The study considers some of the factors determining budget balance. In particular, it
investigates the relationship between budget balance and inflation. The analysis focuses on
European states in the period between 1999 and 2007, and concludes that the relationship
between budget balance and inflation is not demonstrable. In the literature, attempts to
quantify the relationship between the two factors have faced severe difficulties.
Inflation influences both the revenue side and the expenditure side of the budget, often
increasing one and reducing the other at the same time. These effects might balance each
other out, leaving the budget balance unchanged.
The economic crisis has brought a new situation also for the Hungarian economic
policy, as neoliberalism as the main trend in economic thought is no
longer valid. This phenomenon cannot be reduced to be a mere macroeconomic
course shift, as an entire economic philosophy and approach has lost its relevance.
One consequence of this is the need for a thorough revision of the theory
and practice of business management, along with the re-evaluation of the notion
and position of the corporation.
Our study aims to contribute to this theoretical reformation, presenting that social
values derived from psychological and sociological findings such as human
motivational theories or trust are fundamental elements of the 21st century corporate
model. To point to this, we use the ideological correspondences, while
proving that our national research on corporate theory and even rather its application
are far behind the 21st century requirements and lack even the Western
view of the 20th century.
Dieser Artikel zeigt, dass eine Subvention der heimischen Kreditzinsen zu einem
Rückgang der Auslandsverschuldung führen kann. Ausgehend von der Mittelwert-
Varianz- und der Erwartungsnutzentheorie wurde ein Modell entwickelt, in dessen
Rahmen der Wirtschaftsakteur sein internationales Kreditportfolio optimiert.
Eine Einbeziehung der Zinsparitätenbedingung war in der Analyse jedoch nicht
zielführend. In den Modellrahmen wird eine staatliche Zinssubvention eingeführt
und ihre theoretische Wirkung auf die Fremdwährungsverschuldung der Haushalte
The phenomenon of manipulation of the economy by the incumbent for electoral purpose is called
Political Business Cycles (PBC). Using policy control economic instruments, such as fiscal and monetary
instruments, governments may manipulate the economy to gain electoral advantage by producing growth
and decreasing unemployment before elections.
Earlier research on PBC in Albania found clear evidence of fiscal expansion before elections. In addition
to increased income from taxes and borrowing, another source of financing the increased fiscal expansion
in transition countries may be income from privatization, which is also the object of the analysis of this
paper. In our analysis we apply standard econometric approach, used widely for research related to PBC.
We test if income from privatization increases before elections.
We find statistically significant increase of income from privatization before general (parliamentary)
elections, which may lead us to conclude that one of the reasons may be to finance increased expenditures
before elections. Another motivation, behind this behavior of the incumbent, may be rent – seeking.
These results are of particular interest, as it is for the first time that income from privatization is analyzed
in conjunction with PBC.
The market structure can be described by concentration ratios based on the
oligopoly theory or the structure – conduct – performance paradigm. Measures of
concentration and also competition are essential for banks conduction in the
banking industry. Several researchers have proved concentration level to be major
determinants of banking system efficiency. Theoretical characteristics of market
concentration measures are illustrated with empirical evidence. The market
structure of the Albanian Banking Sector has changed dramatically in recent years.
On 1990s, our country has experienced deregulation, foreign bank penetration, and
an accelerated process of consolidation and competition in the banking sector.
Particularly, the working paper examines the nature and the extent of changes in
market concentration of Albanian banking sector. It focused primarily on a
descriptive and dynamic analysis of change in the concentration indices in banking
sector from year to year. Also it examines how the inherited structure of the
banking system affects the way of the distribution of market shares amongst the
different banks that comprise on the banking sector.
A growing body of literature reports evidence of social interaction effects in survey expectations. In this note, we argue that evidence in favor of social interaction effects should be treated with caution, or could even be spurious. Utilizing a parsimonious stochastic model of expectation formation and dy- namics, we show that the existing sample sizes of survey expectations are about two orders of magnitude too small to reasonably distinguish between noise and interaction effects. Moreover, we argue that the problem is com- pounded by the fact that highly correlated responses among agents might not be caused by interaction effects at all, but instead by model-consistent beliefs. Ultimately, these results suggest that existing survey data cannot facilitate our understanding of the process of expectations formation.
The phenomena of manipulation of the economy by the incumbent for electoral
purpose are called Political Business Cycles (PBC), introduced by Nordhaus (1975). Using
policy control economic instruments, as fiscal and monetary instruments, government may
manipulate the economy to gain electoral advantage by producing growth and decreasing
unemployment before elections.
In addition to increased public expenditures, also the production/supply of certain
publicly provided goods may score improvements. In Albania, production and supply of
electricity (for the time span of our analyzes) was controlled by KESH (Korporata
Energjitike Shqiptare – Albanian Energy Corporation) which is a quasi- monopoly in the
supply of electricity in Albania, and it is publicly run. Throughout the transition, supply of
electricity, due to various technical and economic reasons, has not been stable, and
characterized by systematic interruption for households and businesses users, affecting
their well-being and performance (electricity is a main source of energy for households,
including heating and cooking). Therefore, it seems so that there is an incentive and
rationale for the incumbent to use also the provision of electricity to impress the voters
before elections, beside of the classical instruments of expenditures.
In this paper we analyze consumption, production and import of electricity in Albania.
Our hypothesis is that before elections, electricity consumption may increase above usual
levels, followed by a contraction after elections. In our analysis we use modern standard
econometric approach, used widely for research related to PBC. By ARMA modelling it is
possible to prove if elections can explain changes in electricity production, in addition to
the past history of the variable and the random error term.
The paper enlightens popular part of the budget policy – deficit finance. In the
process of securing economic conditions to surpass the current economic crises,
the governments all over the world incline towards debt deficit finance. The
intention is to describe the implications such as multiplier effect, crowding out
effect, correlation between budget and trade deficit. One of them are positive, they
increase the aggregate demand and national income, other negative in term that
they crowd out the private sector from the capital market under increased demand
for loanable funds.