A Re-examination of the Validity of the Life Cycle Hypothesis (LCH): Evidence from Emerging Europe

The study aims to empirically explore the dependence of savings behavior on demographic changes in the context of the life cycle hypothesis (LCH) in a sample of 18 European transition and post-transition countries. The empirical methodology is based on a multifactor modeling approach. The research estimates heterogeneous panel data models by employing three different heterogeneous coefficient estimators: mean group (MG) estimator, common correlated effects mean group (CCEMG) estimator, and augmented mean group (AMG) estimator. The findings demonstrate that the LCH is confirmed in the case of European post-transition countries and rejected as inappropriate in European transition countries due to inconsistency of regression coefficients (age dependency, unemployment rate, urbanization, and health expenditure). The models and their findings presented in this study can be used in policymaking to predict dynamic interactions and variations among selected demographic variables in the determination of savings behavior

PERSPECTIVES OF APPLICATION OF CURRENCY BOARD ARRANGEMENT WITH SPECIAL EMPHASIS ON BOSNIA AND HERZEGOVINA

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A Test of the validity of Crowding-out (or- in) hypothesis: A new examination of link between public borrowing and private investment in Emerging Europe

This study seeks to test the existence of the crowding-out (or- in) hypothesis in a sample of 17 Emerging Europe countries divided in two panels. The study employs a panel autoregressive distributed lag (ARDL) model based on three estimators, Mean Group Estimator (MG), Pooled Mean Group (PMG) and Dynamic Fixed Effect (DFE), in order to evaluate the of stability of short run and long run coefficients using consistently compiled public borrowing and private investment data between 2000 and 2019. The empirical findings of the paper generally confirm the existence of a crowding out effect in both long run and short run in European post-transition countries, and in the long run for European transition countries. More specifically, elasticity of private investment with respect to public debt is greater in the European transition countries than in the European post-transition countries. However, the findings on the crowding out (in) effect of government spending and economic growth on private investment are mixed and conflicting in both the long run and the short run. Accordingly, the study recommends that selected countries should reassess their austerity agendas employed for lowering debt levels, and follow new strategies for managing public debt burden