1. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36-1-248-1160 e-mail: office@icegec.hu website:www.icegec.hu Selecting the right research topic: “Hot” research issues in EU and transition economies Pál Gáspár ICEG European Center Presentation for prepared for the „Concept of the Research Mentoring Meeting” organised on 1-3 December 2005 in Bishkek, Kyrgyz Republic

2. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu Selective Topics 1.The European social modell 2.EU competitiveness vis-a-vis the US, Asia 3.Lisbon strategy 4.Regulation and economic growth 5.Public sector reform 6.Enlargement of the euro-zone 7.Realocation of production in- and outside Europe 8.Convergence of the NMS 9.Selected issues in transiton economies

3. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu I. The European social model 1.Four major social models: Nordic, Anglo-Saxon, Continental and Mediterranean 2.Assessing the models in the cohesion-welfare-growth triangle 3.Cost and benefits of the individual models 4.Competitiveness and the models 5.The recent advantages of the Nordic and Anglo-Saxon models 6.The Nordic model and growth 7.Where are the EU-8 countries?

4. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu II. EU Competitiveness vis-a-vis the US, Asia 1. Divergence: in mid 1990-s 95%, now less then 85% of the US per capita GDP 2. Widening gaps in growth, productivity, employment, R+D, export growth and market share, global investments 3. Reasons: -Growth hampering regulation -Scale effects and incomplete integration -Diverse policy reforms -Huge gaps in New Economy: IST, R+D 4. The open issues: -Main sources of productivity rise -Public intervention and redistribution -R+D, education and human capital

5. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu III. The Lisbon Strategy 1.Background, targets and current gaps 2.The reasons for the existence of gaps between the goals and facts 3.The renewed strategy 4.The open issues and research topics: -OMC, the competence of national vs. EU wide policies, -Competitiveness and public sector -Competitiveness and factor market reforms -Lisbon reforms and the political will

6. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu IV. Regulation and economic growth 1.The Single Market. Why is is not single indeed? 2.The links between deregulation, liberalisation and economic growth 3.The areas of market distortions in the EU 4.The Service Directive 5.Enlargement and deregulation

7. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu V. Public sector reform 1.The efficiency of the public sector 2.The variety of redistribution experiences 3.The negative effect of public sector on European growth, competitiveness, social indicators 4.The recent success reforms and the implcations 5.The areas for policy measures 6.The political economy of reforms

8. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu VI. Enlargement of the Euro-zone 1.The costs and benefits of the euro-zone entry 2.The trade-offs on the road towards the Euro zone 3.The real and nominal convergence 4.The exchange rate strategy prior the entry 5.The reasons for the slowdown in earlier front runners 6.The impact of the entry on the Euro-zone

9. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu VII. Relocation 1.Relocation, outsorcing, FDI 2.The driving factors of the relocation 3.The impact of relocation of recipient and source economy: costs and benefits 4.Enlargement and relocation 5.Inside and outside EU relocation issues 6.The consequences of the relocation process for the old member sattes 7.The appropriate policy mix in the NMS and OMS to deal with relocation

10. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu VIII. Convergence of the EU-8 1.The current gaps in stock and flow indicators 2.The divergent performance of the EU-8 3.The major factors supporting convergence: productivity, human capital 4.The problem areas: GFCF level, volatility, exposure to shocks, policy distortions 5.The challenges of the convergence for the OMS 6.The policy issues in the NMS

11. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu IX. Selected Issues in Transition Economies 1.Creating appropriate institutions of the market economy 2.Capital formation and FDI attraction 3.Unemployment and labour market reforms 4.Reforming basic public services: education and health care reforms 5.Sustainability of economic growth and convergence 6.Financial deepening and financial sector reforms

12. ICEG European Center 6/B Dayka G. Street, Budapest, H-1118 Tel/Fax: +36 1 248-1160 e-mail: office@icegec.hu website:www.icegec.hu