The Eastern enlargements of the European Union (EU) since the early 2000s have included post-transitional economies at a lower level of development than the existing member states and thus, have significantly affected the East-West migration flows and labour markets on both sides. This has provided a distinctive opportunity to study the effects of liberalisation and to identify economic factors leading to migration flows with the purpose of enabling better estimations of future migration trends. In this research, a panel data analysis with pair of country fixed effects and time fixed effects is used to explore several pull and push factors of the East-West EU migration flows in the period from 2000 to 2017. Results indicate that emigration rate responds rather quickly to the changes in GDP per capita and unemployment rate of the youth population in immigration country, with statistically significant elasticity coefficients, suggesting that international migration contributes significantly to adjusting the labour supply to fluctuations in economic activity.

This article analyses the relationship between housing wealth and consumption for four European post-transition economies: Bulgaria, Croatia, Estonia and the Czech Republic. We use a vector error correction model and a threshold error correction model in order to asses the long-run and the short-run responsiveness of consumption to permanent changes in housing wealth. We find evidence supporting the existence of the housing wealth effect in all four countries, the strength of which is comparable with developed countries' wealth effect. In Bulgaria, Croatia and Estonia the response of consumption to housing wealth changes is characterised by threshold effects, while in the Czech Republic the wealth effect is detected only in the linear framework. The error correction model estimates suggest aggregate consumption adjusts to deviations from the long-run equilibrium; however, in countries where the wealth effect is characterised by threshold effects this adjustment process is partial and takes place when consumption is below levels warranted by the fundamentals. We also find evidence of relatively strong consumption persistence in three of the four countries.

Following Friedman’s permanent income hypothesis and Ando and Modigliani’s lifecycle hypothesis, this paper empirically studies the role of house prices and income in determining the dynamic behaviour of consumption in selected European post-transition economies using the panel vector autoregression (PVAR) approach and quarterly data covering the period from the first quarter of 2002 until the second quarter of 2012. With the shocks being recognized using the customary recursive identification scheme, we found that the response of personal consumption to the housing wealth shock is initially positive, but short lived.