Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives
This paper re-emphasizes the link from structural policies to enhanced macroeconomic stabilization using a small structural model estimated on quarterly data for Macedonia and Slovakia over 1995-2007. The success of macroeconomic stabilization, typ...
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| Format: | Policy Research Working Paper |
| Language: | English |
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World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/08/9762228/comparing-constraints-economic-stabilization-macedonia-slovakia-macro-estimates-micro-narratives http://hdl.handle.net/10986/6796 |
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okr-10986-6796 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ADVERSE EFFECTS AGGREGATE DEMAND AGGREGATE SUPPLY ARBITRAGE BANKING SECTOR BANKING SECTORS BENCHMARK BENCHMARKING BILATERAL EXCHANGE RATES BILL CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL GOODS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL STOCK CENTRAL BANK COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONSUMERS CONSUMPTION GOODS CONSUMPTION SMOOTHING CORNER SOLUTIONS CORRELATION COEFFICIENTS COVARIANCE MATRIX CURRENCY APPRECIATION DEBT DEFLATION DEPENDENT VARIABLE DEPOSIT DEPOSITS DEPRECIATION DEVALUATION DISPOSABLE INCOMES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC CURRENCY PRICE DOMESTIC DEMAND DOMESTIC ECONOMIC ACTIVITY DOMESTIC ECONOMY DOMESTIC INTEREST RATE DOMESTIC INTEREST RATES DOMESTIC MARKET DUMMY VARIABLE ECONOMETRIC ANALYSIS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIES OF SCALE EFFECTIVE EXCHANGE RATES ELASTICITY ELASTICITY OF OUTPUT ENDOGENOUS VARIABLE EQUILIBRIUM EXCESS CAPACITY EXCESS DEMAND EXCHANGE RATE EXCHANGE RATE ANCHOR EXCHANGE RATE CHANNEL EXCHANGE RATE INCREASE EXCHANGE RATE PEG EXCHANGE RATE RISK EXCHANGE RATE SHOCKS EXCHANGE RATE TARGETING EXPECTED VALUE EXPLANATORY VARIABLES EXPORT DIVERSIFICATION EXTERNAL POSITION EXTERNAL SHOCK EXTERNAL SHOCKS FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICIES FISCAL POLICY FISCAL SHOCK FISCAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FIXED EXCHANGE RATE REGIMES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN INFLATION FOREIGN INTEREST FOREIGN INTEREST RATE FOREIGN REAL INTEREST RATE FUTURE INFLATION GDP GOVERNMENT BONDS GOVERNMENT EXPENDITURES GOVERNMENT INVESTMENT GOVERNMENT POLICIES GOVERNMENT POLICY GOVERNMENT SECURITIES GROWTH POLICIES IMPORT IMPORT DEMAND IMPORTS INDEXATION INDUSTRIAL ECONOMIES INFLATION INFLATION DYNAMICS INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INSTRUMENT INTEREST PARITY INTEREST RATE INTEREST RATE CHANGES INTEREST RATES INTEREST-RATE INTEREST-RATE DIFFERENTIALS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL STATISTIC INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT CLIMATE INVESTMENT DEMAND LABOR FORCE LABOR MARKETS LIBERALIZATION LIQUIDITY LIQUIDITY CONSTRAINTS LIVING STANDARDS LOCAL CURRENCY MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET ACCESS MAXIMUM LIKELIHOOD METHOD MONETARY AUTHORITY MONETARY ECONOMICS MONETARY POLICY MONETARY POLICY REGIME MONETARY POLICY REGIMES MONEY MARKET NATIONAL BANK NET EXPORTS NOMINAL ANCHOR NOMINAL EXCHANGE RATE NOMINAL INTEREST RATE NOMINAL WAGES OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT GAP OUTPUT GAPS OUTPUT RESPONSE PER CAPITA INCOMES PHILLIPS CURVE POLITICAL ECONOMY POTENTIAL OUTPUT POVERTY REDUCTION PRICE COMPETITIVENESS PRICE RIGIDITIES PRICE STABILITY PRODUCT MARKETS PROFIT MARGINS PROPERTY RIGHTS RAPID GROWTH RE-EXPORTS REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RELATIVE PRICE RELATIVE PRICES REPO REPO RATE RISK PREMIUM SECTOR REFORMS STANDARD DEVIATION STANDARD DEVIATIONS STEADY STATE STOCK MARKET STOCK MARKET CAPITALIZATION STRUCTURAL REFORMS STRUCTURAL SHOCKS SUPPLY SHOCKS T-BILLS TAX REVENUES TOTAL EXPORTS TRADE INTEGRATION TRADE POLICY TRANSITION ECONOMIES TRANSMISSION MECHANISM TRANSMISSION MECHANISMS UNCERTAINTY UNEMPLOYMENT UNEMPLOYMENT RATE VALUE ADDED WEALTH WEIGHTS ZERO WEIGHT |
| spellingShingle |
ADVERSE EFFECTS AGGREGATE DEMAND AGGREGATE SUPPLY ARBITRAGE BANKING SECTOR BANKING SECTORS BENCHMARK BENCHMARKING BILATERAL EXCHANGE RATES BILL CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL GOODS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL STOCK CENTRAL BANK COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONSUMERS CONSUMPTION GOODS CONSUMPTION SMOOTHING CORNER SOLUTIONS CORRELATION COEFFICIENTS COVARIANCE MATRIX CURRENCY APPRECIATION DEBT DEFLATION DEPENDENT VARIABLE DEPOSIT DEPOSITS DEPRECIATION DEVALUATION DISPOSABLE INCOMES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC CURRENCY PRICE DOMESTIC DEMAND DOMESTIC ECONOMIC ACTIVITY DOMESTIC ECONOMY DOMESTIC INTEREST RATE DOMESTIC INTEREST RATES DOMESTIC MARKET DUMMY VARIABLE ECONOMETRIC ANALYSIS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIES OF SCALE EFFECTIVE EXCHANGE RATES ELASTICITY ELASTICITY OF OUTPUT ENDOGENOUS VARIABLE EQUILIBRIUM EXCESS CAPACITY EXCESS DEMAND EXCHANGE RATE EXCHANGE RATE ANCHOR EXCHANGE RATE CHANNEL EXCHANGE RATE INCREASE EXCHANGE RATE PEG EXCHANGE RATE RISK EXCHANGE RATE SHOCKS EXCHANGE RATE TARGETING EXPECTED VALUE EXPLANATORY VARIABLES EXPORT DIVERSIFICATION EXTERNAL POSITION EXTERNAL SHOCK EXTERNAL SHOCKS FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICIES FISCAL POLICY FISCAL SHOCK FISCAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FIXED EXCHANGE RATE REGIMES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN INFLATION FOREIGN INTEREST FOREIGN INTEREST RATE FOREIGN REAL INTEREST RATE FUTURE INFLATION GDP GOVERNMENT BONDS GOVERNMENT EXPENDITURES GOVERNMENT INVESTMENT GOVERNMENT POLICIES GOVERNMENT POLICY GOVERNMENT SECURITIES GROWTH POLICIES IMPORT IMPORT DEMAND IMPORTS INDEXATION INDUSTRIAL ECONOMIES INFLATION INFLATION DYNAMICS INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INSTRUMENT INTEREST PARITY INTEREST RATE INTEREST RATE CHANGES INTEREST RATES INTEREST-RATE INTEREST-RATE DIFFERENTIALS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL STATISTIC INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT CLIMATE INVESTMENT DEMAND LABOR FORCE LABOR MARKETS LIBERALIZATION LIQUIDITY LIQUIDITY CONSTRAINTS LIVING STANDARDS LOCAL CURRENCY MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET ACCESS MAXIMUM LIKELIHOOD METHOD MONETARY AUTHORITY MONETARY ECONOMICS MONETARY POLICY MONETARY POLICY REGIME MONETARY POLICY REGIMES MONEY MARKET NATIONAL BANK NET EXPORTS NOMINAL ANCHOR NOMINAL EXCHANGE RATE NOMINAL INTEREST RATE NOMINAL WAGES OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT GAP OUTPUT GAPS OUTPUT RESPONSE PER CAPITA INCOMES PHILLIPS CURVE POLITICAL ECONOMY POTENTIAL OUTPUT POVERTY REDUCTION PRICE COMPETITIVENESS PRICE RIGIDITIES PRICE STABILITY PRODUCT MARKETS PROFIT MARGINS PROPERTY RIGHTS RAPID GROWTH RE-EXPORTS REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RELATIVE PRICE RELATIVE PRICES REPO REPO RATE RISK PREMIUM SECTOR REFORMS STANDARD DEVIATION STANDARD DEVIATIONS STEADY STATE STOCK MARKET STOCK MARKET CAPITALIZATION STRUCTURAL REFORMS STRUCTURAL SHOCKS SUPPLY SHOCKS T-BILLS TAX REVENUES TOTAL EXPORTS TRADE INTEGRATION TRADE POLICY TRANSITION ECONOMIES TRANSMISSION MECHANISM TRANSMISSION MECHANISMS UNCERTAINTY UNEMPLOYMENT UNEMPLOYMENT RATE VALUE ADDED WEALTH WEIGHTS ZERO WEIGHT Melecky, Martin Najdov, Evgenij Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| geographic_facet |
Europe and Central Asia Slovak Republic Macedonia, former Yugoslav Republic of North Macedonia (Formerly the Former Yugoslav Republic of Macedonia) |
| relation |
Policy Research Working Paper No. 4691 |
| description |
This paper re-emphasizes the link from
structural policies to enhanced macroeconomic stabilization
using a small structural model estimated on quarterly data
for Macedonia and Slovakia over 1995-2007. The success of
macroeconomic stabilization, typically in the hands of
monetary policy, is not only determined by a suitable choice
of the nominal anchor, which shapes the reaction function of
monetary policy, but also the constraints within which the
monetary policy strives to achieve its objectives. The key
attributes of the constraints to macroeconomic stabilization
are economic rigidities and structural shocks. By
benchmarking the estimated economic rigidities and
structural shocks faced by Macedonia to those faced by
Slovakia, the authors find that Macedonia has relatively
weaker transmission mechanisms of monetary policy, higher
output rigidity, and a lower exchange rate pass-through, and
faces larger external shocks. For Macedonia, these
relatively higher constraints on monetary policy together
with the chosen exchange rate anchor result in greater
output and inflation volatility relative to Slovakia. Hence,
it appears that small, open economies with stronger economic
rigidities should apply monetary policy regimes that allow
for more flexible adjustments in external relative prices to
enhance their macroeconomic stability. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Melecky, Martin Najdov, Evgenij |
| author_facet |
Melecky, Martin Najdov, Evgenij |
| author_sort |
Melecky, Martin |
| title |
Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| title_short |
Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| title_full |
Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| title_fullStr |
Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| title_full_unstemmed |
Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives |
| title_sort |
comparing constraints to economic stabilization in macedonia and slovakia : macro estimates with micro narratives |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2008/08/9762228/comparing-constraints-economic-stabilization-macedonia-slovakia-macro-estimates-micro-narratives http://hdl.handle.net/10986/6796 |
| _version_ |
1764401106907037696 |
| spelling |
okr-10986-67962021-04-23T14:02:32Z Comparing Constraints to Economic Stabilization in Macedonia and Slovakia : Macro Estimates with Micro Narratives Melecky, Martin Najdov, Evgenij ADVERSE EFFECTS AGGREGATE DEMAND AGGREGATE SUPPLY ARBITRAGE BANKING SECTOR BANKING SECTORS BENCHMARK BENCHMARKING BILATERAL EXCHANGE RATES BILL CAPACITY CONSTRAINTS CAPITAL FLOWS CAPITAL GOODS CAPITAL MARKET CAPITAL MARKET DEVELOPMENT CAPITAL MARKETS CAPITAL STOCK CENTRAL BANK COMPETITION POLICY COMPETITIVENESS CONSOLIDATION CONSUMERS CONSUMPTION GOODS CONSUMPTION SMOOTHING CORNER SOLUTIONS CORRELATION COEFFICIENTS COVARIANCE MATRIX CURRENCY APPRECIATION DEBT DEFLATION DEPENDENT VARIABLE DEPOSIT DEPOSITS DEPRECIATION DEVALUATION DISPOSABLE INCOMES DOMESTIC CREDIT DOMESTIC CURRENCY DOMESTIC CURRENCY PRICE DOMESTIC DEMAND DOMESTIC ECONOMIC ACTIVITY DOMESTIC ECONOMY DOMESTIC INTEREST RATE DOMESTIC INTEREST RATES DOMESTIC MARKET DUMMY VARIABLE ECONOMETRIC ANALYSIS ECONOMIC ENVIRONMENT ECONOMIC GROWTH ECONOMIC POLICY ECONOMIES OF SCALE EFFECTIVE EXCHANGE RATES ELASTICITY ELASTICITY OF OUTPUT ENDOGENOUS VARIABLE EQUILIBRIUM EXCESS CAPACITY EXCESS DEMAND EXCHANGE RATE EXCHANGE RATE ANCHOR EXCHANGE RATE CHANNEL EXCHANGE RATE INCREASE EXCHANGE RATE PEG EXCHANGE RATE RISK EXCHANGE RATE SHOCKS EXCHANGE RATE TARGETING EXPECTED VALUE EXPLANATORY VARIABLES EXPORT DIVERSIFICATION EXTERNAL POSITION EXTERNAL SHOCK EXTERNAL SHOCKS FEDERAL RESERVE FEDERAL RESERVE BANK FINANCIAL INSTITUTIONS FINANCIAL INSTRUMENTS FINANCIAL INTERMEDIATION FINANCIAL MARKETS FINANCIAL SECTOR FISCAL POLICIES FISCAL POLICY FISCAL SHOCK FISCAL SHOCKS FIXED EXCHANGE RATE FIXED EXCHANGE RATE REGIME FIXED EXCHANGE RATE REGIMES FLEXIBLE EXCHANGE RATE FLEXIBLE EXCHANGE RATE REGIME FOREIGN CURRENCY FOREIGN INFLATION FOREIGN INTEREST FOREIGN INTEREST RATE FOREIGN REAL INTEREST RATE FUTURE INFLATION GDP GOVERNMENT BONDS GOVERNMENT EXPENDITURES GOVERNMENT INVESTMENT GOVERNMENT POLICIES GOVERNMENT POLICY GOVERNMENT SECURITIES GROWTH POLICIES IMPORT IMPORT DEMAND IMPORTS INDEXATION INDUSTRIAL ECONOMIES INFLATION INFLATION DYNAMICS INFLATION EXPECTATIONS INFLATION TARGETING INFLATION TARGETING REGIMES INSTRUMENT INTEREST PARITY INTEREST RATE INTEREST RATE CHANGES INTEREST RATES INTEREST-RATE INTEREST-RATE DIFFERENTIALS INTERNATIONAL BANK INTERNATIONAL ECONOMICS INTERNATIONAL FINANCIAL STATISTIC INTERNATIONAL FINANCIAL STATISTICS INTERNATIONAL MONEY INVESTMENT CLIMATE INVESTMENT DEMAND LABOR FORCE LABOR MARKETS LIBERALIZATION LIQUIDITY LIQUIDITY CONSTRAINTS LIVING STANDARDS LOCAL CURRENCY MACROECONOMIC POLICIES MACROECONOMIC STABILITY MACROECONOMIC STABILIZATION MARGINAL COST MARGINAL COST OF PRODUCTION MARGINAL COSTS MARKET ACCESS MAXIMUM LIKELIHOOD METHOD MONETARY AUTHORITY MONETARY ECONOMICS MONETARY POLICY MONETARY POLICY REGIME MONETARY POLICY REGIMES MONEY MARKET NATIONAL BANK NET EXPORTS NOMINAL ANCHOR NOMINAL EXCHANGE RATE NOMINAL INTEREST RATE NOMINAL WAGES OPEN ECONOMIES OPEN ECONOMY OPTIMIZATION OUTPUT GAP OUTPUT GAPS OUTPUT RESPONSE PER CAPITA INCOMES PHILLIPS CURVE POLITICAL ECONOMY POTENTIAL OUTPUT POVERTY REDUCTION PRICE COMPETITIVENESS PRICE RIGIDITIES PRICE STABILITY PRODUCT MARKETS PROFIT MARGINS PROPERTY RIGHTS RAPID GROWTH RE-EXPORTS REAL EFFECTIVE EXCHANGE RATE REAL EXCHANGE RATE REAL GDP REAL INTEREST REAL INTEREST RATE RELATIVE PRICE RELATIVE PRICES REPO REPO RATE RISK PREMIUM SECTOR REFORMS STANDARD DEVIATION STANDARD DEVIATIONS STEADY STATE STOCK MARKET STOCK MARKET CAPITALIZATION STRUCTURAL REFORMS STRUCTURAL SHOCKS SUPPLY SHOCKS T-BILLS TAX REVENUES TOTAL EXPORTS TRADE INTEGRATION TRADE POLICY TRANSITION ECONOMIES TRANSMISSION MECHANISM TRANSMISSION MECHANISMS UNCERTAINTY UNEMPLOYMENT UNEMPLOYMENT RATE VALUE ADDED WEALTH WEIGHTS ZERO WEIGHT This paper re-emphasizes the link from structural policies to enhanced macroeconomic stabilization using a small structural model estimated on quarterly data for Macedonia and Slovakia over 1995-2007. The success of macroeconomic stabilization, typically in the hands of monetary policy, is not only determined by a suitable choice of the nominal anchor, which shapes the reaction function of monetary policy, but also the constraints within which the monetary policy strives to achieve its objectives. The key attributes of the constraints to macroeconomic stabilization are economic rigidities and structural shocks. By benchmarking the estimated economic rigidities and structural shocks faced by Macedonia to those faced by Slovakia, the authors find that Macedonia has relatively weaker transmission mechanisms of monetary policy, higher output rigidity, and a lower exchange rate pass-through, and faces larger external shocks. For Macedonia, these relatively higher constraints on monetary policy together with the chosen exchange rate anchor result in greater output and inflation volatility relative to Slovakia. Hence, it appears that small, open economies with stronger economic rigidities should apply monetary policy regimes that allow for more flexible adjustments in external relative prices to enhance their macroeconomic stability. 2012-05-31T20:19:40Z 2012-05-31T20:19:40Z 2008-08 http://documents.worldbank.org/curated/en/2008/08/9762228/comparing-constraints-economic-stabilization-macedonia-slovakia-macro-estimates-micro-narratives http://hdl.handle.net/10986/6796 English Policy Research Working Paper No. 4691 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Europe and Central Asia Slovak Republic Macedonia, former Yugoslav Republic of North Macedonia (Formerly the Former Yugoslav Republic of Macedonia) |