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Benjamin Hilgenstock and Zsoka Koczan
The paper examines the evolution and drivers of labor force participation in European regions, focusing on the effects of trade and technology. As in the United States, rural regions within European countries saw more pronounced declines (or smaller increases) in participation than urban regions. Unlike in the United States, however, trade and technology, captured here using novel measures of initial exposures to routinization and offshoring, did not result in detachment from the workforce in European regions. Instead, regions with high initial exposures to routinization and offshoring experienced so-far larger increases in participation, likely driven by an added second worker effect.
Mr. Selim A Elekdag and Mr. Dirk V Muir

of a vibrant supply chain, and will henceforth be referred to as the German-Central European Supply Chain (GCESC). Motivated by these developments, this paper comprises two parts, focusing on two broad questions : The first part concentrates on the implications of greater economic interconnectedness owing to the establishment of the supply chain. How has deeper supply chain integration affected the nature of spillovers over time stemming from various global and regional shocks? What role is there for policies? The second part of the paper highlights how

International Monetary Fund. European Dept.

indicates a more conducive environment for foreign ownership. Participation in supply chains . In addition, we also include a measure of supply chain integration (the share of exports processed through upstream and downstream supply chains) given the strong role of supply chains in global and EU exports in the past decade ( IMF, 2013 ; Rahman and Zhao, 2013 ). The degree of supply chain integration, which varies across time and country, captures the effects of other structural and institutional variables that may have important bearing for FDI and foreign firms

Mr. Helge Berger and Mr. Martin Schindler

that some of the same reform efforts that can help an economy grow will also advance its competitiveness and ability to attract foreign investment into higher-productivity export sectors, which in turn generates benefits for the economy as a whole. These dynamics may help explain the drop in Slovakia’s unemployment before the crisis. Among other things, increased supply-chain integration could also help address the widening divergences in intra–euro area current account balances that were observed prior to the crisis. Indeed, much of the recent reduction in current

Jesmin Rahman, Ara Stepanyan, Jessie Yang, and Mr. Li Zeng

environment for foreign ownership. Participation in supply chains . In addition, we also include a measure of supply chain integration (the share of exports processed through upstream and downstream supply chains in total) given the strong role of supply chains in global and EU exports in the past decade ( IMF, 2013 ; Rahman and Zhao, 2013 ). The degree of supply chain integration, which varies across time and country, captures the effects of other structural and institutional variables that may have important bearing on FDI and foreign firms’ decisions to locate

Jesmin Rahman, Ara Stepanyan, Jessie Yang, and Mr. Li Zeng
How do countries enhance their exports of goods in a largely tariff-free environment? Our investigation of export performance of new member states in the European Union single market, which provides a natural control for barrier-free environment, points to the importance of structural reforms, particularly in the areas of higher education, skills upgrade, wage structure’s ability to provide incentives to work and foreign investment environment. In addition, establishing links with supply chains, which in addition to the above-mentioned reforms also depend on better institutions and infrastructure, are important. The analysis in the paper shows that new member states are at varying levels of quality and integration, which highlights the need for country-specific policy priorities. Services trade, which is subject to significant non-tariff barriers in the EU market even after the implementation of the Services Directive, shows considerable room for growth given the comparative advantage of some of the new member states.
International Monetary Fund

maps. (e) Improved agriculture output through increased agriculture-based incomes . In light of the challenges of declining output, low productivity and weak supply chain integration in agriculture, which limit job creation and income growth for farmers, CDB will partner with the International Fund for Agricultural Development (IFAD) to support the financing of eligible agricultural sub-projects for new agri-business and agro-processing. (f) Improved road access to support rural development . CDB will support the provision of better roads in the northern part of