Wednesday, April 29, 2020 at 11.00-12.00 via MS Teams
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Karsten Staehr (Tallinn University of Technology)
Export Performance and Capacity Pressures in Central and Eastern Europe
This paper investigates to which extent various measures of capacity pressure, or available production capacity, may predict the dynamics of exports from the EU countries in Central and Eastern Europe. The analysis uses annual panel data for the 11 countries from 2001 to 2019. Reduced form estimations reveal that cost competitiveness measures have little or no predictive power for the whole time sample, though some for the period after the global financial crisis. The measures of capacity pressure are the capacity utilisation in industry, the unemployment rate and the output gap, and each of the measures is a robust predictor of future export dynamics irrespective of the time sample. The results are robust to various changes in sample, control variables and specification, and also hold in panel VAR models.