Competitiveness, consumer confidence and election outcomes

The literature on the political business cycle (PBC) suggests that politicians systematically manipulate economic conditions in order to increase their chances of re-election. The list of variables that have been found to have a significant effect on the probability of re-election includes macroeconomic (inflation rate, unemployment rate, output growth rate) and fiscal (budget balance, level of expenditures and tax revenues) outcomes. This paper focuses on the question whether price and non-price competitiveness indicators together with consumer confidence index have a statistically significant effect. Thus, this paper addresses two empirical questions. First, in light of the globalisation process and on-going comparisons among national economies, could price and non-price indicators serve as a proxy for voters when deciding on whether to penalise or reward the incumbent? And second, based on the economic theory of voting, is consumer confidence index a better indicator of re-election probability compared to unemployment and output growth rates? Using a dataset of EU member states over the 2000-2015 period and by applying probit/logit analysis we test both questions

Economic policy uncertainty index and economic activity: what causes what?

This paper is a follow-up on the Economic Policy Uncertainty (EPU) index, developed in 2011 by Baker, Bloom, and Davis. The principal idea of the EPU index is to quantify the level of uncertainty in an economic system, based on three separate pillars: news media, number of federal tax code provisions expiring in the following years, and disagreement amongst professional forecasters on future tendencies of relevant macroeconomic variables. Although the original EPU index was designed and published for the US economy, it had instantly caught the attention of numerous academics and was rapidly introduced in 15 countries worldwide. Extensive academic debate has been triggered on the importance of economic uncertainty relating to the intensity and persistence of the recent crisis. Despite the intensive (mostly politically-motivated) debate, formal scientific confirmation of causality running from the EPU index to economic activity has not followed. Moreover, empirical literature has completely failed to conduct formal econometric testing of the Granger causality between the two mentioned phenomena. This paper provides an estimation of the Toda-Yamamoto causality test between the EPU index and economic activity in the USA and several European countries. The results do not provide a general conclusion: causality seems to run in both directions only for the USA, while only in one direction for France and Germany. Having taken into account the Great Recession of 2008, the main result does not change, therefore casting doubt on the index methodology and overall media bias

European economic sentiment indicator: An empirical reappraisal

In the last five decades the European Economic Sentiment Indicator (ESI) has positioned itself as a high-quality leading indicator of overall economic activity. Relying on data from five distinct business and consumer survey sectors (industry, retail trade, services, construction and the consumer sector), ESI is conceptualized as a weighted average of the chosen 15 response balances. However, the official methodology of calculating ESI is quite flawed because of the arbitrarily chosen balance response weights. This paper proposes two alternative methods for obtaining novel weights aimed at enhancing ESI\u27s forecasting power. Specifically, the weights are determined by minimizing the root mean square error in simple GDP forecasting regression equations; and by maximizing the correlation coefficient between ESI and GDP growth for various lead lengths (up to 12 months). Both employed methods seem to considerably increase ESI\u27s forecasting accuracy in 26 individual European Union countries. The obtained results are quite robust across specifications

European economic sentiment indicator: An empirical reappraisal

In the last five decades the European Economic Sentiment Indicator (ESI) has positioned itself as a high-quality leading indicator of overall economic activity. Relying on data from five distinct business and consumer survey sectors (industry, retail trade, services, construction and the consumer sector), ESI is conceptualized as a weighted average of the chosen 15 response balances. However, the official methodology of calculating ESI is quite flawed because of the arbitrarily chosen balance response weights. This paper proposes two alternative methods for obtaining novel weights aimed at enhancing ESI\u27s forecasting power. Specifically, the weights are determined by minimizing the root mean square error in simple GDP forecasting regression equations; and by maximizing the correlation coefficient between ESI and GDP growth for various lead lengths (up to 12 months). Both employed methods seem to considerably increase ESI\u27s forecasting accuracy in 26 individual European Union countries. The obtained results are quite robust across specifications

The interrelationship between media reports and the recession in Croatia

This paper builds upon the Economist’s R-word (recession) index by forming a Croatian version of a media news-based economic uncertainty measure. Using the web archives of the four major Croatian news portals (Index.hr, Jutarnji list, Večernji list and 24 sata), an extensive database of as much as 531107 news articles is formed. The R-word index is obtained by calculating the monthly share of recession-related articles. This way Croatia is placed among the few rare world countries which have their own version of this index. It is found that the index is a leading indicator of economic activity in Croatia, preceding GDP growth rates by two months. Using rolling window correlations, the authors also prove that economic agents react to uncertainty shocks in the most intensive manner precisely at the onset of an economic crisis, while the correlation decreases in periods of more stable economic growth rates

On the behavioral antecedents of business cycle coherence in the euro area

Departing from the mainstream literature on European monetary integration, we acknowledge the interdependence of economic sentiment synchronization and business cycle co-movements for 17 individual European countries and the euro area (EA). Building upon both hard and soft data, we find that sentiment cycles are in fact the driving force behind general economic cycle synchronization. This finding is robust with respect to different synchronization indicators, different Granger causality test specifications, data frequencies (monthly vs. quarterly), and the targeted EA composition (EA11 vs. EA19). The latter is of particular importance, implying that recent EA enlargements have not decreased its homogeneity in this regard. Our results exhibit a certain degree of dependence upon the business cycle phase. The synchronization of 17 examined countries vis-a-vis the EA seems to be even more intensive in recessions than in expansions. In other words, common monetary policy of the ECB should be able to effectively act as a countercyclical tool when an individual national economy is facing a recession

THRESHOLD PARAMETER OF THE EXPECTED LOSSES

The objective of extreme value analysis is to quantify the probabilistic behavior of unusually large losses using only extreme values above some high threshold rather than using all of the data which gives better fit to tail distribution in comparison to traditional methods with assumption of normality. In our case we estimate market risk using daily returns of the CROBEX index at the Zagreb Stock Exchange. Therefore, it’s necessary to define the excess distribution above some threshold, i.e. Generalized Pareto Distribution (GPD) is used as much more reliable than the normal distribution due to the fact that gives the accent on the extreme values. Parameters of GPD distribution will be estimated using maximum likelihood method (MLE). The contribution of this paper is to specify threshold which is large enough so that GPD approximation valid but low enough so that a sufficient number of observations are available for a precise fit

How (i)rrational are we? A case of Croatian inflation

This paper examines the validity of the rational expectations hypothesis (REH) in the case of Croatian consumers and their inflation estimates. The added value of this paper in comparison to previous similar studies lies in the state space methodology, allowing the authors to test for potential time variability of the estimated relationship between actual and expected inflation. The obtained results can be summarized as follows: i) consumers heavily over-estimated actual inflation throughout the entire period 2005-2014, leading to the rejection of the REH; ii) consumer bias against inflation intensifies in times of abrupt price hikes (2007 and 2008), and diminishes in times of lower inflation volatility (2014). This empirical rejection of the REH is in line with previous research on the topic, providing additional evidence that the theoretical paradigm of homo economicus is heavily flawed

Supplementary material for the article: Elshaflu, H.; Todorović, T. R.; Nikolić, M.; Lolić, A.; Višnjevac, A.; Hagenow, S.; Padrón, J. M.; García-Sosa, A. T.; Djordjevic, I. S.; Grubišic, S.; et al. Selenazolyl-Hydrazones as Novel Selective MAO Inhibitors with Antiproliferative and Antioxidant Activities: Experimental and In-Silico Studies. Frontiers in Chemistry 2018, 6 (JUL). https://doi.org/10.3389/fchem.2018.00247

Supplementary material for: [https://doi.org/10.3389/fchem.2018.00247]Related to published version: [http://cherry.chem.bg.ac.rs/handle/123456789/2172

Synthesis, structures and electronic properties of Co(III) complexes with 2-quinolinecarboxaldehyde thio- and selenosemicarbazone: A combined experimental and theoretical study

Cobalt(III) complexes derived from thio-and selenosemicarbazone ligands have been studied to elucidate the nature and consequences of S to Se substitution on their possible biological activity. Solid state structures of cobalt(III) complexes with bis-tridentate coordinated 2-quinolinecarboxaldehyde thio-and selenosemicarbazone were determined by single crystal X-ray diffraction analysis. The complexes were also characterized by spectroscopic methods and cyclic voltammetry. Electronic properties of the complexes were studied using DFT and TD-DFT methods. Finally, evident in vitro antioxidant activity of the complexes was demonstrated