Performance of the Macroeconomic Imbalance Procedure in light of historical experience in the CEE region |
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Authors: | Maria Siranova Marek Radvanský |
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Institution: | 1. Institute of Economic Research, Slovak Academy of Sciences , Bratislava, Slovak Republic;2. Department of Banking and International Finance, Faculty of National Economy, University of Economics , Bratislava, Slovak Republic maria.siranova@savba.sk;4. Institute of Economic Research, Slovak Academy of Sciences , Bratislava, Slovak Republic |
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Abstract: | This article applies set of 24 baseline and auxiliary indicators included into the Macroeconomic Imbalance Procedure framework on the conditions of 17 CEE countries to assess their predictive power given the policy pre-determined and optimal thresholds for the period 1991–2014. Our results suggest that the optimal official thresholds might either be excessively too accommodative (public and private, total or external debt levels), overly conservative (current account balance, export market share and nominal unit labour costs), or with less informative value (labour market characteristics) for set of transition economies. Indicators with higher predictive power belong predominantly to the group of external imbalances indicators. |
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Keywords: | early warning indicators macroeconomic imbalance procedure CEE region |
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