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Abstract
Central and Eastern European countries faced a serious mortality crisis in the second part of the 20th century, resulting in many years of decreasing life expectancy. In the last few decades, however, this was followed by a period in which mortality improved. This dichotomy of past trends makes it difficult to forecast mortality by way of stochastic models that incorporate these countries’ long-term historical data. The product–ratio model (Hyndman et al. 2013) is a model of the coherent type, which relies more closely on subpopulations with common socioeconomic backgrounds and perspectives to forecast mortality for all populations. This paper examines whether the product–ratio model is suitable for forecasting mortality in countries that have experienced serious mortality crises. To that end, we present a case study centered on Hungary, where the mortality crisis lasted three decades. The evaluation is founded on a comprehensive comparison of the product–ratio model and the classical Lee–Carter model. Our main finding is that in the Hungarian case, the product–ratio model is more reliably accurate than the classical Lee–Carter model. The superior performance of the product–ratio model may indicate that coherent models are better suited to handling mortality crises in forecasting mortality than are independent models.
Abstract
The research examines the sustainability of trade flows for two European post-communist economies: Serbia and Romania. We analysed two nonlinear forms of the relationship between exports and imports that cannot be explained by frequently applied linear model specifications. Newly developed nonlinear autoregressive distributed lag approach revealed the asymmetric and nonlinear long-run equilibrium between Serbian exports and imports. Nonlinearity tests indicated and the SETAR model specification confirmed threshold nonlinearity form in the Serbian trade flows pattern. Serbian trade flows still approach its sustainable equilibrium but the development pattern is promising. The results for Romania revealed another nonlinear form of the relationship between exports and imports, indicating a dependent cointegration. The paper provides robust results and supports the hypothesis that the relationship between exports and imports can be nonlinear and symmetric.
Abstract
In this paper, we analyse the determinants of credit growth for banks operating in 20 countries in the post-communist Central, Eastern and South-Eastern Europe (CESEE). We focus on foreign-owned banks and the parent-subsidiary nexus against the background of all banks operating in this part of Europe. Our goal is to determine whether the macroeconomic and bank-specific determinants for host countries have a similar impact on the entire group of banks operating in CESEE and on its subset of foreign-owned banks and whether the rate of credit growth could be considered ceteris paribus equal across the foreign-owned and the complete set of banks in the CESEE. To this end, we use panel data regressions on approximately 4,600 bank-year observations over the period from 1995 to 2014. We conclude that the determinants of banks’ behaviour in the CESEE countries are consistent regardless of these banks’ ownership, the period and their EU membership. Although having a foreign investor expands the set of relevant determinants, the presence of such investors does not overshadow the importance of local conditions.
Abstract
This paper aims to examine specific cultural attributes which may be favourable to economic development or restrictive to corruptive behaviour. The indicators of GDP growth and GDP per capita, the Human Development Index (HDI), Hofstede's cultural dimensions and the Corruption Perception Index (CPI) were used within a two staged analysis on the sample of selected emerging economies between 1995–2015. The findings of the research outline the complexity of this topic and numerous interrelations among the involved variables. The paper emphasises the importance of understanding the cultural traits of societies and the motives for corruption, to be able to take appropriate measures to promote economic and human development and to combat corruption. Future studies could assess differences within cultural clusters of the emerging economies to allow further insights on a comparative level, increasing the possibility to find answers why different regions develop faster than others.
Abstract
This paper investigates the relationship between economic growth in Poland and a few metrics of fiscal policy: budget deficit relative to GDP, the structure of public debt, education expenditures, and public consumption. We prove that with constant values of parameters of fiscal policy, over time the economy converges to the balanced growth path which is unique and globally asymptotically stable.
Having calibrated the model with statistical data, we demonstrate that in the period of 2000–2016 economic growth in Poland was driven primarily by rapid improvement in the level of human capital (at a rate of 5.4% per annum), and secondarily due to the accumulation of capital (2.7% annually). If recent trends in fiscal policy are continued, the Polish economy will converge to the balanced growth path with GDP growing at 3.7%. This rate may be boosted, if fiscal policy is appropriately adjusted, for example by permanent reduction in budget deficit. We also analyse the effects of changes in the financing structure of public debt. Finally, we present several scenarios of increasing public and private spending on education.
Abstract
This study empirically examines the relationship between the severity of recessions experienced by countries and their income distributions. The analysis is carried out for 28 higher middle- and high-income countries between 1970 and 2013. The empirical evidence derived from the changes in the Gini-index suggests that a greater degree of income inequality increases the cumulative loss of GDP inflicted by recessions. The increased cost emerges from both a longer duration and a deeper amplitude for the contractionary phase of the business cycle.
Abstract
The euro crisis and its lessons are still not a closed chapter for economists and policy makers. The challenge to find the most appropriate ways to prevent intra-area imbalances is still on the top of the agenda. Nominal adjustment (internal devaluation) remains one of the most critical aspects of this debate. Many are indeed interested in whether austerity measures in several countries “made sense.” But much more is at stake here than evaluating the past. The true question is whether the eurozone can rely on nominal adjustment to align internal economic fluctuations. This paper contributes to the answer by investigating the size of price changes and their impacts on output and trade in the wake of the euro crisis. Selecting the most appropriate variables to measure competitive outcomes, the basic idea of “expansionary contraction” is tested. We rely on a comprehensive panel of all Eurozone member states in the post-crisis years (2010–2017). The results suggest that flexible price levels cannot be taken for granted, and a link to competitiveness is not self-evident, either. Other channels of adjustment may prove to be more important, but scaling them up will ultimately require a sound consensus on the future architecture of the euro.
Abstract
The aim of this study is to examine the impact of selected determinants on various categories of profitability in the Polish agriculture. To answer this question, we employed a unique panel of 78 entities. We found that subsidies had a negative effect on profitability of large farms. Moreover, they did not detect a significant impact of variables related to farm operator. Financial surplus to liabilities had a positive impact on both ROS and ROA. Moreover, the significance of using the risk management tools and shaping the ratio of rented land to total land are underlined as important managerial implications. Diagnostics of the model indicated the advantage of the models with fixed effects (FE) over the models with random effects (RE).
Abstract
Despite significant advances in economic literature on the relationship between graft and economic growth, the consensus in nowhere in sight. The current paper enriches the extant literature on the subject by: 1) extending econometric techniques in an attempt to quantify and model institutional development; and 2) providing novel results on the dynamics between non-standardised and standardised institutional metrics. Utilising a new dataset compiled for 423 publicly quoted Czech, non-financial companies with macroeconomic and institutional metrics, we fashion a dynamic model approximating the interactions between the country's institutional development and firm profits as well as examining the relationship between the Czech corruption and the national institutional framework in the years of 2007–2016. The economic property rights appear to contribute to firm accounting profits- and cash flow-based profitability metrics. As regards the anti-corruption policies, the study's outcomes indicate that improvement in economic property rights could have propelled the positive impact of lax anti-corruption government action and inefficient judiciary on firm profits.
