Template-type: ReDIF-Paper 1.0 Author-Name: Louis N. Christofides Author-Name: Thanasis Stengos Title: Wage Rigidity in Canadian Collective Bargaining Agreements  Keywords: nominal, real, wage rigidity Abstract: We examine wage-change distributions in Canadian union contracts for evidence of downward nominal wage rigidity. Its probability increases substantially during low-inflation periods. During such periods, we discern no reduction in the incidence of real wage cuts. However, their magnitude is modest, suggesting that the labour market may not function as smoothly. Length: 38 pages Creation-Date: 2003-03 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/1-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:1-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Minoas Koukouritakis Title: EU Accession Effects on Imports of Manufactures: The case of Greece  Keywords: EU accession, Trade protection, Error-corrected AIDS, Iterative SUR process, Elasticities, Analytical approach, Net trade creation Abstract: This paper evaluates the effects of Greece?s accession to the EU on imports of manufactures and static welfare. A dynamic specification of the Almost Ideal Demand System (AIDS) based on cointegration techniques and error correction models, is used. Based on Greek trade data we find that this formulation performs well on theoretical grounds, as the restrictions imposed by demand theory are supported by the data. We find that Greek imports of manufactures from both sources - EU and the rest of the world (ROW) - substituted for domestic sales, implying net trade creation and consequently, improving static welfare and resource allocation. Length: 22 pages Creation-Date: 2003-05 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/2-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:2-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Elena Andreou Author-Name: Eric Ghysels Title:  Test for Breaks in the Conditional Co-Movements of Asset Returns Keywords: change-point tests, conditional covariance, high-frequency financial data, multivariate GARCH models Abstract: We propose procedures designed to uncover structural breaks in the co-movements of financial markets. A reduced form approach is introduced that can be considered as a two stage method for reducing dimensionality of multivariate heteroskedastic conditional volatility models through marginalization. The main advantage is that one can use returns normalized by volatility filters that are purely data-driven and construct general conditional covariance dynamic specifications. The main thrust of our procedure is to examine change-points in the co-movements of normalized returns. We document, using a ten year period of two representative high frequency FX series, that regression models with non-Gaussian errors describe adequately their co-movements. Change-points are detected in the conditional covariance of the DM/US$ and YN/US$ normalized returns over the decade 1986-1996. Length: 41 pages Creation-Date: 2003-03 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/3-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:3-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Michael Haliassos Author-Name: Christis Hassapis Author-Name: Alex Karagrigoriou Author-Name: George Kyriacou Author-Name: Michalis C. Michael Author-Name: George Syrichas Title:  Debts of Cyprus Households: Lessons from the First Cyprus Survey of Consumer Finances Abstract: This paper describes participation of Cyprus households in various debts using data from the first (1999) Cyprus Survey of Consumer Finances. It complements our previous paper that described household participation in various types of assets (Haliassos et al., 2001). Debts considered encompass personal unsecured loans, including credit card debt, and loans secured by housing collateral, mainly mortgage debt. Findings are of policy interest, as they show the extent of household participation in various loans, and the indebtedness of various demographic groups. We document considerable popularity of credit cards as borrowing instruments despite their recent introduction, and a continuing parallel presence of antiquated forms of borrowing (informal store credits). There is surprisingly limited use by the young of mortgages, despite very high homeownership rates, and of car loans, despite high car ownership rates. We find evidence of considerable reliance on family transfers for the financing of education, home acquisition, and car purchase by the young. Particularly problematic for equality of opportunities is the limited ability of the young to take student loans and the reliance on their parents to do so in order to finance their post-secondary education. Finally, we have noted a tendency of Cyprus business owners to take out large loans from their business for personal use. Length: 40 pages Creation-Date: 2003-04 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/4-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:4-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Minoas Koukouritakis Title: Trade Effects due to the EU Accession: The case of Greece  Keywords: EU accession, trade barriers, analytical /residuals approach, trade balance, trade creation Abstract: This paper estimates the effects on Greek trade balance due to the EU accession. The analytical and the residuals approach were implemented. A full trade model was used, since Greece relies on imported inputs for export production and a standard model of trade may not be appropriate for the country. After the accession, the country had to liberalize its trade by abolishing all barriers, such as tariffs, quotas, financial stringencies, indirect taxes on imports and export subsidies. The gradual abolition of trade protection and promotion, which took place during the 1981 - 1992 period, had a substantial negative effect on Greece’s trade balance and led to a large increase of its deficit. This effect also implies trade creation and thus, improvement in terms of static welfare and resource allocation. The above impact is mainly based on the large increase of imports, as the accession’s negative effects on Greek exports were quite small. Length: 18 pages Creation-Date: 2003-06 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/5-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:5-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Minoas Koukouritakis Author-Name: Leo Michelis Title: EU Enlargement: Are the New Countries Ready to Join the EMU?  Keywords: Economic Integration, EU Enlargement, Cointegration, Common Trends Abstract: This paper investigates empirically the extend to which the ten new countries of the current EU enlargement are ready to join the European Monetary Union (EMU). We assess the prospects of successful accession into the EMU using cointegration and common trends analysis on the nominal convergence criteria specified by the Maastricht Treaty as well as on real per capita GDPs. The empirical results indicate that the enlargement countries are partially ready to join the Eurozone, and need further adjustments in their government policies to be fully prepared for joining the EMU. Length: 28 pages Creation-Date: 2003-10 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/6-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:6-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Christos Koulovatianos  Author-Name: Leonard J. Mirman Title: The Effects of Market Structure on Industry Growth  Keywords: Cournot competition, oligopolistic non-cooperative dynamic games Abstract: We study the behavior of firms in an imperfectly competitive environment in which firms influence the evolution of the stock of capital equipment. Our model enables us, using analytical characterizations, to show the effect of key ingredients of dynamic competition on firm strategies and industry dynamics in addition to the usual static interaction. These effects are the static market externality (implicit in the static Cournot Equilibrium) as well as the dynamic market externality due to the effect on the market outputs of a capital stock and a dynamic externality that stems from the competition between firms for the capital stock. These strategic elements justify our conclusions, based on the study of four market structures, for the link between industrial organization and industry growth. Length: 46 pages Creation-Date: 2003-11 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/7-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:7-2003 Template-type: ReDIF-Paper 1.0 Author-Name: Christos Koulovatianos Author-Name: Leonard J. Mirman Title: R&D Investment, Market Structure, and Industry Growth  Keywords: R&D investment, Cournot competition, oligopolistic non-cooperative dynamic games Abstract: We study how alternative market structures influence market supply and R&D investment decisions of firms operating in dynamic imperfectly competitive environments. Firms can reduce their future production cost through R&D investment today, which is the engine of endogenous industry growth. Our framework enables us to identify key strategic ingredients in firms dynamic competitive behavior through analytical characterizations. These ingredients are a static market externality, stemming from the standard oligopolistic Cournot competition, a dynamic externality that arises due to knowledge spillovers, and a dynamic market externality that comes from the interaction of knowledge spillovers with future market oligopolistic competition that firms internalize while making decisions. We isolate the impact of each strategic ingredient by comparing four alternative market structures. Length: 43 pages Creation-Date: 2003-11 File-URL: http://papers.econ.ucy.ac.cy/RePEc/papers/8-2003.pdf File-Format: Application/pdf Handle: RePEc:ucy:cypeua:8-2003