Külgazdaság Vol. 7-8/2015

Quo vadis Rhine capitalism? The future of the German social market economy: chances and dilemmas


In this article, the authors examine the sustainability and possible ways of development  and  transformation  of  the  German  social  market economy  (also known as „Rhine capitalism, or Ordoliberalism) through three main indicator groups. First, the analysis of Germany’s main macroeconomic indicators shows the current economic performance and position of the country. In the second part the authors present a detailed study about the structure and foreign trade relations of German economy. Thirdly by presenting the most important demographic and social indicators the authors are searching the answers about the future chances of Rhine capitalism consider by many as an example of ideal economic model. Thus the article has double purpose: first to give a broad and detailed picture about the characteristics of  German economic system. Secondly, to show the interference between certain economic, monetary and social indicators. The German way of facing the challenges of social market economy is crucially important regarding the future economic prospects of the European Union as well.




Electronics production in Europe: changes after the crisis?



Five new member states of the European Union: the Czech Republic, Estonia, Hungary, Poland and Slovakia have become more and more important players in the European electronics industry. The most important actors here are the local subsidiaries of multinationals, which created new capacities and relocated existing capacities there. The crisis hit hard the industry, and the companies were pressured to look for new ways to increase their competitiveness. The article analyses whether there are new trends in the industry after the crisis and changes in the distribution of labour among EU members. It is shown that the five analysed countries could increase their share in electronics FDI, production and to a smaller extent in value added and decrease slightly their reliance on imported inputs. At the same time, increases in the shares of certain “old” EU member countries were more significant. Thus one of the main conclusions is that the restructuring of European electronics continued or even accelerated during the crisis and took a slightly different direction, and now it reflects to an increasing extent the competitive advantages and disadvantages and differing specialisations of individual EU countries, while labour cost considerations may play a smaller role compared to the pre-crisis period.


Sustainability and growth: The Stern Report and the model of Directed Technical Change



In this article we examine the relationship between sustainability and economic growth starting from the Stern [2006] report. We show that in effect it is the long term discount rate which is in the focus of the academic debate, and we discuss the views of various authors regarding the choice of its proper value. Then we present Acemoglu et al [2012] directed technical change model that provides a generalized framework for the understanding of the debate and for the systemic analysis of the possible answers. An important feature of the model is that innovation is not exogenously given, but it is the most important internal variable. Surprisingly, in this theoretical framework, the discount rate is essentially irrelevant. Finally, we describe the recent developments in the topic, the criticisms concerning the model of directed technical change, which is mainly concerned with the optimal parameter values and the forms of state intervention.




Quantifying the inputs for real options valuation



The value of most companies and projects is significantly increased by the continuous decision making of managers, because it renders business operations flexible compared to the previously fixed plans. Traditional DCF models, however, do not aim to handle this kind of flexibility. These opportunities – real options – are nevertheless worthy of incorporating into the valuation process and a possible way to do it is via the application of financial option valuation methodologies. Beside the familiarity with the theory, this requires quantified inputs, which usually are the current value of the underlying, the strike price, the risk-free interest rate, the time before expiry and the volatility. While these are fairly easily determined for financial options, when it comes to real options, the mere interpretation of these inputs could become equivocal. This paper elaborates on this problem, providing detailed recommendations for both the interpretation and the quantification of these inputs.




EU-Turkey customs union: does the ’Turkish-model’ work?



The customs union between the European Union and Turkey creates a strong, but unstable tie, with asymmetries in the decision-making power of the two sides. Although it had a positive impact on the Turkish economy, recent developments in EU trade policy have questioned the sustainability of the customs union in its current form. The stalemate of the negotiations on a Turkish EU membership raises questions on the possible alternatives. The article analyses the advantages and shortcomings of the EU-Turkey customs union and the lessons of the Turkish-model to be drawn for countries in the neighbourhood. Although the customs union offers economic gains compared to free trade agreements, one-sided adoptation to EU trade policies may become a risky obligation. Still, the Turkish model and the future of EU-Turkey relations have an importance far beyond bilateral relations of the two sides.

Legal supplement

Legal harmonization of the institutions of international customs law


The gradual harmonization of international customs law and the harmonization of certain customs law institutions’ regulation is one of the greatest legal achieve- ments of these days. Legal harmonization can primarily be seen in the harmonization of customs procedures, customs tariffs, rules of origin and the determination of cus- toms’ base. The study presents the legal harmonization characteristics of agreements entered into under the aegis of GATT–WTO Customs Cooperation Council but also discusses legal sources of the European Union formed in this subject. Regarding the harmonization of customs tariffs, the author presents the legal harmonization effects of the Customs Cooperation Council’s nomenclature and the New Harmonised Com- modity Description and Coding System. The determination of rules of origin and the unified rules of customs tariffs’ investigation is also realized with the presentation of the regulations of the GATT–WTO system, followed by the author’s suggestion on the classification of international customs in the legal system.



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