Naslov
IMPACT OF COMPETITIVENESS SHOCKS ON THE SHORT- RUN OUTPUT DYNAMICS IN SELECTED NEW MEMBER STATES OF THE EUROPEAN UNION

Autori
Novinc, Filip ; Viljevac, Viktor ; Davidović, Marija

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Proceedings of FEB Zagreb 13th International Odyssey Conference on Economics and Business / Sever Mališ, Sanja ; Jaković, Božidar ; Načinović Braje, Ivana - Zagreb : Ekonomski fakultet Sveučilišta u Zagrebu, 2022, 320-330

Skup
13th International Odyssey Conference on Economics and Business

Mjesto i datum
Dubrovnik, Hrvatska, 01.06.2022. - 04.06.2022

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
competitiveness shocks, VAR model, EU new member states

Sažetak
Along with the economic expansion which started at the beginning of the new millennium, Croatia and other new European union members from Central and Eastern Europe simultaneously accumulated internal and external imbalances. These imbalances materialized after the global financial crisis of 2009 in the form of a recession, high unemployment, growing public debt and instabilities in the financial sector. External imbalances such as continuous current account deficits were decreased in the period after the 2009 crisis and are thoroughly researched in the existing literature. The literature mostly points out that competitiveness did not have a significant impact on the development of external imbalances, and instead emphasizes the role of other factors such as domestic demand. On the other hand, the impact of competitiveness shocks on domestic production and the internal imbalance (output gap and price stability) remains relatively unexplored. This paper seeks to assess the impact of price and cost competitiveness shocks on domestic economic activity in the selected new EU member states: Czech Republic, Croatia, Estonia, Hungary, Poland, Romania and Slovenia. Based on the estimated sign restricted vector autoregression models for individual countries, impulse response functions indicate that the negative impact of cost competitiveness (unit labor costs) on the development of domestic GDP is more clearly pronounced than the negative impact of price competitiveness (real effective exchange rate). Moreover, there are significant heterogeneities in output responses to competitiveness shocks between countries. These results should be interpreted with caution since the paper did not identify sources of the deterioration of competitiveness – the nominal exchange rate shocks and relative prices shocks both represent a shock in the real exchange rate, while the unit labor cost shock can originate either in the productivity or wage shock.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA