Browsing by Author "Sarajevs, Vadims"

Sort by: Order: Results:

Now showing items 1-4 of 4
  • Sarajevs, Vadims (2001)
    BOFIT Discussion Papers 13/2001
    This is an empirical study of the real income convergence among the fifteen European Union members and the eleven transition economies of Central and Eastern Europe.Debates and research on EU enlargement tends to concentrate on normative issues, so empirical studies constitute a small share of published work on the subject. This empirical investigation relies on available data on transition, and employs several econometric techniques including graphic analysis, classical cross-section regression and dynamic panel data estimations.Most estimation methods find positive convergence, but estimated rates of convergence vary considerably.
  • Sarajevs, Vadims (2000)
    BOFIT Discussion Papers 4/2000
    This paper examines a price-level target in a model with a forward-looking CalvoTaylor Phillips curve.Contrary to conventional wisdom, it is found that price-level targeting leads to a better trade-off between inflation and output-gap variability than inflation targeting, when the central bank acts under discretion.In some cases, price-level targeting under discretion results in the same equilibrium as inflation targeting under commitment.The paper provides a comprehensive econometric analysis of currency substitution for Latvia.Rather than drawing inferences on the degree of currency substitution from domestic money demand modelling, the most common approach to empirical analysis of the phenomenon, direct modelling of currency substitution ratio is applied.Extensive model construction, estimation, evaluation and testing are performed.Methodological issues are also discussed.No simple policy recommendations can be made at this stage of research, but a number of instruments are identified, which can be used by the authorities to influence currency substitution behaviour.
  • Sarajevs, Vadims (1999)
    BOFIT Discussion Papers 7/1999
    Published in Ekonomia vol 4, no 2 (2000), pp. 192-219
    An integrated stochastic macroeconomic model of transition economy at the early stage of reforms with optimising representative risk averse agents is constructed.The equilibrium growth rate of the economy, real asset returns, domestic money demand, and expected inflation rate are determined as functions of the exogenous risks in the economy.The main issue addressed are: domestic money demand, currency substitution ratio, expected rate of inflation, real asset returns, the equilibrium growth rate of the economy as well as government ability to control these variables.Analysis of the model finds that the equilibrium growth rate of the economy is not independent on the monetary and fiscal policies but can be affected by the government through its ability to fix the real cost of capital for the firm, expenditure and monetary policy parameters. JEL Classification Numbers: D80, D90, E41, E44, E52, F41, O11, O23
  • Sarajevs, Vadims (2000)
    BOFIT Discussion Papers 12/2000
    The impact of an unanticipated monetary shock in a small open economy with dollarization, factor price rigidities, and nontradeables is re-examined in an optimizing intertemporal general equilibrium model.The framework of an earlier study is extended to incorporate foreign real money balances into the representative agent's utility function and to account for the phenomenon of dollarization so characteristic of transition economies.The major finding is that in the event of small monetary shocks, the presence of dollarization does not alter the outcome that relates the sign of response of consumption, current account balance, and other macroeconomic variables to the difference between intertemporal and intratemporal elasticities of substitutions of the total consumption index.The solution also shows that the elasticity of intertemporal substitution of money services and the share of traded goods in total consumption - a proxy for openness of the economy - are the crucial parameters in determining the response and the possibility of overshooting of the model variables, with economic openness playing a stabilizing role for the economy in the event of monetary shocks. Key words: New open-economy macroeconomics, Monetary shocks, Dollarization, Factor price rigidities, Nontradeables, Current Account