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Wintersemester 2019/20Summer Term 2017
22.10.2019 : 16:27 : +0200

Seminar in International Economics im Wintersemester 2019/20

 

Das FIW bietet gemeinsam mit dem wiiw regelmäßig Vorlesungen in Form eines Seminars in "International Economics" an.

Ort: wiiw Wiener Institut für Internationale Wirtschaftsvergleiche, Rahlgasse 3, 1060 Wien

Offshoring and Non-Monotonic Employment Effects across Industries in General Equilibrium

 

Thursday, 10 October 2019, 3:00 p.m.
wiiw, Rahlgasse 3, 1060 Vienna

 

 

Offshoring and Non-Monotonic Employment Effects across Industries in General Equilibrium

Michael Irlacher, Department of Economics, Johannes Kepler University Linz

 

The presentation is based on a paper co-authored with Daniel Baumgarten and Michael Koch.

We address the mismatch between existing theoretical models and standard empirical practice in the analysis of the labor market effects of offshoring. While theory focuses on one-sector or two-sector models, empirical studies exploit variation in offshoring across a large number of industries, typically including a linear offshoring term in the analysis. Thereby, these studies implicitly assume a monotonic relationship between offshoring and labor market outcomes and ignore general-equilibrium effects across industries. We analyze the effects of offshoring across a continuum of industries with different shares of offshorable tasks that are linked through labor and capital markets in general oligopolistic equilibrium (GOLE). Our main result is that offshoring generates a hump-shaped pattern of employment changes across industries. While the relocation effect reduces employment in offshoring-intensive industries, labor demand in industries with a high prevalence of domestic production falls because of rising domestic wages and firm exits in general equilibrium. In the empirical part, we test the non-monotonic employment effects across industries in response to an offshoring shock by focusing on Germany after the fall of the Iron Curtain. We find strong empirical support for the hump shape in the changes of employment across industries with different scopes for offshoring, which is almost entirely due to the extensive margin, underscoring the importance of establishment entry and exit. Finally, we discuss important implications for empirical and theoretical research arising from our study.
 

Paper and Powerpoint presentation, as far as available, are posted on this page after the seminar.

Keywords: Offshoring and employment; Task offshoring; Industry heterogeneity; General oli- gopolistic equilibrium

JEL classification: F12, F16, F23, J23, L13

 

We kindly ask you to register for the event. Participation is free of charge.

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Price Competitiveness in the European Monetary Union

Donnerstag, 31. Oktober 2019, 15:00 Uhr

wiiw Rahlgasse 3, 1060 Vienna

 

Price Competitiveness in the European Monetary Union

Andreas Eder, BOKU Vienna

 The presentation is based on a paper co-authored with Wolfgang Koller and Bernhard Mahlberg.

 

This  paper  studies  the  persistent  producer  price inflation  differentials  within  the  European Monetary Union. By applying a decomposition procedure within the input output framework, the drivers of sectoral producer price inflation in a representative sample of member states are re-vealed. We find that in the pre-crisis period (2000-2008) the inflation differentials in manufactur-ing and market services of all countries vis-à-vis Germany were consistently positive resulting in a loss of price competitiveness for all economies. Manufacturing and market service sectors of many countries continued to lose price competitiveness, though to a lesser extent, also during the crisis period (2009-2014). We observe that differences in unit labour cost developments across countries constitute an important driver, especially in the pre-crisis period. Other drivers, such as import costs, intermediate input costs and operating surpluses also contribute, in particular during the crisis period.

Andreas Eder is Assistent Professor at the Institute for Sustainable Economic Development at the University of Natural Resources and Life Sciences and Institute for Industrial Research, Vienna (BOKU).

Powerpoint presentation, as far as available, will be posted on this page after the seminar.

Keywords: European Integration, Producer Price Inflation, Real Exchange Rates, Gross Output Price Deflators, National Accounts

JEL classification: D57, E31, F15, O57

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