C01 - EconometricsReturn

This paper estimates the presence of the Deaton paradox in Europe. Using panel data for 24 countries ranging from 2000 to 2021, we estimate the presence of excess smoothness of consumption. We use the generalised method of moments (GMM) estimator. We cluster our dataset, which lowers the data variability, and use both quarterly and monthly data to obtain robust estimates. We broaden our knowledge of the Deaton paradox in a new direction by using a combination of uncommon datasets, GMM and clustering. Our findings indicate that traditional economic theories about consumption may not be applicable. The evident excess smoothness in consumption patterns across Europe provides key insights into consumer behaviour, especially during periods of volatility and instability such as the present. Our research indirectly corroborates newer theories in behavioural economics regarding consumption and places them within a wider macroeconomic context. This has implications for both monetary and fiscal policy. 
Business and Corporate Implications for Central European audience: The provided insights into the excess smoothness of European consumption patterns are vital for business strategy, particularly in consumer-focused industries. Companies can use these findings to improve forecasting accuracy, optimize inventory and tailor marketing efforts. The relative stability of consumer behaviour, even in economic shifts, suggests opportunities for enhancing brand loyalty and customer retention. Additionally, these insights are crucial for informed investment decisions and pricing strategies in consumer-dependent sectors. Firms can also use this knowledge in policy advocacy, promoting economic decisions that reflect consumer spending trends. Aligning business strategies with these findings not only boosts operational efficiency but also contributes to their economic stability.

Evaluation of the economic impact of public research and development (R&D) support has become an integral part of the policymaking process. The paper examines the economic effects of the Czech programme TIP supporting R&D in private companies in the recent decade and aspires to contribute to the debate on quantitative methods for assessing outputs additionality of public R&D programmes. The analysis is based on the counter-factual econometric approach, because an appropriate control group could not be found among the unsupported companies, a so-called generalized propensity score matching (GPSM) was used. Two data sources were used: monitoring data of the programme TIP and economic data from the database Bisnode-MagnusWeb. The impact of R&D support on the firms' performance was measured by output indicators: gross value added, profit and productivity. Treatment effects are diverse depending on firm sizes. Generally, the R&D support effects are positive and more substantial in small and medium firms (SMEs) while there are no such effects confirmed for large firms. The support could only impact positively on the output (profit, productivity and gross value added) of small firms only after reaching a certain minimum threshold of the support whereas output diminishes for medium firms after a point of saturation.
Implications for Central European audience: This paper results could be useful for policymakers and R&D funding providers because it provides evidence about the microeconomic impacts of programmes, namely it shows the differentiated effects of public interventions toby the size categories of beneficiaries. The analysis confirms that GPSM approach provides deliver logical outcomes and if the investigation is situated to the right period after the programme is accomplished, it has a potential to bring more insight in the effects than the standard dichotomous model.