope of the Belgian compulsory health
insurance system. On the basis of the statistical
results, a distribution mechanism is derived to
allocate the total health care budget over the different
sickness funds, so as to compensate them as well
as possible for the differences in the risk profile of
their membership.
Public Economics
KEI: Knowledge Economy Indicators, September
2004 - February 2007, funded by EC, supervised by
W. Moesen and L. Cherchye.
The project is financed within the Sixth Framework
Program of the European Commission. The project's
aim is to develop and improve indicators for the
knowledge economy, including the analysis of aggregation issues and the use of composite indicators.
The KEI project will review existing concepts and
definitions of the knowledge-based economy and its
key components. It will develop main thematic areas
in relation to the Lisbon and Barcelona objectives.
KEI will then use these themes to classify existing
indicators and thoroughly explore data and indicator
quality issues. Gaps will be identified and the way
forward will be mapped, identifying innovative
approaches to improve the understanding and
appraisal of the knowledge economy. Composite
indicators will be analyzed in detail, using both
statistical and participatory approaches, including
the use of multi-criteria methods, and an evaluation of
analytical and presentational techniques. Simulation
methods will be extensively employed to investigate
the robustness of indicators and the conclusions
based upon them. The study will evaluate the
quality and accuracy of indicators and the underlying
data, and access the innovative use of additional
information to improve indicator quality.
Microsimulation of social protection, December
2005 - August 2007, funded by the Federal Science
Policy, supervised by A. Decoster.
Valorization of the Microsimulation Model for
Social Security (MIMOSIS), December 2005 December 2007, Project AG/01/116: funded by
Federal Science Policy, supervised by A. Decoster,
cooperation between University of Leuven, University
of Liège (Sergio Perelman) and University of Antwerp
(Gerlinde Verbist)
74
This project is a sequel to a previous one, in which
teams of three different universities developed a
microsimulation model to simulate policy reforms
in social security and tax benefit domains. The new
and distinctive feature (for Belgium) of this model
is that it uses administrative data as input for the
simulations. This project consists of updating,
extending and refining the existing model with
additional data and in starting the modeling and
integration of behavioral reactions, such as labour
supply and the retirement decision.
Imputation of expenditure data on income surveys
for indirect tax simulations, February 2006 December 2008, supervised by A. Decoster.
The aim of this 3rd subproject of the larger AIM-AP
project (Accurate Income Measurement for the
Assessment of Public Policies directed by Holly
Sutherland and funded by the EU) is to incorporate
the effects of indirect taxes, along with direct
taxes and social benefits, in redistribution analysis
by means of the microsimulation model EUROMOD. We will mainly focus on developing a generic
method of imputation of expenditures on income
surveys of a selected set of EU-countries.
The impact of institutions on firm's accounting
quality and cost of capital, January 2008 December 2012, funded by Research Foundation
Flanders, supervised by A. Gaeremynck and L.
Cherchye.
The purpose of the study is to investigate the link
between the quality of a country' s institutional
framework, a firm' s accounting quality and a firm' s
cost of capital. This study contributes to the existing
literature by investigating the effect of institutional
characteristics and accounting standards on the
accounting quality and the cost of capital, whereas
most existing studies focus exclusively on either
one of the two. The results of this study will be
Public Economics 75
highly relevant for the debate that is currently going
on in the EU; it should help us understand whether
an EU-wide adoption of a global standard like
IFRS is sufficient to receive comparable accounting
quality everywhere in the EU or, alternatively, whether
a further alignment of the institutional environment
is needed for that purpose. The original methodological contribution of this study is that it uses
DEA-based ('benefit-of-the-doubt') composite
indicators for measuring the degree of (multidimensional) institutional quality at the country level
and the degree of (multidimensional) accounting
quality at the firm level; as we will argue, this should
provide a more transparent overall picture of the
relations that we want to investigate.
I Awards
Erik Schokkaert received the “Rik Branson-Chair
Civil Society”. The chair is named after the retiring
Arco chief Rik Branson and is meant to encourage
research on the economic aspects of the civil society.
Important topics will be the conflicting financial and
social interests in 'soft' sectors as health care and the
social foundations of solidarity in a market economy.
Laurens Cherchye, Bram De Rock and Jeroen
Sabbe organized the NBB-CES workshop on
“Advances in consumption demand modeling”
(speakers: Martin Browning, Oxford University,
and Ian Crawford, Oxford University). The meeting
took place in Leuven on December 3.
The Public Economics Workshop, co-organized
by Erik Schokkaert, André Decoster, Wim Moesen,
Paul Van Rompuy and Guido de Bruyne, met as follows:
April 11, 2007: SNORRE KVERNDOKK (Frisch
Center for Economic Research, Oslo), Health inequality
in Nordic welfare states - better data or more
inequality?
October 11, 2007: KRISTOF DE WITTE
(K.U.Leuven, C.E.S), Equity and efficiency in private
and public education: a nonparametric comparison
October 18, 2007: ROLAND-IWAN LUTTENS
(UGent), Voting for redistribution under
desert-sensitive altruism
November 13, 2007: C.A. KNOX LOVELL
(University of Queensland and University of Georgia),
Productivity and financial performance
November 22, 2007: KOEN DECANCQ (K.U.Leuven,
C.E.S.), Multidimensional inequality and the Copula
November 29, 2007: ANDREAS PEICHL (FIFO,
Institute for Public Economics and Cologne Center
for Public Economic Universität Köln), The benefits
of linking CGE and microsimulation models evidence from a flat tax analysis
December 13, 2007: TOM TRUYTS (K.U.Leuven,
C.E.S.), Cost signalling and indirect taxation
December 20, 2007: KRISTIAN ORSINI (K.U.Leuven,
C.E.S.), Subsidies on low skilled's social security
contributions; the case of Belgium.
I External visiting
Public Economics
Kristof De Witte visited the Technical University of
Lisbon, from 29 November until 10 December 2007,
to investigate incentive regulation in local public utilities.
His stay was financed by the Technical University
of Lisbon.
Erik Schokkaert was visiting professor at the London
School of Economics in February 2007.
Javier Olivera Angulo was visiting lecturer at the
University of Piura (Peru), Department of Economics
from August to December 2007.
76
Quantitative Economic History
77
FACULTY MEMBERS:
Erik Buyst
Erik Buyst is mainly interested in business history, macroeconomic history, the history of economic thought, and in
policy-oriented economic research.
I Business history
EMERITI:
Herman Van der Wee
RESEARCHERS:
Johan Delbeke
Kristof Lowyck
Eline Poelmans
Lode Smets
Peter Van der Hallen
78
Erik Buyst together with Antoon Soete and Kristof
Lowyck, finished a book on the history of GIMV, the major
provider of venture capital in Belgium. Erik Buyst also
wrote an article on company archives in the province of
Vlaams-Brabant.
Eline Poelmans continued her research on a mandate from
Research Foundation Flanders to pursue a PhD on the
subject of European Integration. More specifically she
investigated the history of competition policy in continental
Europe, with the European Coal and Steel Community (ECSC)
in the period 1952 - 1968, as a case study. She focused
on the regional concentration of the coal and steel production
in the ECSC and on the shift in relative importance of the
'industrial triangle' in the European Coal and Steel
Community between 1952 and 1968. Moreover, she conducted research on the importance of the 'coastal steelworks'
in this period. Subsequently, she carried out a quantitative
analysis on the influence of 'governmental participation' on
the concentration of the coal producing companies in the
countries of the ECSC between 1952 and 1968.
Quantitative Economic History 79
Peter Van der Hallen continued his research on the Belgian
agro-alimentary industry in the twentieth century within the
framework of his doctoral dissertation. He studied the effects
of the development of new technologies in the brewing
industry, specifically the breakthrough of lager beers, and of
concentration on the Belgian beer market during the interwar
years, applying Sutton's model on industrial organization.
Together with Erik Buyst, he focused on the different historical
datasets dealing with occupational structure in the food
industry, assessing the relative value of and the existing
biases within the available censuses in the first decennia of
the twentieth century. Furthermore, he furthermore started
research on the functioning and weaknesses of cooperatives
in the Belgian dairy industry in the beginning of the twentieth
century.
I Macroeconomic history
Erik Buyst investigated the context in which economics
departments at central banks were established. He also
did research on regional differences in the industrialization
process of Vlaams-Brabant in the first half of the 20th century.
Erik Buyst is the Belgian representative of the ESF Research
Networking Programme 'Globalizing Europe Economic History
Network (Globaleuronet), 2006-2010’.
I Analysis of Housing Policy
Erik Buyst is promotor of the Housing research team
within the Policy Research Centre Spatial Planning and
Housing. Under supervision of Erik Buyst, Johan Delbeke
and Lode Smets investigated the renovation needs of the
Flemish housing stock. Furthermore, Lode Smets estimated
the number of households in Flanders eligible for renting
social housing, given the current legislation. In collaboration
with Sien Winters (HIVA-K.U.Leuven), Marietta Haffner and
Gerard Van Bortel (OTB-TU Delft) Lode Smets investigated
the possibilities for setting up a system of performance
measurement in the Flemish social housing sector.
Erik Buyst together with other researchers, devised a set of
indicators to monitor the Flemish housing market. He also
investigated the possibilities to launch supply side policies
to stimulate investment in rented housing. Furthermore, he
analyzed the Flemish rented housing market from an international perspective.
I Publications
ARTICLES IN REVIEWED INTERNATIONAL JOURNALS
LEFEBVRE, W. and BUYST, E. (2007), Enkele
verklaringsfactoren voor de regionaal gedifferentieerde industriële ontwikkeling van Vlaams-Brabant
tussen 1896 en 1961, Belgisch Tijdschrift Voor
Nieuwste Geschiedenis 37, p. 41-77.
RESEARCH PAPERS
BUYST, E., WINTERS, W., VANDEKERCKHOVE, B.
and DELBEKE, J. (2007), Een meetinstrument voor
het Vlaamse woonbeleid, Kenniscentrum voor
Duurzaam Woonbeleid Leuven, 93 pp.
DELBEKE J. and SMETS L. (2007). De woningmarkt
in Vlaanderen. Een onderzoek naar de vraagdeterminanten en renovatiebehoefte. Kenniscentrum voor
Duurzaam Woonbeleid Leuven.
BUYST, E. and MAES, I. (2007), Monetary policy
controversies and the creation of economics
departments at central banks: The case of Belgium,
in ASSO, P. F. and FIORITO, L., Economics and
institutions. Contributions from the history of economic thought, p. 143-162. Milano: FrancoAngeli.
BUYST, E. (2007), Bedrijfsarchieven in VlaamsBrabant, in Het Max Wildiersfonds geëvalueerd.
Archief en wetenschappelijk onderzoek (Archiefkunde 9),
p. 118-124. Berchem: Vlaamse Vereniging voor
Bibliotheek-, Archief- en Documentatiewezen.
BOOKS
BUYST, E., LOWYCK, K. and SOETE, A. (2007),
GIMV: 25 Years of holding and letting go.
Kapellen: Pelckmans, 156 pp.
ELSINGA, M., HAFFNER, M., HOEKSTRA, J.,
VANDENBROUCKE, P., BUYST, E. and WINTERS, S.
(2007), Beleid voor de private huur: een vergelijking
van zes landen, Departement Ruimtelijke Ordening,
Woonbeleid en Onroerende Erfgoed Brussel, 155 pp.
SMETS, L. and VANDEKERCKHOVE B. (2007).
Raming van de theoretische doelgroep sociale
huisvesting. Een onderzoek in het kader van
het investeringsprogramma sociale woningbouw.
Steunpunt beleidsrelevant onderzoek Ruimte en
Wonen, Leuven.
VANDENBROUCKE, P., BUYST, E., WINTERS, S.,
ELSINGA, M., HAFFNER, M. and HOEKSTRA, J.
(2007), Naar een aanbodbeleid voor de Vlaamse
private huurmarkt, Departement Ruimtelijke
Ordening, Woonbeleid en Onroerende Erfgoed,
Brussel, 158 pp.
VAN DER HALLEN, P. (2007), Concentration in
the Belgian brewing industry and the breakthrough
of lager in the interwar years, CES Discussion
Paper 07.28.
80
Erik Buyst is member of the editorial board of
Economies et Sociétés.
I Research projects
The food industry in Belgium, 1890 - 1980.
A historical-economic analysis, January 2005 December 2008, funded by FWO, supervised
by E. Buyst
The aim of this research project consists of an
analysis of the transition of the food industry from
a traditional artisanal industry at the end of the
nineteenth century, to the contemporary modern
large-scale companies. This transformation had
great repercussions on the Belgian food sector.
Although these developments towards large-scale
production and management did not pass by on
the Belgian food sector, almost none of the large
multinationals dominating this industry originated
in Belgium. This peculiar position of the Belgian
industry needs an explanation. Hence, a sectorspecific model will be formulated, determining
which factors were responsible the development
of this position.
Policy Research Centre Spatial Planning and
Housing, January 2007 - December 2011, funded
by Flemish Community, supervised by E. Buyst
The Housing research team within the Policy
Research Centre, consists of experts of five academic institutes in Belgium and the Netherlands
plus a private consultancy firm. Its main task is to
assess from various perspectives, the quality of
the housing stock and the expectations of housing
consumers in Flanders. This information will be
used to construct indicators for the Flemish housing
market and to estimate the housing needs with an
econometric model. The research team will also
analyze on specific, policy-oriented topics. The topics
conducted in 2007 are mentioned below.
Estimation of the number of households theoretically eligible for social housing, January 2007 July 2007, funded by the Flemish Community,
supervised by E. Buyst.
The aim of this research was to supply policy
makers with an estimation of the geographical
dispersal of households qualified for social housing.
The estimation of the dispersal was the starting
point for drawing-up the Flemish investment
program (IP) of social housing.
From dispersal of social needs to dispersal of
funds for social housing, 1 month throughout
2007, funded by the Flemish Community, supervised
by E. Buyst.
As a follow-up on the research program
'Estimation of the number of households theoretically
qualified for social housing', Lode Smets was a
member of the working group drawing-up the
investment program (IP) for social housing.
Lode Smets mainly gave methodological advice
concerning the modeling of a dispersal model for
the investment program (IP) of social housing.
He also supplied the working group with local
housing data.
Performance measurement in the Flemish social
housing sector, September 2007 - November 2007,
funded by the Flemish Community, supervised by
E. Buyst
In collaboration with Sien Winters (HIVA-K.U.Leuven),
Marietta Haffner and Gerard van Bortel (OTB-TU
Delft), Lode Smets investigated the possibilities for
drawing-up a performance measurement system
in the Flemish social housing sector. Comparing
the steering networks of the social housing sector
in England, the Netherlands, Brussels and
Flanders, the researchers expressed the need for
an integrated measurement system in the Flemish
social housing sector. In a next phase, a monitoring
system will be constructed in consultation with all
relevant stakeholders.
82
I Conferences
30 November 2007 (K.U.Leuven):
The Occupation in Historical Research
(E. BUYST and B. VAN DE PUTTE).
The Quantitative Economics Workshop, co-organized
by Erik Buyst met as follows:
April 16, 2007: PETER VAN DER HALLEN
(K.U.Leuven), Concentration in the Belgian
brewing industry and the breakthrough of lager
in the interwar years
I Centre for Economic Studies Seminar Series 2007
Seminar Series
THE CENTRE FOR ECONOMIC STUDIES SEMINAR, ORGANISED BY THE RESEARCH GROUPS, MET AS FOLLOWS:
February 27, 2007:
RALPH BRAID (Wayen State University), State and local tax competition in a spatial model with sales
taxes and residential property taxes
March 1, 2007:
STEF PROOST (K.U.Leuven), Economics of trans European networks
March 30, 2007:
SNORRE KVERNDOKK (Ragnar Frisch Center for Economic Research Oslo), Optimal timing
of environmental policy; interaction between environmental taxes and innovation externalities.
April 26, 2007:
JEAN- YVES DUCLOS (Université Laval, Québec), Health and welfare in 19th century France
May 6, 2007:
ANTON BRENDER (Université Paris - Dauphiné), Global imbalances
May 9, 2007:
DAVID WETTSTEIN (Ben-Gurion University of the Negev, Israël), Implementing cooperative solution
concepts: a generalized bidding approach
June 21, 2007:
JUAN D. MORENO - TERNERO (Universidad de Málaga and Core (Université Catholique de Louvain),
The political economy of health care finance
84
85
June 25, 2007:
RUI CUNHA MARQUES (Center of Urban and regional systems, Technical University of Lisbon), Performance
measurement and regulation of water utilities
September 18, 2007:
PETER DEBAERE (Darden School of Business, University of Virginia), Do tariffs matter for the extensive margin
of international trade? An empirical analysis
October 4, 2007:
J.D. WILSON (Michigan State University), The welfare state vs the common labor market: which to dismantle?
November 15, 2007:
EMILY BLANCHARD (University of Virginia), Political stasis or protectionist rut? Policy mechanisms for trade reform
in a democracy
December 7, 2007:
MATTI LISKI (University of Helsinki), Market power and storage: evidence form hydro use in the Nordic power market
CES WORKSHOP
December 3, 2007:
MARTIN BROWNING (Oxford University), Spending time and money within the household
IAN CRAWFORD (Oxford University and IFS), A nonparametric analysis of habits models
Notes
Notes
86
87
Notes
Notes
Notes
88

bro jaarvdew 07

Transcription

Similar documents

our faculty hiring brochure

grand rapids, mi • van andel arena • sunday, october 16, 2016 • 6:00

Sign Up Today - Michigan REALTORS

Brutto Gusto_fine arts Torstraße 175 10115 Berlin www.bruttogusto

Pigeonberry or Rougeplant, Rivina humilis

customer information sheet

19 foot Bushtracker

VBI 0000 PRINT Sales Sheets-1 - Van Beurden Insurance Services

The Resource Economics Major at the University of Connecticut

ZIMAS Map Instructions