Sustainable Economy

Chair:       Ville Lauttamäki, Finland Futures Research Centre
Time:        Thursday, 9th June, at 13-15
Venue:     Lecture room B4116
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Innovative Fiscal Policy in the Context of Sustainability
Olivér Kovács
ICEG European Center, Hungary
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This contribution addresses the question of what are the main constituents of an innovative fiscal policy in the context of sustainability. We apply the concept of sustaining and disruptive innovation to fiscal policy. On the one hand, innovative fiscal policy is able to be sustaining whereby public finances will incrementally improve without leaving its decisive structure. On the other hand, innovative fiscal policy should be disruptive as well in the context of long term sustainability, whereby the structure of public finance can be profoundly restructured as a reaction to future challenges. We use Finland’s past-experience in order to ravel out the major characteristics of such fiscal policy behaviour. This behaviour might be regarded as innovative characterised by the necessary holistic vision and the ability of the coalition government to intelligently intervene. We also shed light on the key sources of the expansionary consolidation that emerged in the aftermath of the fiscal adjustment in the early 1990s. We emphasise that innovative fiscal policy is more likely to be associated with sustainability in the future.
Impact of Fiscal Policies Changes on the Budgetary Revenues and Sustainable Economic Growth
Cristian Nicolae Stanica
Institute for Economic Forecasting, Romania
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This paper presents the theoretical background of a Social Accounting Model for the Romanian economy, used for estimating and forecasting the main indicators of the NIPA system, Balance of Payments, Government Accounts and Monetary Survey.
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In particular, the paper focuses on various scenarios concerning the budgetary revenue forecasts and economic growth in the Romanian economy for 2011-2012 in relation with the fiscal policies.
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For each of the alternative scenario the direct effects of the fiscal policy (budgetary) and the indirect effects (economic growth) are measured. If the direct effects are purely accountancy results of the new taxation quotas, the indirect effects consist in the influences of the new fiscal policy on the new macroeconomic indicators and the impact of such changes on the budgetary revenue.
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Analysing Drivers of and Barriers to the Sustainable Development: Hidden Economy and Hidden Migration
Lucian-Liviu Albu, Ion Ghizdeanu & Raluca Iorgulescu
Institute for Economic Forecasting, Romania
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The actual global crisis seems to influence negatively the sustainable development in EU countries. At least partially the informal economy escapes from the official registered GDP and hidden migration from the official demographic statistics. This can affect in a significant way the measurement of sustainable development and consequently policies in this field. Coming from general accepted findings of the theory, we concentrate on evaluating the reasons of agents to be involved in hidden economy and estimating the size of this part of economy. Today, there are evidences of a tendency to extended hidden migration together with an increasing official migration usually from eastern EU members to western countries. In a sense, hidden migration could be in relation with informal economy. Using some indirect procedures, we try to estimate the size of hidden migration and the overall impact of the hidden economy and migration phenomenon on the official side of economy and its potential growth in the future. The main application of the developed methodology in this way will be in case of Romania. However, in order to extent certain conclusion, other EU countries are investigated.
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Key words: informal income, inactive population, emigration potential, hidden migration
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Future Trends of Genuine Welfare in Finland
Jukka Hoffrén
Statistics Finland
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The fact that the growth of world population is set to continue connected to calculations that the exploitation of natural resources and environment already exceeds greatly the carrying capacity of the global ecosystem, means that available environmental assets per capita is rapidly declining in near future. Thus, we should be able to increase the eco-efficiency of material commodities production in an extent that guarantees at least current level of wellbeing for everyone. Due to fact that the current economic and political systems still foster unsustainable extensive economic growth, we need new societal goals and relevant measures for steering societies and economies towards this goal.
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In Statistics Finland we have adopted The Genuine Progress Indicator (GPI) to Finnish data for period 1945 -2009. The results show that the economic growth measured by Gross Domestic Product (GDP) has not improved the economic well-being of people in Finland since mid 1980’s. Results imply that GDP is today a poor indicator of welfare in post-industrialised countries. There exists a need to develop new measures to guide economic and social policy making.
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Microsimulation as a Tool in Developing Interregional Input-Output Tables; a Case-Study of the Cairngorms National Park in Scotland
Eveline van Leeuwen, Yoshifumi Ishikawa & Peter Nijkamp
Free University Amsterdam, The Netherlands
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Input-output analysis is a tool that is used all over the world. It focuses in general on monetary flows within an economy to get a better understanding of relationships and interconnections. Almost every country develops national input-output tables on a regular basis. Increasingly, we are interested in inter-regional relationships, for example between countries, but also between regions. Modelling flows of products, in terms of imports and export at a national level is generally not very difficult because data from customs can often be obtained. However, collecting data of trade flows between regions is much more difficult. In general, either statistical information or a combination of survey and statistical information (hybrid methods) is used to get an idea of interregional relationships. In this paper, we propose microsimulation as a tool in simulating local trade, as well as local flows of labour that is necessary to develop a local interregional input-output table. In addition, we also include environmental data in our models, such as land-use and CO2 emission. We will use micro-data collected through questionnaires to simulate both the households and the firm population in a spatial explicit way. Our aim is to develop a three-region interregional input-output table for the Cairngorms national park, Scotland and the UK.