Following the introduction of the euro in 1999, countries in the South experienced large capital inflows and low productivity We use data for manufacturing firms in Spain to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor across firms, and a significant increase in productivity losses from misallocation over time We develop a model of heterogeneous firms facing financial frictions and investment adjustment costs The model generates cross-sectional and time-series patterns in size, productivity, capital returns, investment, and debt consistent with those observed in production and balance sheet data We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive We conclude by showing that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway

Capital Allocation and Productivity in South Europe

Starting in the early 1990s, countries in southern Europe experienced low productivity growth alongside declining real interest rates. We use data for manufacturing firms in Spain between 1999 and 2012 to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor, and a significant increase in productivity losses from capital misallocation over time. We develop a model with size-dependent financial frictions that is consistent with important aspects of firms’ behavior in production and balance sheet data. We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a significant decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive. We show that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway.

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This paper introduces time-varying grouped patterns of heterogeneity in linear panel data models. A distinctive feature of our approach is that group membership is left unspecified. We estimate the parameters of the model using a “grouped fixed-effects” estimator that minimizes a least-squares criterion with respect to all possible groupings of the cross-sectional units. We rely on recent advances in the clustering literature for fast and efficient computation. Our estimator is higher-order unbiased as both dimensions of the panel tend to infinity, under conditions that we characterize. As a result, statistical inference is not affected by the fact that group membership is estimated. We apply our approach to study the link between income and democracy across countries, while allowing for grouped patterns of unobserved heterogeneity. The results shed new light on the evolution of political and economic outcomes of countries.

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Grouped Patterns of Heterogeneity in Panel Data

This paper explores the extent to which “zombie” firms – defined as old firms that have persistent problems meeting their interest payments – are stifling labour productivity performance. The results show that the prevalence of and resources sunk in zombie firms have risen since the mid-2000s and that the increasing survival of these low productivity firms at the margins of exit congests markets and constrains the growth of more productive firms. Controlling for cyclical effects, cross-country analysis shows that within-industries over the period 2003-2013, a higher share of industry capital sunk in zombie firms is associated with lower investment and employment growth of the typical non-zombie firm and less productivity-enhancing capital reallocation. Besides limiting the expansion possibilities of healthy incumbent firms, market congestion generated by zombie firms can also create barriers to entry and constrain the post-entry growth of young firms. Finally, we link the rise of zombie firms to the decline in OECD potential output growth through two key channels: business investment and multi-factor productivity growth

The Walking Dead?: Zombie Firms and Productivity Performance in OECD Countries

International trade patterns at the product level are surprisingly dynamic. The majority of trade relationships exist for just a few, often only two to four, years. In this paper, I examine empirically the duration in German import trade at the 8-digit product level from 1995 to 2005. I find that survival probabilities are affected by product type, exporter characteristics and market structure. Specifically, I show that the duration of exporting a product to Germany is longer for differentiated products, for products with a low elasticity of substitution, for products obtained from a large exporter that is geographically close to the German market, and for products in markets with increasing import demand.

Die Another Day: Duration in German Import Trade

In this paper, we use administrative data on tax returns to characterize the distributions of before and after-tax income, tax liabilities, and tax credits in Spain for individuals and households. We use the most recent available data, 2015 for individuals and 2013 for households, but also discuss how the income distribution and taxes have changed since 2002. We also estimate effective tax functions that capture the underlying heterogeneity of the data in a parsimonious way. These parametric functions can be used to calculate after-tax incomes in surveys where this information is not directly available, and can also be used in quantitative work in macroeconomics and public finance.

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The Spanish Personal Income Tax: Facts and Parametric Estimates

This article analyses recent developments in the average effective retirement age in light of the 2011 reform and the different forms of retirement. The analysis shows, first, that the effective retirement age has tended to increase in recent years as a result of the net increase in the retirement age within all forms of retirement, which has more than offset the opposite effect prompted by the growing share of the various forms of early retirement. Second, the impact of the 2011 reform, from the standpoint of retirement age, seemingly remains limited, as the percentage of new retirees who take retirement on the basis of legislation prior to the reform is still significant, and the statutory retirement age for workers with sufficiently lengthy contribution histories is still 65. Third, on average, workers who take some form of early or partial retirement have the lowest retirement age, although they generally have longer contribution periods and higher regulatory bases.

Effective retirement age: recent developments

Spanish Abstract: El deficit del Sistema de la Seguridad Social espanol alcanzo un 1,5 % del PIB en 2015, que contrasta con el superavit observado antes de la crisis economica, del 2,2 % del PIB en 2007. Este deterioro se debe, sobre todo, a un incremento del gasto en pensiones contributivas (en % del PIB), como resultado del incremento de la tasa de dependencia, el aumento de la tasa de sustitucion de las pensiones y la caida de la tasa de empleo. Mas alla de esta situacion de corto plazo, el sistema publico de pensiones espanol se enfrenta, como los del resto de los paises desarrollados, a retos importantes causados por la expectativa de un aumento significativo de la longevidad y, consecuentemente, de la proporcion de la poblacion en edad de jubilacion. En este contexto, este documento tiene como objetivo contribuir al debate sobre la situacion del sistema de pensiones mediante el analisis de su evolucion reciente, las previsiones hacia el futuro, que incorporan el impacto de las ultimas reformas, y los retos pendientes.English Abstract: The Spanish Social Security System’s deficit rose to 1.5% of GDP in 2015, in contrast to a pre-crisis surplus of 2.2% of GDP in 2007. This deterioration is primarily due to an increase in contributory pension spending (as a % of GDP), as a result of the rise in the dependency ratio, the increase in the pension replacement rate and the decline in the employment rate. Beyond this short-term situation, the Spanish public pension system, as is the case in other developed countries, faces major challenges arising from expectations of significant longevity gains and the attendant growth of the retirement-age population. In this context, this paper aims to contribute to the debate on the situation of the pension system through an analysis of its recent evolution, forward-looking projections that include the impact of the latest reforms and the challenges outstanding.

The Spanish Public Pension System: Current Situation, Challenges and Reform Alternatives (El Sistema Público De Pensiones En España: Situación Actual, Retos Y Alternativas De Reforma

This article presents a series of exercises which analyze the sensibility of three statistical packages of seasonal adjustment and time series The central point of this text consists of the analysis of the variation of the quarterly rates against the immediately previous quarter in the series of the Gross Domestic Product (GDP) at Brazilian market prices Considering the importance of this rate for the economic planning, the conditions under which exchanges in the taxes may occur must be taken into consideration The exercise carried out has evaluated the behavior of three software’s (X12-ARIMA, TRAMO/SEATS and X11), adopted by important institutions dealing with statistics and recommended by international manuals on Quarterly National Accounts Two experiments were carried out with the purpose of verifying the sensibility of each method The first one took into consideration the introduction of new quarters as from the generation of alternative scenarios and the second one compared the results initially projected by the models with the rates actually observed The difference between adjusting a series of the GDP directly (direct method) and obtaining it through the linear combination of its components (indirect method) has also been analyzed BIBLIOGRAFIA BARBOSA, E, WITARSA, M, MACHADO, A Ajuste sazonal de indices de precos ao consumidor: uma abordagem via modelos dinâmicos de espaco de estado e sua comparacao com o X12-ARIMA e outros metodos Campinas, SP: Departamento de Estatistica, Imecc/Unicamp, CP 6065, 2000 BLOEM, A M, DIPPELSMAN, R J, MAEHLE, N O Quarterly accounts manual: concepts, data sources, and compilation Washington: IMF, 2001 DOSSE, J, PLANAS, C Pre-adjustment in seasonal adjustment methods: a comparison of REGARIMA e TRAMO Eurostat Working Group, 1996 (Document, D3/SA/07) EUROSTAT Manual de Cuentas Trimestrales Cepal, 2000 FISCHER, B, NARDELLI, S Seasonal adjustment methods — a comparison for industry statistics Luxembourg: Europen, Business Trends, Eurostat, 1998 (revised version) IPEA Boletim de Conjuntura, 56, jan 2002 UNITED NATIONS System of National Accounts, 1993 ZANI, S, SOUZA, R C X12-ARIMA e TRAMO/SEATS: uma comparacao utilizando as series das contas trimestrais brasileiras e dados simulados Rio de Janeiro: PUC, 2001 (Dissertacao apresentada ao Departamento de Engenharia Eletrica) (Originais recebidos em dezembro de 2003 Revistos em marco de 2004) sheila_rebeca_robertopmd 10/09/04, 17:40 274

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A Sensibilidade do ajuste sazonal no sistema de contas trimestrais brasileiro

This paper reviews the Latin American experience with the implementation of 1993 SNAand the updating of the national accounts' base year. It also makes a preliminary assessment of the possible estimation biases in nominal GDP estimates stemming from the use of outdated national accounts base years, downwards biases with household final consumption estimates, and an overestimation of gross fixed capital formation in construction activities.

Roberto Ramos

Papers

The Spanish Personal Income Tax: Facts and Parametric Estimates

Effective retirement age: recent developments

The Spanish Public Pension System: Current Situation, Challenges and Reform Alternatives (El Sistema Público De Pensiones En España: Situación Actual, Retos Y Alternativas De Reforma

A Sensibilidade do ajuste sazonal no sistema de contas trimestrais brasileiro

Latin America; Highlights from the Implementation of the System of National Accounts 1993 (1993 SNA)