Transcript Prezentacja programu PowerPoint

Quantitative assessment of
the impact of the NDP/NSRF 2007-13 using a
macroeconomic model for
the Czech Republic
Project 05/5
Ministry of Regional Development – Czech Republic
Prague, 23 November 2006
Final presentation
GEFRA
EMDS
IREAS
1
Report: Table of contents, I
1.
Overview about the results
2.
Modelling the Czech Economy
3.
The HERMIN modelling framework
4.
The new HERMIN model for the Czech Republic
4.1
Some characteristics of the Czech Economy
4.2
Some characteristics model results (equations)
2
Report: Table of contents, II
5. The NSRF Evaluation
5.1
5.2
5.3
How to analyse the Structural Fund interventions
(demand and supply-side effects)
Implementation into HERMIN
Some detailed results
6. The future of the Czech NSRF Evaluation
A series of technical annexes
3
1. Overview of the results
• During the implementation phase 2007-15 (nine
years instead of the formal seven year SF
interventions) two separate mechanisms work:
– The demand side effect (mainly through programmes of
public and accompanying private investment)
– The supply-side effect which work through the build-up
of stocks of infrastructure, human capital and R&D.
• After the termination of the programmes in 2015
the demand side effects will vanish rapidly but the
supply-side effects will remain for a longer period.
4
1. Overview of the results, continued
• When measuring the impact of the NSRF it is important to
distinguish between
– Level effect
– Growth effect
• The Level-effect compares the economic outcome relative
to a baseline-scenario and can be expressed as a percentage
or absolute difference from the baseline.
• The Growth-effect compares the different growth rates
within one scenario with the growth rates in a baseline
scenario.
• Even if there are large level effects the growth rates can be
very similar.
5
1. Overview of the results, continued
Cohesion policy 2007-2013: indicative financial allocations (million EUR, 2004 prices)1
REGIONAL
COMPETITIVENESS AND
EMPLOYMENT OBJECTIVE
CONVERGENCE OBJECTIVE
België/Belgique
Ceska Republika
Danmark
Deutschland
Eesti
Ellas
Espana
France
Ireland
Italia
Kypros
Latvija
Lietuva
Luxembourg
Magyarorszag
Malta
Nederland
Österreich
Polska
Portugal
Slovenija
Slovensko
Suomi-Finland
Sverige
United Kingdom
Bulgaria
Romania
Statistical
Phasing in
Phasing out
Cohesion Fund
Convergence
7.830
15.149
10.553
1.992
8.379
18.727
2.838
3.770
1.019
3.289
3.250
5.779
1.434
584
4.495
18.867
388
420
879
363
579
193
1.363
2.034
2.647
3.965
7.589
252
12.654
495
Regional
competitiveness
and employment
1.268
373
453
8.370
3.133
9.123
261
4.761
45
19.562
2.722
1.239
3.433
39.486
15.240
2.407
6.230
1.865
159
0
1.477
914
254
407
436
491
2.436
2.015
5.769
158
883
399
935
1.446
5.349
3.873
11.143
Not allocated
TOTAL
61.558
177.083
12.521
10.385
38.742
EUROPEAN
TERRITORIAL
COOPERATION
OBJECTIVE
TOTAL
1
173
346
92
756
47
186
497
775
134
752
24
80
97
13
343
14
220
228
650
88
93
202
107
236
642
2.019
23.697
545
23.450
3.058
18.217
31.536
12.736
815
25.647
581
4.090
6.097
58
22.451
761
1.696
1.301
59.698
19.147
3.739
10.264
1.532
1.682
9.468
159
404
6.047
17.317
392
392
7.750
308.041
Figures result
from the application
of the methodology
agreed by the
European Council in
December 2005.
They are inclusive of
all additional
provisions decided
by the European
Council. Technical
assistance at the
initiative of the
Commission is
included in the
national allocations.
Amounts under the
"European territorial
cooperation"
objective include the
contribution of the
ERDF to the
financing of crossborder and seabasin programmes
on the external
borders of the
Union. Figures for
Bulgaria and
Romania are without
prejudice to the
date of accession of
these countries
6
1. Overview of the results, continued
Revised expenditure profile of the NSRF (euro million per year)
And as % of the NSRF per year
7
1. Overviewof the results, continued
Effects of the NSPF on the real Czech GDP
Growth rates effect,
as % difference
Moderate differences up to one percent
during the implementation phase and a
significant difference in 2016
Level effect compared to the baseline
as %-difference
Gradually increasing impact on the level
of GDP compared to the baselinescenario (without NSRF), even in 2020
the level about 2% percent higher then
without the NSPR
8
1. Overview of the results, continued
• In 2007 the initial effect on employment compared to
the no-NSRF baseline is just over 20 thousand, given
the initial low injection by the SF
• In 2013 this has built up to 196.000 and is still
178.000 in 2015.
• In 2020 total employment is still 29.000 higher.
• The NSRF introduces extra productivity gains of
around 1% over the baseline. This is notable since
even in the baseline there is are substantial increases
in productivity.
9
2. Modelling the Czech Economy
• Very limited modeling research of the Czech
economy
• Only recently policy-making institutions (MoF or the
Central Bank) set-up a structural approach to
economic modeling
• Not all material is in the public domain!
• Lack of long data series is a serious problem
• Models developed have a main focus on:
– Monetary and fiscal policy issues and
– Long-term growth, structural change and
convergence prospects.
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3. The HERMIN Modelling Approach
A pictorial outline of the model
Consumption function
Wage bargaining
Factor demands
Behavioural
equations
influenced
by theory
Expenditure (GDE)
Income (GDI)
[6] Behavioural and
identity equations
GDP
Output (GDP)
[1] National
accounting
Framework
Manufacturing (T)
Identities adding up,
definitional & closure
productivity
Building (BC)
PSBR
Output = Expenditure used
to determine net trade balance
(NTS = GDP - GDA)
where GDA = C + G + I + DS
HERMIN
[2] Output
Utilites
Market services (N)
Other market services
[5] Model as
integrated system
Agriculture
Agriculture (A)
Output = Income
used to determine
corporate profits
(IYC = GDP - YWI)
Fishing
General Government
Non-market services (G)
Public sector
Private consumption
Borrowing requirement
Public consumption
Debt accumulation
[4] Income
[3] Expenditure
Investment
Stock changes
Corporate sector
Household sector
Health
Education
Revenue
Expenditure
Forestry
Private sector
Exports
Imports
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Important economic relationships
• Output: Exposed and sheltered sectors
• Production inputs: Labour and capital
• Output prices: Price taking and price making
• Wage determination: Bargaining and sectoral transmission
• Labour supply: natural growth, migration, participation
• Consumption: Is there a liquidity constraint?
• Trade: Modelled as a net trade balance (exports minus imports)
• Government: General government expenditure, revenue and
balance
12
What determines sectoral output?
• Manufacturing: Local & external demand;
competitiveness
• Market services: Local demand
• Agriculture: Productivity
• Government: Public employment
13
What determines production inputs?
• Output
• Cost of labour compared to cost of capital
• Technical progress
14
What determines output prices?
• Manufacturing: World prices, labour costs
• Market services: Labour costs
• Building and construction: Labour costs
• Agriculture: Common Agricultural Policy
(CAP)
15
What determines wage rates?
•
•
•
•
Consumer prices
Output prices
Productivity
Unemployment rate
16
What determines labour supply?
•
•
•
•
Population growth, but more specifically
Working age population growth
Participation rate
Net migration flows
17
What determines household consumption?
• Income, but more specifically
• Household income, but more specifically
• Household disposable income
• Wealth??
18
What determines trade?
• National data on exports and imports are
available
• Net regional trade balance (NTS) determined as
production (GDPM) less regional absorption
(GDA)
NTS = GDPM - GDA
19
What determines general government
revenue and expenditure?
• Revenue: Tax bases and tax rates
• Expenditure: Policy decisions
(discretionary) as well as policy rules
(automatic)
20
Model calibration
• “Old” EU models: Simple econometrics (OLS),
using data for period 1980-2004
• Czech national model: Curve-fitting and
selective parameter imposition, using data for
period 1995-2004
• Other approaches to calibration:
(i) Extend data sample, using pre-1995 (or
even pre-1989) data?
(ii) Panel data from group of countries
(imposing cross-country constraints)
21
HERMIN documentation
1. Data-based description of the economy
2. Theoretical underpinnings of the HERMIN
modelling framework
3. Calibration of the behavioural equations
4. Model testing: simulations and shocks
5. Data appendix, model listing: public
domain
6. Standardised software:
22
Uses of a HERMIN-type model
1.
2.
3.
4.
Preparation of economic forecasts
General economic policy analysis
NSRF-related policy analysis
Design/evaluation of national industrial
strategies
23
Preparation of economic forecasts
• Short-term national forecasts (12 months)
are widely available
• Medium-term national forecasts
(up to 5 years) are very rare
• Long-term economic forecasts of any kind
are not usually available
24
4.
The new HERMIN model
for the Czech Republic
Shocking the model to test its properties
25
26
27
5. The NSRF Evaluation
How to analyse the SF interventions
28
Construction phase vs Use phase
for cohesion policy
• During construction phase, there will be
large demand-side impacts. These vanish
after completion (i.e., after 2013 for next
NSRF)
• Increased stocks of infrastructure, human
capital and R&D can generate long-tailed
supply-side impacts
• The size of the supply-side impacts depend
on the appropriateness and effectiveness
of the NDP
29
Inserting a CSF/NDP into HERMIN
• The three aggregate elements of a CSF
(a) Physical infrastructure
(b) Human resources
(c) Direct aid to productive sector
• Conventional Keynesian expenditure and
income impacts (role of policy multiplier)
• Additional externality effects on output
and productivity
30
Implementation
in evaluation
versus Use phase
• During the implementation phase, there
will be large demand-side impacts. These
vanish after completion (i.e., after
2013/15 for next NSRF)
• Increased stocks of infrastructure, human
capital and R&D can generate long-tailed
supply-side impacts
• The size of the supply-side impacts depend
on the appropriateness and effectiveness
of the NSRF
31
Physical infrastructure: PI
• Demand-side impacts (implementation):
PI  IG  I (total investment)
 (Keynesian multiplier)
 impact on GDP
• Supply-side impacts (mainly postimplementation):
PI  increased stock of infrastructure (KPI)
 boost to output/productivity
32
Human resources: HC
• Demand-side impacts (implementation):
HC  Income & Public expenditure
 Keynesian multiplier
 GDP
• Supply-side impacts (mainly postimplementation):
HC  stock of human capital (KHC)
 boost to output/productivity
33
Research and Development
• Demand-side impacts (implementation):
R&D  I (total investment)
 (Keynesian multiplier)
 impact on GDP
• Supply-side impacts (mainly postimplementation):
R&D  increased stock of R&D (KRD)
 boost to output/productivity
34
A serious methodological challenge
• Ex-ante impact analysis of “yet-to-beimplemented” NDPs
• Is the NSRF appropriate? How effective
will be the implementation?
• Strict monitoring and evaluation can help,
but do not guarantee success
35
Infrastructure, human capital and R&D:
interaction effects
• The links between infrastructure, human
capital and R&D are difficult to measure.
• A parallel improvement in all three is
probably necessary
• But we cannot say much about the
optimum balance between them within an
NSRF
36
Where do the spillover measures
come from?
• International literature on the impact of PI
and HC on output and productivity
• Comprehensive ESRI survey
• Recent survey of HC impacts by IFS
• Problems:
very little from cohesion countries!
nothing from CEE countries
no agreement on size of impacts!
no agreement on level versus growth
impacts!
37
Presenting model-based
cohesion policy impacts
• Difficult to define an appropriate
counterfactual baseline scenario.
• Difficult to assign values to the spill-over
(or externality) elasticities to different
countries in he absence of empirical
research.
• Macro impacts are complex, and GDP is an
imperfect indicator
38
5. The NSRF Evaluation
39
40
41
42
43
44
45
46
47
48
6. The future of the Czech NSRF Evaluation
Summing up:
• the NSRF interventions will have a large impact on the
level of GDP during the implementation phase up to 4.5% of
GDP until 2015 compared to a baseline scenario and
• in the long-run the level of GDP will be around 1.5% higher
• there will be extra productivity gains and
• employment will be higher then in the non-NSRF scenario.
Altogether the SF interventions will have a positive
impact on convergence, the size of which will
depend on the quality on the interventions.
49
6. The future of the Czech NSRF Evaluation
• These outcomes are based on a set of specific
assumptions
– Specific externalities for infrastructure, R&D and human
capital
– These externalities are high when the quality of the
interventions are high
– The likely impact of other issues like the Single Market,
enhanced FDI etc. are not explicitly modeled.
– These linked to the Structural Funds will further
enhance convergence.
50
6. The future of the Czech NSRF Evaluation
Future developments:
• In order to use the HERMIN CZ macro-model as an
instrument for policy evaluations, it has to updated on a
regular basis.
• During the implementation phase, and when the exact
content of the measures is known, a new and improved
classification of funding allocation into PI, HR and APS
should be done.
• In the absence of a comprehensive micro-economic
evaluation, the spillover-elasticities have to be assumed on
bases of the international literature.
51
6. The future of the Czech NSRF Evaluation
Gains from these improvements:
• As the NSRF is implemented can how we fine-tune the
programme (at the Mid-term Evaluation stage) to optimise
its impact on convergence.
• To do this one must develop a micro-evaluation alongside
the macro evaluation of the type described by this report.
• The characteristics of micro and macro evaluation
techniques are set out in the following slide.
52
Micro (bottom-up)
Macro (top-down)
Level of disaggregation
High (individual projects)
Low (sectoral aggregates,
whole economy)
Use of theory
Weak (judgemental, CBA)
Strong (macroeconomics)
Model calibration
Judgemental/informal
Scientific(?)/econometric
Policy impacts
Informal/implicit/ranking/som
e quantification
Formal/explicit/quantified
Treatment of
externalities
Limited or ignored
Included/explicitly modelled
53
How can we know if EU
cohesion policy is successful?
Integrating micro and macro approaches to the evaluation
of Structural Funds
(Bradley, Mitze, Morgenroth & Untiedt, March 2006)
Paper available on:
www.gefra-muenster.de
54
55
56
Annex to the Presentation
57
Are HERMIN-based NDP impacts robust
and reliable?
• Demand impacts: role of Keynesian
multiplier (crowding out? Rational
expectations? QUEST versus HERMIN)
• Supply impacts: role of externality (or
spillover) effects
• Well-designed NSRF: large spillover effects
• Poorly-designed NSRF: small spillover
effects
58
Can we give a “point” estimate
of NSRF impacts?
• Almost certainly not!
• But based on additional evidence (CBA,
qualitative review of NSRF, etc.), we can
probably suggest whether the spillovers
are likely to be high or low.
• As experience accumulates, we can move
towards more precise estimates of the
spillover parameters, and more precise
long-term NSRF impacts
59
How can convergence become
stronger and self-sustaining?
• There must be an initial “cluster” of activities,
supported by special incentives and local specialised
inputs (trained labour force): role of industrial
strategy
• The increased local availability of skilled workers
facilitates further growth of cluster: role of human
capital
• Spillovers of information and “learning-by-doing”
encourage further cluster growth: role of physical
infrastructure
• National and regional policy stability, and consensual
social partnership ensures efficiency is accompanied by
equity, and facilitates self-sustaining regional growth
60
Porter’s Diamond of competitive advantage
61