Search

This paper examines, from the perspective of Post-Keynesian economics, the effects of Foreign Direct Investment (FDI) on the employment rate in 18 post-transitional European countries from 1995 to 2021. Using a two-step system Generalised Method of Moments (GMM) panel data estimator, we test the hypothesis that the employment impact of investment depends on the interaction of FDI and domestic investment in terms of crowding-in and crowding-out relationships, assuming that this relationship is sensitive to the sectoral distribution of FDI stock. Our findings suggest that the reallocation of FDI inflows from the manufacturing sector to the less labour intensive financial and information and communication technology (ICT) sectors tends to reduce the employment effect of FDI both directly and indirectly by reducing the magnitude of the crowding- in effect of FDI on domestic investment. The outcome of our study is of great interest to economic policy makers. If foreign investment displaces domestic investment and reduces employment in high value-added sectors, policies intended to attract foreign capital could be challenged and undermined. Otherwise, if foreign and domestic investment in sectors with high added value are complementary, it justifies policies aimed at attracting foreign investment.

The paper provides insight into the relationship between foreign and domestic investment, and its effect on income distribution in the post-communist EU member states. The analysis is conducted using the general method of moment (GMM) estimator on panel data of the 10 Central and Eastern European (CEE) new member states from 1993-2017. The results reveal that a greater level of foreign direct investments (FDI) contributed to eliminating the negative effects of domestic investment on income distribution, particularly mass layoffs and the transfer of wealth into the hands of a small economic and political elite. It leads to the conclusion that FDI has played a significant role in reducing income inequality and rebuilding the middle class in the post-communist EU member states.

This paper provides an explanation of income dynamics in the posttransition EU countries from the perspective of institutional changes. As a result of seemingly-unrelated regressions analysis on panel data from 1990-2014, we find robust evidence of the relationship between income shares and institutional reforms. The impact of reforms on the top and below-average income shares is negative, whereas this effect on above above-average income share is positive. Decline of income share for the richest class during the post-transitional period can be attributed to the loss of privileges associated with the existence of an institutional vacuum in the first years of transition. Although transition increased wages for workers at the end of income distribution, the job losses had a stronger effect than wage increase, so the overall effect on income share of this group is negative. The winners of reforms appear as the workers with above-average income, whose skills are complementary to the changes instituted by transition to market economy and integration in the EU. [Project of the Serbian Ministry of Education, Science and Technological Development, Grant no. 47010]

Institutionalist and neoclassical views on income distribution are characterized by different assumptions about the inequality - savings - economic progress relationship. By questioning the neoclassical arguments, the paper promotes the attitude that economic progress results not from savings as “abstain from current consumption” but from society’s ability to continuously develop technological arts and crafts. Empirical analysis of panel data from OECD countries using a dynamic GMM model shows a positive relationship between income concentration and aggregate savings, but there is no robust evidence of a positive relationship between aggregate savings and economic progress. Furthermore, we find robust evidence that technology and human capital are the key determinants of economic progress, implying that accumulation of physical and human capital is more important for economic progress than accumulation of financial capital.

The purpose of this paper is to shed more light on the effects of changes in quality of economic, legal and political institutions on income inequality in the advanced countries over the last two decades. Using the robust panel model on a sample of 21 OECD countries, it is found that the impact of elitization of society is more pronounced than the impact of unionization on income redistribution, but both effects are less expressed in comparison to the influence of institutional changes on redistribution. In a globalized economy, insufficient redistribution and high inequality might be interpreted as the consequence of institutional inertia to disruptive technological and business changes.

The aim of this paper is to point out the limitations of conventional approaches, articulated via political processes, in reducing income inequality. Using the panel data methods, on the sample of 21 affluent OECD countries in the period from 1980 to 2011, it is observed that the increase in labour productivity as well as preferences of voters to parties that advocate greater redistribution, contrary to common perception, not necessarily lead to reduction in income inequality. Increasing dominance of big capital in the field of technological progress changes the conventions about contribution of workers to labour productivity. The result is a weakening of workers’ bargaining power in relation to employers as well as increase in gap between labour productivity growth and real wage growth, which both lead to increase in income inequality. In comparison with the other political parties, it seems that the right-wing parties are more efficient in using voters’ support to implement their concept of the welfare state, which contributes to maintaining the high market-generated income inequality. Such situation could be explained that de jure power of the government depends on election results, whereas de facto power depends on the support of so-called globally-oriented super elites. [Projekat Ministarstva nauke Republike Srbije, br. 47010]

The political economy approach that entails critical arguments in relation to the processes of migration in neoliberal terms is developed in the paper. Starting with the account that migration covers as broad issues as politics, economics and population dynamic, the authors address the issue of migration in the political economy circuits of neoliberalization. In fact, the main line of argument is connected to the political economy as the relevant discursive frame and explanatory principle for the articulation of the complexity of migration. Critical arguments relating to the processes of migration in the neoliberal context thematize the mechanism of implemented flexibilisation and deregulation of labor. Demographic dynamics is essential in this context, but the authors intend to identify those political economy processes that lead to high precariousness, to various forms of temporary labor which are closely associated with forced labor forms. The category of forced labor is emphasized in the contemporary forms of migration, because this mode of labor facilitates the migration throughout the world. Furthermore, the authors point out the contradictory position of the state in relation to the migration-processes and analyse the authoritarian statism. This argumentation leads to articulation of the contradictory position of neoliberalization. The neoliberal discourses bring out the critical stance concerning the supremacy of the state, but it plays a key role in the regulation of migration. The state exposed to migration is faced with the contradictory demands. The globalization indicates the world without borders but is faced with the same contradictions. It is no coincidence that the intention of the reconceptualizations of globalization are interested in promoting global public goods. The processes of privatization in the sphere of the regulation of migration sharpen the contradictions of migration in the context of neoliberalization. The political economy approach is faced with the tension between the two approaches. The first proposed regulation and workforce management at the supranational level. The other remains in the framework of “methodological nationalism”: the appropriate starting point is the national state. Given the fact that structural inequalities should be recognized at a global level, and that processes of migration show that there is a certain hierarchical global flow in the context of the dynamics of workforce, the first approach proves to be inadequate. In other words, the second approach could not articulate the relevant tendencies. Accordingly, the political economy approach that intends to include complex determination regarding the migration should integrate the national trends in the supranational framework. But, proper research should take into account that globalization and its complex order consist of a number of interventions and interferences. This means that the aforementioned approach must develop sufficiently complex methodology in order to articulate its selected subject.

This inquiry considers some effects of migration on the labour markets and the welfare systems found in the EU-15, and from the perspectives of sustainability of the current welfare state regimes. Our inquiry aims to determine whether and to what extent different approaches in regulation of migration flows between the new and old member states are compatible with related economic and demographic findings. Within this context, our research considers regulations affecting migration flows. Our findings suggest that some effects of migration from the EU8+2 on the labour markets and social protection systems found in the EU-15, both with respect to level and structure, do indeed generate effects on migration, especially considering whether migration is based upon economic or welfare decisions. In addition, our inquiry considers perspectives upon restrictive versus liberal migration policies.

This inquiry analyzes how political orientations shape welfare states and labour market institutions when seeking to reduce poverty. In order to identify effects of these two key variables, we conduct a panel regression analysis that includes two poverty measures: poverty rates before and after social spending. This inquiry considers 14 EU countries, and in the period from 1995 to 2008, which are grouped according to welfare state regimes. We consider Social Democratic, Corporatist, Mediterranean and Liberal welfare state regimes. Panel regression results indicate that political orientation engenders no significant statistically measurable effects on poverty rates before social spending. Effects register, however, as significant when considering poverty rates after social spending. With respect to the first set of results, we advance two key explanations. First, we note a longer period of time is necessary in order to observe actual effects of political orientation on market generated poverty. Second, political parties with their respective programs do not register as influential enough to solve social problems related to income distribution when taken alone. Influences register as indirect and are expressed through changes in employment rates and social spending. The second set of results support the hypothesis that a selected political regime does indeed contribute to poverty reduction. In sum, political orientation and political regime does indeed affect poverty through welfare state institutions, as well as through labour market institutions.

The authors of this argumentative article emphasize that the range of the current crisis cannot be depleted in the diagnosis which is based on cyclic consideration. It is both systematic and structural, which is derived from the genesis and the modus of neoliberalism, which has become dominant during the previous decades. Other than that, it is emphasized that the current crisis is 'great', because it forces relevant actors to face the structural characteristics of contemporary shareholder-capitalism. The crisis also puts to a test the self-reflection of the economic science which faces certain deficits. The authors believe that, given the tendencies in today's economy, there can be different scenarios for exiting the crisis and projecting a new modus of capitalism in the following period. Having in mind the openness of the present and the uncertainty of the future, the authors describe those scenarios without projecting which one of them will be dominant.

Major aim of the paper is to explain how Keynesian multiplier model can be used to estimate the effect of expenditure changes on regional economy especially regional income and employment. Among many factors, marginal propensity to consume locally produced goods plays a crucial role in determining regional multiplier effects. A critical feature of the regional multiplier is an extent to which expenditure injections leak out of a region and special attention has therefore been paid to identifying the nature of this leakage. Regional multiplier analysis has undoubtedly proved to be of a substantial value not only for defining and operating regional policy but also in providing an explanation of how regional economies actually function. It nevertheless has its weaknesses, the primary one being that it does not provide detailed information of economic effects of the expenditure injections. As a response to this criticism, regional econometric models which provide far greater details have been developed.

Copyright of Stanovništvo is the property of Demographic Research Center of Institute of Social Sciences and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)