Florence Bouvet

European Regional Structural Funds: How Large is the Influence of Politics on the Allocation Process?

The allocation of Structural Funds, the most important component of the European Union (EU) cohesion policy, is subject to intense bargaining between national governments and across layers of political governance. Using Structural Funds data for each cohesion objective over 1989–99, we examine which variables, economic and political, determine the actual funds allocation. We test our hypotheses with a Tobit model that accounts for the two-stage allocation process and our limited dependent variables. Our results indicate that economic criteria are not the only determinants of funds allocation. Indeed, we find that the political situation within a country and a region and the relations between various layers of governance influence the allocation process. This article is also the only study to measure the impact of additional funds provided by the region or the country itself, and to differentiate the analysis by cohesion objective.

The Beveridge curve in Europe: new evidence using national and regional data

The Beveridge curve depicts the empirical negative relationship between job vacancy rate and unemployment rate, and reflects the efficiency of the job matching process. Movements along a fixed downward sloping Beveridge curve are associated with cyclical shocks, while shifts of the curve arise from structural factors that alter the matching efficiency between job vacancies and unemployed workers. National and regional data on job vacancies and unemployment are combined to estimate the Beveridge curves of five European countries and their regions, focusing on the period 1975 to 2004. I also analyse whether shifts in European Beveridge curves are due to changes in the composition of the unemployed pool, labour market rigidities or cyclical and structural shocks. The empirical evidence suggests that changes in labour market rigidities, long term unemployment, as well as cyclical shocks are responsible for outward shifts in European Beveridge curves. I also find evidence of nonlinearities in the relation between unemployment and labour market institutions.

Do National Economic Shocks Influence European Central Bank Interest Rate Decisions? The Impact of the Financial and Sovereign Debt Crises

This article examines the relevance of national economic conditions for European Central Bank (ECB) interest rate setting and whether the financial and sovereign debt crises have made national divergences more relevant. Officially, the ECB sets policy for the eurozone and considers only eurozone data. However, economic shocks in one or more countries may warrant a deviation from this rule. Using real‐time, forecast data, the authors estimate a modified Taylor rule incorporating two macroeconomic ‘national influence’ measures: first the difference between the median and the eurozone measures of inflation and real gross domestic product (GDP) growth, and then deviations of the measures of inflation and real GDP growth for the ‘core’ and ‘periphery’ countries from eurozone averages. Using rolling‐window analysis to test the stability of parameter estimates, evidence is found that divergences in national data – notably developments in the periphery – from eurozone averages play an increasingly important role during the financial and sovereign debt crises.

Wage disparities in China: an analysis by firm types

This paper investigates the evolution of interprovincial wage inequality and the causes behind its increase over the last two decades. We focus more specifically on the impact of export-led-market reforms on wages disparities within and between five firm types in China. When measured with the GE(1) index, overall wage inequality among Chinese provinces increased by 50% between 1993 and 2007, most notably during the early 1990s as China accelerated its integration into the world economy. The inequality analysis by firm type suggests that increased international competition has had a large impact on wage inequality among domestic firms but almost none on inequality among foreign firms. The panel analysis conducted in this paper also suggests that factors enhancing labor productivity such as larger capital stock endowment per worker and better infrastructure endowment have a greater impact on wage inequality than an increase in economic integration, particularly for domestic firms located in the interior region.