Multivariate Cointegration Technique Estimation of Health Demand Function: The Case of Croatia

In this paper multivariate Johansen cointegration technique is used in order to estimate health demand function in Croatia. Empirical estimate is based on the theoretical foundation of Grossman's model. According to the estimate, the number of physician visits in Croatia is a function of percentage of urban population, GDP, number of beds per 100 000 people, number of physicians per 100 000 people and total fertility rate. All estimated systems demonstrated strong feedbacks indicating number of endogenous variables greater than one.health demand function, health capital, Grossman's model, Croatian health care system, Johansen cointegration technique

Threshold Autoregressive Model of Exchange Rate Pass through Effect: The Case of Croatia

In this paper exchange rate pass-through effect in Croatia is estimated with nonlinear (asymmetric) threshold autoregressive model (TAR). In total 12285 regressions is estimated and a strong case of nonlinearity with single threshold is proven. According to our estimation there is a threshold at 2.69% of monthly change of nominal exchange rate of German mark (Euro) and the way in which nominal exchange rate affects inflation is asymmetric around it. Below the threshold, effect of change in nominal exchange rate on inflation is statistically insignificant and above the threshold the effect is strong and significant.threshold autoregressive model, pass-through effect, exchange rate, inflation, nonlinear econometrics

A Relative Unit Labor Cost: Case of Accession Countries

In this paper, framework of the relative labor cost has been used in order to analyze relative competitiveness of the economic agents in the Croatia and five accession countries. Therefore, unit labor costs have been calculated for the Croatia, Czech Republic, Hungary, Poland, Slovakia and Slovenia. All of the analyzed countries are transition countries, on the similar level of GDP per capita, and are or will be in the near future EU members. Therefore, it is more than obvious that all of the analyzed countries will be direct competitors in the common European markets. Our findings suggest that relative unit costs (competitiveness) of Croatia vis a vis analyzed countries increased since 1996.competitiveness, relative unit labor costs, productivity, wages, employment

The Harrod-Balassa-Samuelson Effect: A Survey of Empirical Evidence

The paper surveys empirical evidence on the Harrod-Balassa-Samuelson effect. The survey encompasses the published empirical work on the phenomenon since its (re)discovery in 1964. In total, 58 empirical papers are examined within a specialized analytical framework. The body of empirical evidence is synthesized through four major elements. The analysis starts with the ongoing controversy related to the name of the theory. This is followed by a presentation of the evolution of the theoretical and econometric model. It ends with an analysis of the results of the surveyed empirical studies. Results of the survey indicate that growing body of evidence definitely points towards professional rethinking about the significance of the Harrod-Balassa-Samuelson effect.Harrod Balassa Samuelson effect, real exchange rate, purchasing power parity, productivity

Historical Perspective of the Role of Technology in Economic Development

The focus of this paper is to investigate technology changes and influence on economies since the First Industrial Revolution. The First Industrial Revolution was the first point in time when both increase of GDP per capita and population occurred at the same time (avoiding the Malthusian trap). Thus the selected point in time. Furthermore, developments of the late 18th and 19th centuries have some common properties with development of new technologies today. Even though the process of technological change changed during this time, there are still some lessons to be learned from distant and near history on how to gauge policies for fostering successful technological advances. Changes that occurred are relevant for respective economies, industries, companies and individuals. On all these levels changes occurred that were unprecedented in history before the First Industrial Revolution. It is not suggested that technological progress of centuries before the First Industrial Revolution was insignificant, but it certainly did not have such a profound impact in all areas of human life and existence.development, economic history, technology

Exchange Rate Economics in Transition Economies

The goal of this paper is to empirically and theoretically analyze real exchange rate movements in transition countries. Since the beginning of the transition process, continuous real exchange rate appreciation has become stylized fact of all transitional economies. Most of the mainstream models of exchange rate economics have proven to be inadequate in explaining the real exchange rate movements in transition economies. Therefore, new, transition specific theories emerged as possible explanations. This paper seeks to investigate and empirically validate all transition specific theoretical frameworks which were used in explaining real exchange rate movements since the beginning of the transition

MAKROEKONOMSKI ASPEKTI STAMBENOG TRŽIŠTA U HRVATSKOJ

This study analyses structure and driving forces of the housing market in Croatia. The fi rst part of the paper deals with the theoretical analysis of the microeconomic nature of a housing market. The analysis is based on the definition of the object of trade on the market, on the heterogeneity of the housing unit as a good and on the controversial definitions of the stocks and flows on to the housing market. The second part of the study is the microeconomic analysis of the demand and supply function on the housing market. Theoretical model of equilibrium on the housing market is econometrically tested with the data for Croatian housing market between 1965 and 2003. The third part of the study analyses the features of Croatian economy which can render conventional economic analysis. The unofficial economy, the non-transparent cadastral books, the opportunity costs, the structure of costs and the role of tourism industry are included in the extended theoretical analysis of the housing market in Croatia. The fourth part addressed issues of the macroeconomic consequences of the insufficient and suboptimal economic infrastructure on the housing market and the last part of the study has formulated certain policy regulations which could move housing market equilibrium towards better allocation of resources.U ovom istraživanju se raščlanjuje struktura stambenog tržišta i aporije koje ga pokreću. U prvom dijelu rada se teoretski raščlanjuju osnovne postavke stambenog tržišta, raščlamba se bazira na definiciji predmeta tržnje na stambenom tržištu, na heterogenosti stana kao ekonomskog dobra i na kontroverzi u teoretskim definicijama zaliha i tijekova na stambenom tržištu. Drugi dio istraživanja se bazira na mikroekonomskoj analizi funkcija ponude i potražnje na stambenom tržištu. Teoretski model ravnoteže na stambenom tržištu je ekonometrijski testiran s podacima za hrvatsko stambeno tržište u razdoblju od 1965. do 2003. Treći dio istraživanja se sastoji od raščlambe čimbenika koji standardnu ekonomsku analizu na stambenom tržištu u Hrvatskoj čine manje efi kasnom. Neslužbeno gospodarstvo, netransparentna katastarska evidencija, oportunitetni trošak, struktura troškova i uloga turističkog sektora su uključeni u proširenu teoretsku analizu stambenog tržišta. Četvrti i peti dio istraživanja se sastoje od identifi kacije makroekonomskih posljedica nedovoljne i neoptimalne ekonomske infrastrukture na stambenom tržištu i teoretskim preporukama za uklanjanje elemenata ekonomskog okruženja koji su prouzročili neefikasnu alokaciju resursa

Real Interest Parity in New Europe

In this paper we investigate the real interest parity condition in ten Eastern European transition countries during 1997-2009 period. Our sample is interesting for three reasons: It covers the second stage of economic transition in the aftermath of the collapse of socialism; the establishment of Euroland at the turn of the century: and enlargement of Euroland to include the Eastern European countries of Slovenia and Slovakia. The data enables us to investigate how the introduction of market mechanisms in the early nineties and the establishment and enlargement of Euroland acted on real interest rate convergence. We test the real interest parity condition with unit root test with and without structural breaks. Inflationary expectations are estimated in two ways: (i) under assumption of rational expectations with ex-post inflation rates and (ii) with ex-ante estimated inflation expectation using ARIMA/ARCH model. Preliminary results suggest that there is a strong evidence of stationarity and relatively weaker evidence of structural breaks.Real interest parity condition, Transition countries, Unit root test, Structural breaks

Harrod, Balassa and Samuelson (Re)Visit Eastern Europe

In this paper we investigate Harrod Balassa Samuelson (HBS) effect in 11 transition countries. A large number of empirical papers based on quite limited datasets has already been published on HBS in Eastern Europe. The major contribution of this paper is the fact that we estimate HBS with NACE6 quarterly national account data which enables us to divide data into tradable and nontradable sector as suggested by De Gregorio, Giovannini and Wolf (1994) without any unrealistic assumptions. Following Bergstrand (1991) together with relative productivity we also employ share of government consumption in GDP as an explanatory variable. Unlike in previous studies, results have indicated that it is possible to find univariate cointegrating vectors only in Bulgaria, Croatia and Lithuania, and panel cointegration test has indicated that it is possible to find strong evidence of cointegration in post 2000 sample. For the post 1995 period, rejection of the null hypothesis is dependent on the inclusion of government consumption as independent variable and methodology used (DOLS vs. OLS cointegration test).Harrod Balassa Samuelson effect, Price convergence, Transition countries, panel cointegration tests

Structural breaks and Purchasing Power Parity in the CEE and Post-War former Yugoslav States

In this paper we investigate purchasing power parity in the CEE and post-War former-Yugoslav states during EU integration process 1994-2006. This work stems from longer term tests of real exchange rate convergence in the former Yugoslavia. This period is of interest on two fronts: First, it investigates real exchange dynamics in the aftermath of war financed in part through seignorage; and second, we investigate the level of economic integration with the European Union following the break up of the former Yugoslavia. Given the short run nature of the available data we use panel unit root tests with and without structural breaks. Preliminary results suggest that real exchange rates between the former Yugoslav states and Germany are stationary when breaks are accounted for. Given the size of nominal shocks in the region, particularly in the early 1990s, preliminary results indicate that convergence to the long run equilibrium is relatively quick.purchasing power parity, Economic Integration, panel unit root tests