Front Matter

Front Matter Page

©1998 International Monetary Fund

October 1998

IMF Staff Country Report No. 98/107

Austria: Selected Issues and Statistical Appendix

This Selected Issues and Statistical Appendix report on Austria was prepared by a staff team of the International Monetary Fund as background documentation for the periodic consultation with this member country. As such, the views expressed in this document are those of the staff team and do not necessarily reflect the views of the Government of Austria or the Executive Board of the IMF.

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INTERNATIONAL MONETARY FUND

AUSTRIA

Selected Issues and Statistical Appendix

Prepared by Burkhard Drees, Ketil Hviding, and Antoine Magnier (all EU1)

Approved by the European I Department

October 6, 1998

Contents

  • I. Potential Output and the Output Gap in Austria: A European Perspective

    • A. Introduction

    • B. Approaches to Estimating Potential Output and the Output Gap

      • The Hodrick-Prescott filter

      • The nonparametric approach by Coe and McDermott

      • The structural VAR approach by Blanchard and Quah

      • The production function approach

    • C. Empirical Estimates of Potential Output and the Output Gap

      • Estimations

      • Measures of potential output and the output gap

      • The NAIRU

      • Determinants of potential output and medium-term outlook

    • D. A European Perspective

      • The output gaps in Austria and the EU

      • Demand and supply disturbances in Austria and the EU

    • E. Conclusion

  • References

  • Text Tables

  • I-1. Alternative Estimates of Potential Growth and Output Gap Estimates

  • I-2. Contributions to Potential GDP Growth and Output Gap in Production Function Approach

  • I-3. Amplitude of Cyclical Fluctuations in Austria and the European Union, 1970-97

  • I-4. Correlations of Cyclical Fluctuations in Austria and the European Union, 1970-97

  • Figures

  • I-1. Output Gap Measures from Different Methods

  • I-2. Structural Unemployment Indicators

  • I-3. Potential GDP and Output Gap Estimated by Production Function Method

  • I-4. Labor Input for Production Function Method

  • I-5. Capital Input and Total Factor Productivity for Production Function Method

  • I-6. Output Gap in Austria and the EU

  • I-7. Correlations of Demand and Supply Disturbances for EU Countries, 1963-97

  • I-8. Correlations of Demand and Supply Disturbances for EU Countries, 1963-89

  • I-9. Correlation and Size of Demand and Supply Disturbances for EU Countries, 1963-97

  • I-10. Impulse Response Functions of Output to Demand Disturbances

  • I-11. Impulse Response Functions of Output to Supply Disturbances

  • II. The Austrian Labor Market: Performance and Policies

    • A. Introduction

    • B. Labor Market Performance

    • C. The Directions of Labor Market Reforms

      • Wage flexibility and differentiation

      • Direct labor market rigidities

      • Welfare benefits system

      • Labor taxes

      • Active labor market policies and labor force skills

      • Product market competition and the business environment

    • D. Recent Labor and Product Market Reforms and Policies

      • Wage and labor cost flexibility

      • Work arrangements and practices

      • Taxes and benefits

      • Active labor market policies

      • Other areas

    • E. Conclusion

  • References

  • Appendix I. Differences in Employment and Unemployment Measures in Austria

  • Appendix II. Implementing the OECD Jobs Strategy—An Overview of Progress

  • Appendix III. The Social-Partnership System and the Wage-Bargaining Framework

  • Appendix Table A1. Employment and Unemployment Based on Administrative Data and Microcensus, 1995

  • Appendix Figure A1. Different Measures of the Unemployment Rate

  • Text Tables

  • II-1. Characteristics of Unemployment in Industrial Countries, 1996

  • II-2. Ratios of Employment to Working Age Population in Industrial Countries, 1996

  • II-3. Measures of Aggregate Real Wage Flexibility in Industrial Countries

  • II-4. Labor Market Rigidities and Incidence of Part-Time Employment

  • II-5. Treatment of the Unemployed in Industrial Countries

  • Figures

  • II-1. Employment and Unemployment Rates

  • II-2. Output, Employment, and Productivity

  • II-3. Wages, Inflation, and Productivity

  • II-4. Public and Private Employment, 1970-97

  • II-5. Early Retirement and Employment Rates by Age

  • II-6. Unemployment Persistence

  • II-7. Foreign and Total Employment

  • II-8. Tax Wedges on Wages

  • III. Fiscal Policies in the Medium and Long Term

    • A. Introduction

    • B. Medium-Term Requirements: The Stability and Growth Pact

    • C. Long-Term Fiscal Requirements: Fiscal Pressures from Population Aging

      • Earlier studies of the public pension system

      • Long-term fiscal projections: 1998-2050 and beyond

      • Establishing long-term fiscal sustainability

    • D. Conclusion

  • References

  • Appendix I. Incentives for Early Retirement

  • Text Boxes

  • III-1. The 1997 Pension Reform

  • Text Tables

  • III-1. European Union: Automatic Responses of General Government Balances to Real GDP Growth Fluctuations

  • III-2. Baseline Projections: 1995-2050

  • III-3. Increased Immigration: Difference from “No Policy Change”

  • III-4. Scenario I: Debt Stabilization

  • III-5. Scenario II: Permanent Revenue Increase

  • III-6. Scenario III: Reduced Early Retirement and Increased Contributions

  • III-7. Scenario IV: Tax Incentives for Private Pension Savings

  • Figures

  • III-1. Output Gap, Austria-Specific Demand Shocks, and Budget Balances, 1970-97

  • III-2. Old Age Dependency Ratios, 1995-2050

  • III-3. Public Expenditure and Demographics in 46 Countries, 1985-92

  • III-4. “No Policy Change” Projections, 1998-2120

  • III-5. Financial Balance and Primary Balance

  • III-6. Revenue, Current Primary Expenditure, and Public Debt

  • IV. European and Global Integration: the Challenges for Austria’s Financial Sector

    • A. Introduction

    • B. Recent Developments and Prospective Challenges for Austrian Banks

      • Banking structure and profitability

      • Prospective challenges

    • C. Recent Developments and Prospective Challenges for Debt and Equity Markets

      • Recent developments

      • Prospects for debt and equity markets

    • References

  • Text Boxes

  • IV-1. Ownership Structure of Savings Banks

  • IV-2. Mergers and Privatization

  • IV-3. Key Regulatory Reforms

  • Text Tables

  • IV-1. Key Ratios of the Banking System

  • IV-2. The Largest Banks in Austria

  • Figures

  • IV-1. Market Shares in the Banking Sector, 1997

  • IV-2. Branch Density and Employment, 1987-96

  • IV-3. Bank Profitability in International Comparison, 1986-1995

  • IV-4. The Austrian Equity Market

  • IV-5. Share Price Indices, 1990-98

  • IV-6. The Bond Market, 1997

  • IV-7. Volume of Contracts Traded on OeTOB, 1992-97

  • Statistical Appendix Tables

  • A1. GDP and Expenditure Components

  • A2. Contribution to Real GDP Growth

  • A3. National Income and its Distribution

  • A4. Gross Domestic Product by Sector

  • A5. Labor Market

  • A6. Prices, Wages, and Productivity

  • A7. Federal Budget-Administrative Basis

  • A8. Federal Budget-Cash Basis

  • A9. Financing of the Federal Deficit

  • A10. Debt and Debt Service of the Federal Government

  • A11. Federal Government Assistance to Enterprises and Agriculture

  • A12. Derivation of the Deficit of the Federal Sector on a National Accounts Basis

  • A13. General Government Assets and Liabilities

  • A14. General Government Finances-National Accounts Basis

  • A15. Federal Government Finances-National Accounts Basis

  • A16. Local Government and Social Security Funds Finances-National Accounts Basis

  • A17. Provincial Government Finances (excluding Vienna)-National Accounts Basis

  • A18. Municipal Government Finances (including Vienna)-National Accounts Basis

  • A19. Social Security Fund Finances-National Account Basis

  • A20. Growth of Monetary Aggregates and Main Counterparts

  • A21. Interest Rates

  • A22. Exchange Rate Developments

  • A23. Balance of Payments Summary

  • A24. Capital Account Overview

  • A25. International Investment Position

  • A26. Official Development Assistance

Austria: Selected Issues and Statistical Appendix
Author: International Monetary Fund