How reliable are forecasts of GDP growth and inflation for countries with limited coverage?

This paper analyses the performance of GDP growth and inflation forecasts for 25 transition countries between 1994 and 2007, as provided by 13 international institutions, including multilateral, private and academic forecasters. The empirical results show that there is a positive correlation between the number of forecasters covering a given country and the forecast accuracy. Simple combined forecasts are shown to be unbiased and more accurate than most of the individual forecasters, although also inefficient. However, only a few institutions provide efficient and unbiased forecasts, with just one out of 13 forecasters providing both unbiased and efficient forecasts of both GDP growth and inflation in the observed period. The directional analysis shows a correct forecast of the change in the forecast indicator in over two thirds of cases. However, the eventual outcome is within the range of available forecasts in less than half of the cases, with more than 40% of outcomes for GDP growth above the highest forecast. Encouragingly, forecasts are shown to be improving over time and becoming more accurate with the increase in the number of forecasting institutions – forecast accuracy measured by mean absolute error improves by 0.3 percentage points for growth and by 0.2 percentage points for inflation for each additional institution providing forecasts.     

Social aspirations in European banks: peer-influenced risk behaviour

We test a sample of 3,586 banks from 33 European countries to determine whether performances above or below a social aspiration level (median performance of peer banks) influence banks’ aggregate risk levels. Our results are consistent with the behavioural theory of the firm and prospect theory in that we find that bank performance below a bank’s social aspiration level is followed by increased aggregate risk, i.e. risk-taking behaviour in the subsequent year. Although under-performing banks tend to be risk-takers, large banks and banks with high aggregate risk levels tend to limit the increase in their aggregate risk levels.     

Estimation of zero-intelligence models by L1 data

A unit volume zero-intelligence (ZI) model is defined and the distribution of its L1 process is recursively described. Further, a generalized ZI model allowing non-unit market orders, shifts of quotes and general in-spread events is proposed and a formula for the conditional distribution of its quotes is given, together with a formula for price impact. For both the models, MLE estimators are formulated and shown to be consistent and asymptotically normal. Consequently, the estimators are applied to data of six US stocks from nine electronic markets. It is found that more complex variants of the models, despite being significant, do not give considerably better predictions than their simple versions with constant intensities.     

An empirical examination of consumer preferences for honey in Croatia

In past years, beekeeping as an agricultural sector has become more organized, but there is still a gap in knowledge in considering consumer preferences for honey. The aim of the research was to determine consumer preferences for honey and their attitudes towards the Protected Designation of Origin (PDO) label. Also, in the article is presented the current situation regarding the honey market and legislation of the PDO label at the EU and national levels. The result of the empirical research carried out on a sample of 1008 respondents showed that they mostly prefer a mild flavour and brighter colour of honey. According to the type, most of the respondents prefer acacia rather than floral and meadow honeys or other types of honey. The most common method of honey purchase is directly from the producers (75%). The results of the Principle Component Analysis (PCA) showed that the most important attributes are the intrinsic attributes of the honey and that the most common reasons for purchasing and consuming honey are for its health and medical benefits. The obtained results fill the gap in knowledge regarding consumer preferences for honey in the Croatian market and can be useful for the creation of new honey-marketing strategies for local beekeepers.     

The effectiveness of fiscal spending in Croatia,Slovenia and Serbia: the role of trade openness and public debt level

Various structural characteristics of economies, directly or indirectly, affect the transmission from government stimuli to economic activity and determine the size of fiscal multipliers. In this article, we expand the standard Blanchard–Perotti fiscal SVAR model by incorporating the public debt and trade openness variables to assess the influence of these structural determinants on the effectiveness of fiscal spending in three selected former Yugoslav countries – Slovenia, Croatia and Serbia. The results confirmed the main hypotheses, which state that public debt level and trade openness significantly affect the effectiveness of fiscal spending through the means of reduction in size of fiscal effects in all countries analysed. When comparing internationally, this reduction tends to be more evident in countries with a higher degree of average public debt level and trade openness.     

Specifics of Real Estate Taxation in the Czech and Slovak Republics

International Advances in Economic Research - This article is focused on the real estate tax in the Czech and Slovak Republics. Different approaches to the tax are applied (determination of...