WIFO Working Papers

Discussion papers by WIFO staff, consultants and guests – As of 2006 available online only – Free download

WIFO Working Papers are not peer reviewed and are not necessarily based on a coordinated position of WIFO. The authors were informed about the Guidelines for Good Scientific Practice of the Austrian Agency for Research Integrity (ÖAWI), in particular with regard to the documentation of all elements necessary for the replicability of the results.

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WIFO Working Papers, 2023, (659), 38 pages
Online since: 08.03.2023 0:00
This paper analyses the direct and indirect trade volume and trade cost effects of uncertainty on international trade and economic welfare using a structural gravity framework for a panel of 97 developed and developing countries from 2000 to 2018. Our results suggest that an increase in unilateral uncertainty affects average trade costs in a heterogeneous manner, depending on whether the uncertainty originates from the importing or exporting country. Moreover, using a cross-sectional gravity approach, we show that an uncertainty shock directly reduces cross-border trade flows. The paper illustrates the suitability of the proposed modelling approach by means of two counterfactual scenario analyses in which we calculate the general equilibrium trade and welfare effects of uncertainty induced by the unexpected outcome of the Brexit referendum in 2016 and the outbreak of the COVID-19 pandemic in 2020.
Claudia Kettner, Michael Böheim, Mark Sommer (WIFO), Robert Gaugl, Udo Bachhiesl, Lia Gruber, Thomas Florian Klatzer, Sonja Wogrin, Kurt Kratena
WIFO Working Papers, 2023, (658), 25 pages
Commissioned by: Klima- und Energiefonds
Study by: Austrian Institute of Economic Research – Graz University of Technology
Online since: 13.01.2023 0:00
We analyse the (techno- and macro-)economic and distributive effects of a transformation to a renewable electricity system in Austria by 2030, as stipulated by the Austrian government. For the analysis, the macroeconomic model DYNK and ATLANTIS, a partial model of the electricity market, were expanded and linked. Four transformation scenarios conforming with the 100 percent renewable electricity target in Austria on a national balance are examined, integrated into a consistent scenario for the development of the European electricity system. Additionally, sensitivity analyses with respect to the gas price are performed. Although all scenarios achieve 100 percent RES-E on a national balance, the analysis shows that electricity from gas-fired power plants will still be needed in 2030 to balance variable renewable generation, to avoid grid congestion, and for heat generation from combined heat and power plants in winter months. Another main conclusion from the simulations is that the transition towards a renewable electricity sector is almost neutral from a socio-economic perspective. It does neither reveal harmful impacts nor lead to high multiplier effects from additional investment. With high natural gas prices in the sensitivity scenarios a decrease in GDP and household income, which might motivate redistributive policies, can be observed.
Robert Gaugl, Mark Sommer, Claudia Kettner (WIFO), Udo Bachhiesl, Thomas Florian Klatzer, Lia Gruber, Michael Böheim (WIFO), Kurt Kratena, Sonja Wogrin
WIFO Working Papers, 2023, (657), 22 pages
Commissioned by: Klima- und Energiefonds
Study by: Austrian Institute of Economic Research – Graz University of Technology
Online since: 13.01.2023 0:00
In this paper, we present a novel approach of linking the technical model of the continental European electricity system ATLANTIS with the macroeconomic model DYNK to provide comprehensive integrated power and socio-economic analyses. We thoroughly describe both models and explain the work that has been done to interlink the models. Further, we take Austria's generation expansion plans to transform the electricity sector to 100 percent renewable energy sources (national balance) by 2030 and analyse the effects of different CO2 prices on the electricity demand that couples the two models via a feedback loop. As the electricity price and demand are interlaced and influence each other, the linked models are solved iteratively until convergence, i.e., until the change of the electricity demand from the DYNK model does not affect the electricity price in the ATLANTIS model anymore. The results show that coupling a technical and macroeconomic model is possible and convergence is achieved after just a few iterations.
WIFO Working Papers, 2023, (656), 19 pages
Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Commissioned by: Klima- und Energiefonds
Study by: Austrian Institute of Economic Research – Graz University of Technology
Online since: 13.01.2023 0:00
In the "Fit for 55" package of July 2021, the European Commission proposed inter alia a revision of the energy taxation directive with the intent of increasing tax rates for fossil fuels that should contribute to achieving the EU's emission reduction targets for 2030. Since then, climate policy challenges in the EU have been amplified by sharp increases in electricity and gas prices mainly as a result of the war in Ukraine. Energy price spikes have led to the implementation of numerous compensation measures for households and firms in EU member countries. In this article, we provide an overview of the discussion on energy taxation in the EU and analyse compensation measures implemented during the energy crisis. We find that energy cost related compensation measures counter climate policy efforts. A stronger focus on vulnerable groups would have reduced the overall costs of measures and entailed stronger energy efficiency incentives.
WIFO Working Papers, 2023, (655), 20 pages
Online since: 10.01.2023 0:00
Der öffentliche Sektor als Produzent und Konsument von Gütern und Dienstleistungen spielt für Fortschritte in Hinblick auf die ökologische Entwicklung eines Landes eine wichtige Rolle. Das Working Paper beschäftigt sich mit der Erfassung der ökologisch relevanten öffentlichen Ausgaben in Österreich, wobei der Schwerpunkt auf klimarelevanten Ausgaben liegt. Die in Österreich verfügbaren Datengrundlagen bezüglicher öffentlicher Klima- und Umweltausgaben werden vorgestellt und hinsichtlich (der Grenzen) ihrer Aussagekraft diskutiert. Auch wird auf die Datengrundlagen zu den Kosten klimapolitischen Nicht-Handelns, zu ökologisch kontra-produktiven öffentlichen Subventionen sowie zu den für die grüne Transformation erforderlichen grünen öffentlichen Investitionen in Österreich eingegangen. Ziel des Beitrags ist es, einen möglichst vollständigen Überblick über die bestehenden Datengrundlagen zu ökologisch und insbesondere klimapolitisch relevanten öffentlichen Ausgaben in Österreich zu geben, Grenzen ihrer Aussagekraft aufzuzeigen und auf Datenlücken und -erfordernisse hinzuweisen. Schließlich werden auch Anforderungen hinsichtlich der institutionellen Rahmenbedingungen für die Implementierung öffentlicher Klimaschutzausgaben angesprochen.
WIFO Working Papers, 2022, (654), 54 pages
Supported by: Anniversary Fund of the Oesterreichische Nationalbank
Online since: 19.12.2022 0:00
The import competition literature suggests that Chinese industrial policies and technological trends have altered the nature of competition with China so that it does not take place on a level playing field anymore. Empirical evidence about firms' reactions in developed economies to competition with China is inconclusive, however. This paper studies how small, highly internationalised and specialised firms react to the growing penetration of Chinese exporters on their markets. We use a sample of Austrian manufacturing companies to explore the impact of increasing competition on changes in corporate strategy. We propose a novel indicator capturing import competition that highly internationalised companies face. We examine how firms adapt their search strategies related to technological capabilities and markets. While the exposure to Chinese competition has been on average relatively low, its impact on diversification choices has been significant. Companies exposed to growing Chinese competition are more likely to diversify their geographic markets, but less likely to diversify their product portfolio or broaden their competence base. These patterns are also reflected by changes in trade data.
Julia Bachtrögler-Unger (WIFO), Mathias Dolls, Carla Krolage, Paul Schüle, Hannes Taubenböck, Matthias Weigand
WIFO Working Papers, 2022, (653), 34 pages
Online since: 29.11.2022 0:00
We present a novel approach for analyzing the effects of EU cohesion policy on local economic activity. For all municipalities in the border area of the Czech Republic, Germany and Poland, we collect project-level data on EU funding in the period between 2007 and 2013. Using night light emission data as a proxy for economic development, we show that the receipt of a higher amount of EU funding is associated with increased economic activity at the municipal level. Our paper demonstrates that remote sensing data can provide an effective way to model local economic development also in Europe, where no comprehensive cross-border data is available at such a spatially granular level.
WIFO Working Papers, 2022, (652), 38 pages
Commissioned by: Public Employment Service Austria
Online since: 18.11.2022 0:00
Many European countries are facing the key challenge of integrating low-skilled jobless young people into the labour market. From 2018 to 2020, the Public Employment Service (PES) in Vienna tested a new model of intensified support ("case management"). The target group consisted of young unemployed persons with low formal qualifications who were drawing on social assistance. Based on the pilot project and a propensity matching approach, we show that the increase in staff significantly increased the intensity of the counselling. It led to an increase in job proposals and active labour market programme participation, as well as sanctions in the form of benefit suspensions for failure to keep PES appointments. In line with the goal, more of the young people were encouraged to take part in training and further education instead of being quickly placed in an unskilled job. However, in the three-year follow-up period, the intensified counselling did not (yet) have a significant effect on the overall extent of integration into employment. Regarding post-unemployment job quality, we find no effects on wages at the start of a job.
Constantinos Syropoulos, Gabriel Felbermayr (WIFO), Aleksandra Kirilakha, Erdal Yalcin, Yoto V. Yotov
WIFO Working Papers, 2022, (651), 46 pages
Online since: 17.11.2022 0:00
This paper introduces the third update/release of the Global Sanctions Data Base (GSDB-R3). The GSDB-R3 extends the period of coverage from 1950-2019 to 1950-2022, which includes two special periods – COVID-19 and the war between Russia and Ukraine. The new update of the GSDB contains a total of 1,325 cases. In response to multiple inquiries and requests, the GSDB-R3 has been amended with a new variable that distinguishes between unilateral and multilateral sanctions. As before, the GSDB comes in two versions, case-specific and dyadic, which are freely available upon request at GSDB@drexel.edu. To highlight one of the new features of the GSDB, we estimate the heterogeneous effects of unilateral and multilateral sanctions on trade. We also obtain estimates of the effects on trade of the 2014 sanctions on Russia.
WIFO Working Papers, 2022, (650), 40 pages
Online since: 16.11.2022 0:00
This paper studies the interplay of integration into EU value chains and industrial development measured by labour productivity. Our integration indicator measures value chain trade within the Single Market relative to global value chain networks. Using a simultaneous equation model, we find an overall positive effect of integration on labour productivity, which is driven by upstream integration. Highly productive industries rather seek global value chain trade than regional integration, though. Better domestic institutions facilitate EU integration, although they favour industries with less complex product portfolios and lower levels of knowledge cumulativeness.