Is Real Depreciation or More Government Deficit Expansionary? The Case of Slovenia

Hsing, Yu

doi:10.1515/jeb-2017-0005

Cited by 3 publications

(3 citation statements)

References 35 publications

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“…In the presence of commodity price effects, our results confirm the findings of previous studies that the exchange rate depreciation is inflationary [42,43,47,48]. However, there is no evidence of a strong contractionary effect on output growth, contrary to several other studies [44][45][46]48]. In part, different results could be explained by potential differences between the short-term and long-term effects of exchange rates on output.…”

Section: Discussionsupporting

confidence: 81%

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Time-Varying Impact of Commodity Prices on Output Growth and Inflation in the Eastern European Countries

Kopych,

Shevchuk

2023

Commodities

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Using quarterly data for the 2002–2022 period, we estimate the output and inflation effects of several commodity prices (agricultural raw materials, crude oil, and metals) for 8 Eastern European countries with different exchange rate regimes. The Kalman filter is used for estimating the time-varying parameters. Our main findings can be summarized in the following way: (i) higher crude oil prices are inflationary in most of the countries (except Slovakia), with a stronger price effect since 2020; (ii) crude oil prices are neutral with respect to output growth in 4 out of 8 countries, with an expansionary effect in Croatia, Slovenia, and Romania, as well as a contractionary effect in Slovakia, but the crude oil shock of 2021–2022 seems to be expansionary in almost all countries (except Slovakia), regardless of the exchange rate regime practiced; (iii) inflation and output effects of metals prices are quite heterogeneous across countries; (iv) agricultural raw material prices play a role in both inflation and output growth only in Bulgaria and Poland. Since 2021, a growing inflationary impact of crude oil prices suggests a stronger monetary policy reaction to the oil shock, especially in the presence of its favorable output effect.

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Section: Discussionsupporting

confidence: 81%

“…Our choice of controls is quite clear. For the Eastern European countries, consumer price and output effects of the NEER are well documented, for example [42][43][44][45][46][47][48]. For the CEE countries, a positive relationship between openness and inflation is reported by María-Dolores [49] and Shevchuk [48].…”

Section: Data and Statistical Modelmentioning

confidence: 98%

Time-Varying Impact of Commodity Prices on Output Growth and Inflation in the Eastern European Countries

Kopych,

Shevchuk

2023

Commodities

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“…The Impact of Deflation on Public Debt Deflation has a negative impact on debt ratios, if not fully anticipated in the nominal interest rates. This effect works through the initial stock of debt and the combined effect of the real interest rate and the primary balance [Hsing, 2017]. First, for any stored debt and real growth rates, deflation mechanically increases the debt-to-GDP ratio: it reduces nominal GDP, pushing the ratio upwards.…”

Section: Effects Of Deflation On Public Expendituresmentioning

confidence: 99%

The Impact of Deflation on Fiscal Aggregates

Trandafir¹,

Neguriţă²,

GUNI³

2018

ASHU- ES

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This article addresses the phenomenon of deflation from a historical perspective, a phenomenon rarely encountered in our days. Deflation is generally defined as the fall in the aggregate level of the consumer price index, respectively, the reverse inflationary phenomenon. The article also presents, in addition to experiences in different countries in times when deflation has been more pronounced and longer, and the effects it may have on public finance aggregates. The paper analyses the literature of all time that deals with the subject, as well as a presentation of the empirical data recorded, and an econometric analysis wishing to highlight the impact that the aggregate index of prices may have on public debt, using data recorded in Romania during 2000-2017.

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Test of a quadratic relationship between aggregate output and government debt in Hungary

Hui¹

2018

EurJ Appl Econ

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Abstract:The study which applies extended model of aggregate demand and aggregate supply (AD/AS) and uses a quarterly sample during the period from 2001 (Q1) till the last quarter of 2015, has shown that real GDP in Hungary exhibits a bell-shaped quadratic relationship with government debt as a percent of GDP (DY), direct relationship with the real effective exchange rate (ER), stock market price (SP) and the real crude oil price (OP), and an inverse relationship with the real government bond yield (IR) and the expected inflation rate (EI). The critical value of government debt as a percent of GDP is estimated to be 69.22%, which is higher than the EU criterion of 60.00% but less than the threshold of 90.00% proposed by Reinhart and Rogoff (2010).

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Is Real Depreciation or More Government Deficit Expansionary? The Case of Slovenia

Cited by 3 publications

References 35 publications

Time-Varying Impact of Commodity Prices on Output Growth and Inflation in the Eastern European Countries

Time-Varying Impact of Commodity Prices on Output Growth and Inflation in the Eastern European Countries

The Impact of Deflation on Fiscal Aggregates

Test of a quadratic relationship between aggregate output and government debt in Hungary

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