Psychological costs of currency transition: evidence from the euro adoption

Otrachshenko, Vladimir; Popova, Olga; Tavares, José

doi:10.1016/j.ejpoleco.2016.10.002

Cited by 13 publications

(6 citation statements)

References 40 publications

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“…Moreover, the rule of law variable is statistically significant throughout the specifications, implying that countries with well-functioning institutions that guarantee freedoms are relatively more happiness-efficient. This finding parallels the finding that institutions are also determinants of absolute subjective wellbeing levels (Bjørnskov et al 2010;Frey and Stutzer 2000;Frey and Stutzer 2002;Helliwell and Huang 2008;Nikolova 2016;Otrachshenko et al 2016;Rode 2013). Functioning institutions and the rules of the game they impose can enable individuals to invest in their health or human capital or increase their incomes by safeguarding their investments, making it possible to achieve relatively high levels of subjective well-being.…”

Section: Second Stage: Country Fixed-effects Regressionssupporting

confidence: 68%

Sometimes Your Best Just Ain’t Good Enough: The Worldwide Evidence on Subjective Well-being Efficiency

Nikolova

Popova

2020

The B.E. Journal of Economic Analysis &Amp; Policy

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Most of the studies on subjective well-being focus on the determinants of absolute life satisfaction or happiness levels. This paper asks an important but understudied question, namely, could countries achieve the same or even higher subjective well-being by using the same resources more efficiently? We provide the first country panel evidence on whether nations efficiently transform their endowments (income, education, and health) into subjective well-being and which factors influence the conversion efficiency. Using data on 91 countries from 2009 to 2014, we find that that well-being efficiency gains are possible worldwide. We show that poor labor market conditions as proxied by unemployment and involuntary part-time employment are associated with lower ‘subjective well-being efficiency,’ while social support, freedom, and the rule of law improve it. These findings are useful to policymakers in helping identify inefficiencies, reducing wasteful resource use, and developing policies that promote sustainable development and human well-being. Our results are robust to a battery of sensitivity checks and raise policy-relevant questions about the appropriate instruments to improve subjective well-being efficiency.

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Section: Second Stage: Country Fixed-effects Regressionssupporting

confidence: 68%

Sometimes Your Best Just Ain’t Good Enough: The Worldwide Evidence on Subjective Well-being Efficiency

Nikolova

Popova

2020

The B.E. Journal of Economic Analysis &Amp; Policy

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“…To test this possibility, in Table 8, we split the analysis sample based on countries' standing on different macroeconomic indicators, such as GDP per capita, GDP performance relative to the beginning of the transition, political stability, the rule of law, and EU membership. For example, the prospect of joining the EU has shaped the transition process in many of the CEE and Baltic countries and explains the different trajectories that CEE/Baltics and FSU countries took (Åslund, 2007;Lane, 2007;Nikolova and Nikolaev, 2017;Otrachshenko et al, 2016). Generally, countries that followed an EU membership path have implemented governance and macroeconomic reforms, which have helped them modernize and democratize.…”

Section: Countries Without Lustration Lawsmentioning

confidence: 99%

“…Broadly, we add to the literature on the persistence of various types of socio-economic and cultural phenomena (e.g., Acemoglu et al, 2001;Dell, 2010;Voigtländer and Voth, 2012), which has been summarized in Michalopulos and Papaioannou (2017), Nunn (2009, 2020, Spolaore andWacziarg (2013), andVoth (2021). Specifically, we add to the scholarship on the long-term consequences of Communism (e.g., Fuchs-Schündeln and Schündeln, 2020;Lange, 2021;Lichter et al, 2020; and the literature on the perceived quality of life in transition countries (e.g.., Guriev and Zhuravskaya, 2009;Nikolova, 2016;Nikolova and Nikolaev, 2017;Otrachshenko et al, 2016;Popova, 2014;Skoglund, 2017). Most of the work on the persistence of Communism has focused on East Germany, mainly because the separation and later reunification of East and West Germany arguably presents a natural experiment (Alesina and Fuchs-Schündeln, 2007;Bauernschuster and Rainer, 2012;Friehe and Pannenberg, 2020).…”

Section: Introductionmentioning

confidence: 99%

Double-edged sword: persistent effects of Communist regime affiliations on well-being and preferences

2023

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During Communism, party members and their relatives were typically privileged elites in Central and Eastern Europe (CEE) and the former Soviet Union (FSU). At the same time, secret police informants were often coerced to spy and report on their fellow citizens. After the fall of Communism, CEE countries and the Baltics underwent decommunization, unlike most FSU countries. This paper is the first to empirically distinguish between these two Communist party regime affiliations and study their long-term implications for the well-being and preferences of affiliated individuals and their relatives. In the FSU, we find that individuals connected to the former Communist party are more satisfied with their lives, but those linked to secret police informants seem to have lower life satisfaction than those without such ties. The life satisfaction benefit of having former Communist regime party connections in the FSU is, on average, equivalent to one month’s household income. Simultaneously, the psychological costs of being an informant can amount to two monthly household incomes. In CEE countries, having informant connections is not associated with life satisfaction, but having links to the former Communist party is negatively correlated with subjective well-being. Formal and informal decommunization efforts are an important mechanism behind our findings. We also show that those connected to the former regimes differ from those without such connections in their preferences for democracy and market economy, levels of optimism, and risk tolerance, which provides suggestive evidence for the mechanisms underpinning our findings. Our results underscore that the former Communist regimes produced winners and losers based on the trustee status of their collaborators that decommunization efforts further shaped and solidified. Future decommunization efforts in the FSU may thus have important welfare implications.

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“…Ez a mutatószám is visszaigazolja a fenti megállapításainkat, hiszen ezen országok módszeresen igyekeztek elszakadni a rendszerváltozást követő években az orosz gazdasági függéstől. Ez nem csak a skandináv országokkal kötött tőzsdeszövetséghez való csatlakozásban mutatkozott meg, hanem például az euró mihamarabbi bevezetésében is (otraCHsHenko v. et al 2016). Lényegében véve Észtország, Lettország és Litvánia gazdaságpolitikai orientációja is megmutatkozik ezekben a számokban.…”

Section: A Vizsgálat Eredményeiunclassified

A földrajzi diverzifikáció szerepe a globális tőkepiacokon

Bacsosz

2020

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This study illustrates the effectiveness of geographical diversification using capital market data. The paper uses historical capital market prices to show how the neglect of geographical diversification results in a deterioration in investment decision-making. In addition, the correlations between the capital markets of the former socialist countries are presented, which in many cases can be explained by real economic processes and geopolitical events. Quantitative, real-time financial and statistical data provided by capital markets can also be used to justify the dependence systems between countries and groups of countries, but the method can also be used in many cases to show the economic and geopolitical changes between countries. The study shows how concentrated the world’s stock markets are, which means that smaller capital markets cannot separate themselves from economic events, money and capital market news, or events of the largest ones.

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Psychological costs of currency transition: evidence from the euro adoption

Cited by 13 publications

References 40 publications

Sometimes Your Best Just Ain’t Good Enough: The Worldwide Evidence on Subjective Well-being Efficiency

Sometimes Your Best Just Ain’t Good Enough: The Worldwide Evidence on Subjective Well-being Efficiency

Double-edged sword: persistent effects of Communist regime affiliations on well-being and preferences

A földrajzi diverzifikáció szerepe a globális tőkepiacokon

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