Browsing by Author "Haaparanta, Pertti"
Now showing 1 - 18 of 18
Results Per Page
Sort Options
Item 100 vuotta pientä avotaloutta -– Suomen ulkomaankaupan kehitys, merkitys ja näkymät(Valtioneuvoston kanslia, 2017-11) Haaparanta, Pertti; Tamminen, Saara; Heikkinen, Sakari; Aunesluoma, Juhana; Hakkala, Katariina Nilsson; Kiviluoto, Jussi; Lavikainen, Kasperi; Rissanen, Aarne; Taloustieteen laitos; VATT Institute for Economic Research; University of Helsinki; The Research Institute of the Finnish Economy (ETLA); Taloustieteen laitosLuomme kuvauksen Suomen ulkomaankaupan kehitykseen runsaan sadan vuoden aikana. Tarkastelemme kaupan kasvua, kehitystä, toimiala- ja maajakaumaa sekä kauppapolitiikkaa. Erityisesti arvioimme viennin kansantaloudellista merkitystä. Globaalien arvoketjujen pirstoutumisen on hankaloittanut viennin analysointia bruttovientilukujen pohjalta. Tästä johtuen esitämme raportissa uusia laskelmia viennin luomasta kotimaisesta arvonlisäyksestä niin historiallisesti kuin nykypäivänä. Lisäksi tarkastelemme euroalueen ja viimeisen finanssikriisin vaikutuksia Suomen ulkomaankauppaan. 1930-luvun laman ja toisen maailmansodan jälkeen noussut protektionismi kauppapolitiikassa vaikutti pitkään. Kaupan vapautumisen, alueellisten kauppasopimusten ja Euroopan unioniin liittymisen myötä viennin luoma arvonlisäys on noussut, mutta toisaalta euroalueella ei löydetä olleen merkittävää vaikutusta jäsenmaiden väliseen ulkomaankauppaan. Tuloksiemme mukaan viennin luoma kotimainen arvonlisäys suhteutettuna bruttokansantuotteeseen ylitti ensimmäisen globalisaatiokauden vapaakauppaympäristössä saavutetun tason vasta 1990-luvun laman jälkeen. Viimeisten parin vuosikymmenen aikana teollinen tuotanto on pirstoutunut globaaleihin arvoketjuihin ja entistä suurempi osa viennin bruttoarvosta on ulkomaille päätyvää arvonlisäystä. Samalla palveluiden vienti on noussut merkittävästi. Palveluvienti vastasi noin 36 prosentista viennin koko arvonlisäystä vuonna 2016. Yleisesti ottaen 60–70 prosenttia Suomen viennin arvonlisäyksestä koostuu heterogeenisten tuotteiden myynnistä, joissa kilpaillaan erityisesti koettuun laatuun ja brändiin liittyvillä tekijöillä. Suomella on kohtuullisen hyvät mahdollisuudet saada viennistä merkittävää lisäarvonlisäystä tulevaisuudessakin, vaikka myös kauppapoliittisia uhkakuvia on näköpiirissäItem Business cycle persistence in contemporary macroeconomics: a literature review(2018) Kahelin, Arttu; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessThe recession that followed the financial crisis in 2007 has pushed many economies away from their pre-crisis growth trajectories. This questions the idea that short-term fluctuations in output, often called business cycles, and long-term economic growth are independent from each other. Empirical findings support the idea that these two phenomena are indeed not independent, indicating that business cycles tend to have persistent effects on long-term economic growth. However, in economic theory, there is no direct relationship between business cycles and long-term growth or it is vaguely defined. In many macroeconomics textbooks, short run and long run are studied separately with different models. In more advanced models, such as the New Keynesian DSGE model used by most researchers on the topic, this link is also not explicit. However, there is literature that attempts to establish such a link or to explain the persistent effects of business cycles in general. In this master’s thesis, I review this literature in order to construct an overview on how business cycle persistence is understood and modeled in contemporary economic theory. There are several explanations for business cycle persistence in macroeconomic theory and models. First, the existence of the zero lower bound on monetary policy and liquidity traps can have persistent effects on economic growth because the zero lower bound makes it possible to have two steady-state general equilibria in an economy simultaneously. One of these equilibria is often associated with a liquidity trap. Second, using the model of endogenous technological progress in macroeconomic models makes it possible to replicate the procyclical behavior in productivity growth often seen in real economies. This framework gives an explanation how short-term demand-side shocks can transform into medium-term supply-side shocks, which can decrease long-term growth potential. Third, according to the secular stagnation hypothesis, decreased long-term growth potential can also explain the recent persistence and lost output potential without linking short-term fluctuations and long-term growth. And finally, new methodologies in macroeconomic modeling, such as behavioristic decision-making rules, make models more consistent with the real economy and gives new insights for analyzing business cycle persistence. The apparent threat of business cycle persistence has also provoked some policy recommendations of rethinking monetary and fiscal policy, and regarding subsidizing R&D.Item Competitiveness and Elasticity of Trade(2020) Kiviluoto, Jussi; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessThe elasticity of substitution between goods from different countries is the most important parameter in the standard models of international macroeconomics of business cycles and international trade as it determines the trade effects of changes in competitiveness and trade policy. I identify industry level elasticity of substitution parameters in a structural gravity framework with measures of competitiveness and tariffs by applying state-of-the-art methods for structural gravity model estimation. When elasticity of substitution is identified through relative output prices or unit costs, I find median industry level elasticity of substitution between 0.7 and 0.9, which suggest that volume of trade is inelastic to changes in competitiveness. When elasticity of substitution is identified through tariffs, the median industry level elasticity of substitution is around 3, which is about half of the median estimate of trade elasticity in the trade literature. Higher tariff-based estimates are in line with the view that trade costs lead to higher trade effects as they disproportionately reduce trade of intermediate inputs in global value chains.Item Decline of real interest rates and implications on inflation targeting(2019) Kaartinen, Anssi; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessItem Ennakoivan viestinnän rooli Euroopan keskuspankin rahapoliittisena työkaluna(2019) Riipi, Teemu; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessEuroopan keskuspankin (EKP) rahapolitiikan toteutus on vuosia perustunut muiden keskuspankkien tavoin markkinakorkoihin vaikuttamiseen ohjauskorkopäätöksillä. Vuonna 2008 käynnistynyt finanssikriisi pudotti muiden länsimaiden tavoin myös euroalueen korot lähelle nollaa prosenttia Euroopan keskuspankin käynnistettyä rahapoliittisen elvytyksen pyrkimyksenä auttaa euroaluetta selviämään talouden taantumasta. Vaikka talouskasvu on toipunut finanssikriisin pahimmista vaiheista länsimaissa, euroalueen korot ovat edelleen nollan tuntumassa euroalueen jäätyä pitkittyneeksi ajaksi jälkeen EKP:n asettamasta inflaatiotavoitteesta. Elvyttävälle rahapolitiikalle on ollut edelleen tilausta, mutta sen toteuttaminen ohjauskoron avulla ei ole ollut mahdollista korkojen jo ollessa nolla prosenttia tai lähellä sitä. EKP on turvautunut rahapolitiikassa viime vuosina yhä vahvemmin epätavanomaisiin rahapoliittisiin toimiin, joihin ovat lukeutuneet muun muassa arvopapereiden osto-ohjelmalla toteutettu määrällinen elvytys sekä makrovakauspolitiikka. Näiden lisäksi EKP on pyrkinyt rahapoliittisten päätöstensä yhteydessä signaloimaan markkinoille rahapolitiikan tulevaa suuntaa ja aikeensa sitoutua elvytykseen riittävän pitkäksi aikaa, pyrkimyksenään vaikuttaa markkinoiden korkoodotuksiin ja odotusten välittymisen myötä muuttamaan olemassaolevia korkoja sekä inflaatioodotuksia. Tätä kommunikaatiota kutsutaan ennakoivaksi viestinnäksi. Tässä tutkielmassa selvitetään ennakoivan viestinnän merkitystä paitsi markkinoilla vallitsevan epävarmuuden hillitsijänä, myös rahapoliittisena työkaluna: pystyykö keskuspankki toteuttamaan rahapoliittista elvytystä markkinakommunikaatiollaan sitoutumalla elvyttävään rahapolitiikkaan, ja millaisissa olosuhteissa keskuspankin ennakoiva viestintä on vaikuttavaa. Tutkielmassa syvennytään ennakoivaa viestintää käsittelevään kirjallisuuteen ja arvioidaan olemassaolevan kirjallisuuden perusteella ennakoivan viestinnän toimivuuden edellytyksiä. Lisäksi arvioidaan Euroopan keskuspankin ennakoivan viestinnän vaikutusta euroalueen korko-odotuksiin analysoimalla päivätason datalla korko-odotuksia instrumentoivien euroalueen OIS-korkojen arvonvaihtelua eri maturiteeteilla. Tutkielman johtopäätöksenä Euroopan keskuspankin kommunikaatiolla on ollut tilastollisesti merkitsevä vaikutus euroalueen korko-odotuksiin erityisesti keskipitkällä aikavälillä. Ennakoiva viestintä näyttäisi siis olevan nollakorkorajoitteen tuntumassa toimiva väline rahapoliittiseen elvytykseen oikein käytettynä. Keskuspankin on kyettävä kuitenkin uskottavasti viestimään sitoutumisensa elvytykseen jotta markkinatoimijat muuttaisivat korko-odotuksiaan keskipitkällä aikavälillä, sekä viestimään aiempaa selvemmin ne olosuhteet, joiden toteutuessa keskuspankki voi päättää sitoumuksensa rahapoliittiseen elvytykseen.Item Evaluation of the alternatives of the European Deposit Insurance Scheme(2017) Torda, Adam; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessThe Banking Union, the Economic and Monetary Union's main reform during the recent crisis, is still unfinished without its third pillar, the European Deposit Insurance Scheme. The first two pillars have already ensured that the supervision and resolution of the banks are on the European level. However, the common deposit insurance is still a necessary element to fulfill the Banking Union's objective, to plausibly break the negative feedback loop between sovereigns and their domestic banking sector. This reform, to effectively protect the depositors in the euro area, was put on hold because of the fear of many European member states that it would induce moral hazard and excessive risk-taking. Moral hazard in this setting means that both the member states and banks interests and behavior may change in an undesirable way since the cost of bank failures will be socialized. In my thesis, I analyse the most favorable, but still attainable options of the European Deposit Insurance Scheme, and the ways to mitigate its drawbacks. In the analysis, I suggest feasible alternatives, necessary measures to lessen moral hazard, and inevitable fiscal back-stops to ensure the credibility of a common scheme.Item Funding Liquidity Risk in the Russian Banking Sector: Evidence from the 2008-09 and 2014-15 Crises(2017) Rautee, Ville; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessThe Russian banking sector is backed by cyclical economy with narrow diversification like many resource cursed developing markets. It is therefore highly volatile and suffers from risk premiums higher than seen in the West. Banking sector is underdeveloped, includes many peculiarities and in general more prone to crisis. The sector is corporate-focused while deposit-funded, but has large portions of borrower concentration and related party lending. Capital adequacy ratios defined by Basel Committee are important globally used framework giving perception of buffers in times of financial difficulty. However even banks with low capitalization can survive with sufficient liquidity and funding. Liquidity shortfall is the most common reason for banking collapse. This thesis focuses on risk management and further to funding liquidity risk i.e. rollover risk of the Russian banking sector. Russia’s financial crisis in 1998 lead to collapse of several banks, which increased the mistrust to Russian banking sector. Many banks fell over and investors still remember that. Back then short-term interest rates could hit close to 200 %. When currency lost its value, barter trade grew significantly. This was common practice in Russia in crisis times. In banking sector the state-owned banks increased their market share. There was also similar strong surge in capital inflows before 2008, but inflow turned to strong outflow. Sudden drop seen in market liquidity in 1998 was present also in the crisis of 2008-09 and MIBOR rates hit close to 30 %. During both crises, foreign money fled and dried up the market. The sector needed support package equivalent to over 10% of GDP, proportionately largest among G8 countries. 2008-09 crisis mainly led to market concentration as the state-owned banks increased market share they had been losing for many years to private banks. In 2014-15 crisis banks suffered severe funding issues as Western sanctions restricted access to international capital markets and low oil prices eventually led to sudden currency collapse after floatation. Currency lost 40% of its value against dollar in 2014. This increased share of foreign currency exposures, which concerned roughly third of lending. Loans were difficult to refinance. However, banking sector managed with the help of government’s 15 billion USD capital injections to 27 banks and sector continues nowadays increasingly funded with domestic deposits. Sovereign default was of concern in 2014 as Russia faced multiple headwinds with lower buffers than in 2008. This reflected highly to investor confidence and capital markets’ volatility. Despite state-owned banks still controlling the sector, sanctions have allowed unsanctioned banks to gain market share. Russia is considered as emerging market. Banking sector however has followed Basel accords for years and implementation of Basel III has progressed well since 2013. Institutional framework is considered adequate and funding liquidity risk of the sector is now much lower than in 2015. Liquidity shortfall is present in banking crises and due to continued mistrust Russia suffers often of systemic liquidity risk. However weak fundamentals like asset quality, are key problem currently.Item The Impact of Population Ageing on the Effectiveness of Monetary Policy(2017) Suutari, Antti; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessI study the impact of population ageing on the effectiveness of monetary policy. As the world’s population is growing older with an unprecedented pace, central banks should have a great interest in how does the impact of monetary policy on heterogeneous worker and pensioner households differ, and how does the increasing life expectancy alter the ability of central banks to influence the real economy. I study the topic in OLG framework, which I calibrate to match the demographic change in Finland. I find that an interest rate shock has an asymmetrical impact on workers and pensioners and that the population ageing increases this asymmetry even further. My findings suggest that the demographic change weakens the aggregate impact of monetary policy and the ability of central banks to influence the real economy.Item The inefficient EMU – need for fiscal union or something else entirely?(2021) Kiviharju, Perttu; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessItem Korkotason välittymismekanismi asuntolainanottoon Suomessa(2017) Hakala, Emma; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessItem Modern risk management techniques(2010) Pättiniemi, Tuomas; Haaparanta, Pertti; Informaatio- ja luonnontieteiden tiedekunta; Perustieteiden korkeakoulu; School of Science; Wallenius, HanneleRisk management has become increasingly important in financial markets, and global financial crisis which began in 2007 has shown this again. In this thesis, the goal is to examine modern risk management techniques, which is done by focusing on market risk and credit risk of interest rate products. The goal is also to understand the challenges relating to risk management in order to draw conclusions and give recommendations to support the work in financial risk management. The thesis was based on use of literature, which was complemented by creating a set of simulations using Matlab. Simulations were based on real market prices from interest rate markets. First conclusion was that even simple interest rate products require a fairly large modelling framework for risk management purposes, since interest rate modeling is a challenging task. Modern quantitative risk management techniques were first adopted in market risk management. Recommendation is to use several risk management techniques which complement each other. VaR analysis can be complemented e.g. with scenario analysis. Credit risk is in many ways harder to manage than market risk. Time horizon is long and distributions are skewed to left. Several risk factors impact credit risk simultaneously, and correlations between risk factors are difficult to estimate. Credit valuation adjustment can be calculated based on credit exposure and default probabilties. Key conclusion is that results from various risk management techniques must be viewed with a critical eye. There are several sources of error, including quality of data, estimation of parameters, model calibration, and validity of models. Risk management is as much an art as it is a science. Nevertheless, modern risk management techniques are an invaluable tool to support the work of risk management professional.Item Pankkien järjestelmäriski, makrovakausvälineet ja sääntelyn hyvinvointivaikutukset(2017) Konttila, Juuso; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessKäsittelen tutkielmassani pankkijärjestelmän riskejä, makrovakausvälineitä ja pohdin voiko pankkien sääntelyä muuttaa niin, että yhteiskunta ja pankit hyötyvät. Viimeisen rahoitusmarkkinoiden kriisin jälkeen järjestelmäriski on noussut rahoitusjärjestelmän sääntelyn huomion keskipisteeksi ja makrovakausvälineitä on otettu käyttöön järjestelmäriskien kontrolloimiseksi. Koska makrovakausvälineet ovat uusi ilmiö, empiiristä näyttöä on vielä vähän eikä niistä voi tehdä pitkälle meneviä johtopäätöksiä. Mutta välineet eivät poista järjestelmäriskiä kokonaan ja mikäli pankkien sääntelyä halutaan muuttaa, ne jäävät tämänhetkisen tiedon perusteella sivuosaan. Tärkeämpää on varmistaa, että pankeilla on tarpeeksi omaa pääomaa ja likvidejä varoja ongelmatilanteiden välttämiseksi. Pankkien sääntelyn kiristämisestä yhteiskunta hyötyy selkeästi, pankkien hyötyminen on epäselvää, mutta mahdollista.Item Price Competitiveness and Product Quality as Drivers of Finnish and Swedish Exports(2017) Kiviranta, Tuomas; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessItem Promoting education under distortionary taxation: equality of opportunity versus welfarism(Springer Netherlands, 2022-06) Haaparanta, Pertti; Kanbur, Ravi; Paukkeri, Tuuli; Pirttilä, Jukka; Tuomala, Matti; Department of Economics; Cornell University; University of Helsinki; Tampere University; VATT Institute for Economic ResearchA common claim in the policy discourse is that a government wishing to achieve equality of opportunity should use public provision of education for equalisation of opportunities rather than income taxation, which only equalizes incomes. We develop a framework in which the tax and education provision rules in the welfarist and non-welfarist/equality of opportunity cases can be transparently compared. We show that in addition to education policies, progressive taxation also plays a role in achieving equality of opportunity, and illustrate how its use may differ under the two objectives. We also show how the provision of public education depends on how private education choices respond, potentially differentially by higher- and lower-income families.Item The Risks of Quantitative Easing to Market Liquidity: the ECB's Public Sector Purchase Programme and the German Government Debt Securities Market(2016) Pöyhönen, Olli; Haaparanta, Pertti; Ilmakunnas, Pekka; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessThe aim of this research is to discuss the risks that quantitative easing (QE) may pose to market liquidity. The objective is to assess if the magnitude or the design of the ECB's public sector purchase programme (PSPP) undermines the market liquidity of purchased securities. This research focuses on the German government debt securities market. Market participants have warned that the effective supply of German government debt securities is low in relation to PSPP purchases, which could cause scarcity and undermine market liquidity. The PSPP could weaken the market liquidity of purchased securities by reducing their effective market supply. The scarcity could also cause shortage of collateral in the repo market, which would increase hedging costs and contribute to higher market making costs. As a result, the PSPP could discourage market making in the purchased securities, which would undermine liquidity resilience. In addition, a particularly low level of market liquidity could suppress the price discovery mechanism, which would diminish the effectiveness of QE's portfolio balance channel. Transaction level data on PSPP purchases is not publicly available, which rules out a detailed analysis on the PSPP’s stock and flow effects. Instead, this research utilizes an event study approach to measure the impact of the EAPP announcement in January 2015 on the market liquidity of PSPP-eligible securities. The event study is based on the assumption that the quoted bid-ask spreads partly reflect market makers' expectations of market making costs. This research also determines which securities were most and least likely purchased under the PSPP. The price discovery and liquidity resilience of those securities is then measured from March 2014 until March 2016. This research utilizes Reuters Datastream’s data on prices and bid-ask quotes. The results suggest that the PSPP did not undermine the market liquidity of purchased securities to a significant degree. Indeed, price discovery and liquidity resilience did not deteriorate among those securities that were most likely purchased under the PSPP. However, after the EAPP announcement, the relative bid-ask spreads widened among those PSPP-eligible securities with remaining maturities of over ten years.Item The Role of Excess Reserves in Modern Monetary Policy and Banking(2018) Paksuniemi, Eemeli; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessRegulatory changes after the great financial crisis allowed the Federal Reserve to pay positive interest on excess reserves (IOER) held by depository institutions. The increase of excess reserves in Federal Reserve System was a direct consequence of Quantitative Easing, that effectively made the market for reserves saturated meaning, that the Fed can change its interest rate target and its reserve supply independently. IOER has since then became the single most important policy tool for Fed to target its interest rates and has made the monetary policy more effective. In this thesis, I will provide an overview on IOER as a monetary policy tool and its implications for the banking sector. In empirical part I show evidence, that the demand for reserves is no longer fully saturated as the interest rate target has been raised and the balance sheet unwinding (Quantitative Tightening) has started during the year 2018. Excess reserve scarcity could pose serious systemic risks in the banking sector and could cause difficulties for Federal Reserve in its Quantitative Tightening.Item Studying trade-unemployment relationship in China-Africa context: Does Sub-Saharan Africa benefit from increased trade with China?(2018) Packalén, Elisabeth; Haaparanta, Pertti; Taloustieteen laitos; Kauppakorkeakoulu; School of BusinessChina’s renewed interest in Sub-Saharan Africa has awoken concerns about the world giant’s impact on Africa’s natural resources, employment and overall development. Since the early 2000s, China has provided African countries development aid with no strings attached and invested heavily in agriculture and infrastructure. Trade between the two regions has grown over 200-fold over the past 20 years. For Africa, China’s interest is multi-faceted and complicated. While Chinese infrastructure help to ease bottlenecks in African economies increased import competition has substituted existing African producers with Chinese products, especially in textiles. The aim of this study is to expand existing literature on China-Africa relationship by determining how an increase in exposure to trade with China impacts formal unemployment in Sub-Saharan Africa. The existing China-Africa literature is usually qualitative in nature and the available empirical literature concentrates on China’s impact on Africa’s development and trade in general. Therefore, there is a lack of empirical literature on labour market outcomes. Here, increased exposure to trade is measured by real trade openness, defined as imports plus exports divided by African country’s GDP in real terms. This measure should capture deepening political ties as well as a reduction in traditional trade protectionist means such as tariffs and quotas. The research question is answered through a panel data analysis, using author-collected data from various public sources such as the World Bank and International Trade Centre databases. The models used are based on the Ricardian theory of comparative advantage, combined with Diamond-Mortensen-Pissarides -style of labour markets that are characterized by search and matching frictions. The empirical analysis is complemented with an in-depth review of the literature on the impact of trade liberalization (or opening) as well as an introduction to China-Africa relationship through existing articles and media sources. All in all, the results of the analysis show that there exists a relationship between exposure to Chinese trade and the unemployment rate and that this relationship is unemployment-reducing. If on average trade opening increases by one percent, the unemployment rate is expected to decrease between 1.4% to 1.9%. Based on this result and the evaluation of literature, it is recommended that Sub-Saharan African governments should foster deeper trade relations with China, as well as encourage foreign direct investment that would create more employment for African citizens. These measures should be complemented with strengthening institutions that support the creation of new or existing comparative advantage industries and strengthen labour markets so that negative consequences are minimized. By strengthening its comparative advantage, African countries can foster job creation and stay competitive against China and other countries.Item Tuotantotoiminnan alueellinen sijoittuminen: monopolistinen kilpailu ja Euroopan integraatio(2000) Hermans, Raine; Haaparanta, Pertti; Tuotantotalouden osasto; Teknillinen korkeakoulu; Helsinki University of Technology; Kauranen, Ilkka
