Minoas Koukouritakis

Testing the purchasing power parity: evidence from the new EU countries

This article examines the validity of the purchasing power parity (PPP) between each of the 12 new EU countries vis-à-vis the Eurozone. Using the Johansen cointegration methodology for a period that begins from the mid-1990s and allowing for a structural break for the countries that joined the EU on May 2004, it is found that there is a long-run equilibrium relationship among the nominal exchange rate, the domestic prices and the foreign prices, for all the new EU countries. The evidence also suggests that the PPP vector enters the cointegration space for Bulgaria, Cyprus, Romania and Slovenia, which means that only for these countries the long-run PPP vis-à-vis the Eurozone is verified. For the rest of the new EU countries the long-run PPP is violated, may due to the fact that the currencies of these countries have been pegged to the euro and cannot reflect the inflation differences vis-à-vis the Eurozone.

The term structure of interest rates in the 12 newest EU countries

This article uses cointegration and common trends techniques to investigate empirically the expectations hypothesis of the term structure of interest rates for the 10 new EU countries, along with Bulgaria and Romania. The empirical results support the expectations theory of the term structure for all countries except Malta. By decomposing each term structure into its transitory and permanent components, we also analyse short-run and long-run interdependence among the term structures of interest rates in these countries. Our results indicate only weak linkages among the term structures of the 10 new EU countries and strong linkages between Bulgaria and Romania joined the EU in 2007.

CAPITAL‐ENHANCED EQUILIBRIUM EXCHANGE RATE IN THE PRESENCE OF STRUCTURAL BREAKS: EVIDENCE FROM THE VISEGRAD COUNTRIES

In this paper I test the validity of the capital‐enhanced equilibrium exchange rate (CHEER) approach for the four Visegrad new EU countries. Recent unit root and cointegration techniques with structural breaks in the data have been used. The CHEER approach is empirically validated only for the Czech Republic, while for Poland and Slovakia there is evidence of plausible economic relationships between the nominal exchange rate and each of the price and interest rate differentials. In contrast, such a relationship cannot be identified for Hungary.

Factors that Determine the Decline in University Student Enrolments in Economics in Australia: An Empirical Investigation

This study attempts to determine empirically the factors that influence enrolments in economics and business based on data from a panel of Australian universities. Using a two‐equation dynamic reduced‐form system, our results indicate the following: past year enrolments in a certain field of study have the highest impact on that field of study; in periods of recession enrolments favour economics; female enrolments favour business studies over economics; an increase in total enrolments has a small negative effect on economics enrolments; and finally, there is a positive impact of the eight leading Australian universities (‘Group of Eight’) on economics enrolments.

Linkages between the Eurozone and the South-Eastern European Countries: A VECMX* Analysis

Abstract Purpose In the present paper we assess the impact of the Eurozone’s economic policies on specific South-Eastern European countries, namely Bulgaria, Croatia, Cyprus, Greece, Romania, Slovenia, and Turkey. Design/methodology/approach Since the countries under investigation are connected to the European Union (EU) or the Eurozone and the economic interdependence among them is evolving, we carried out our analysis using the VECMX* framework. Findings Our results indicate that the transition economies in our sample react in a similar manner to changes in international macroeconomic policies. Cyprus and Greece react also in a similar way, but these responses are very small in magnitude. Finally, Turkey behaves in a different way, probably due to the inflationary pressures in its economy. In general, there is evidence of linkages and interdependence among the EU or Eurozone members of the region. Research limitations/implications We did not construct a full structural model proposed by economic theory, but instead we estimated a reduced-form model. Data limitation is one reason. The other reason is that our sample countries are extremely heterogeneous. Also, for most of the sample countries there is an acute problem of structural uncertainty of their economies yet. Practical implications The way that the economies under investigation react to changes in international macroeconomic policies, may influence the Eurozone policy makers regarding the implemented monetary policy. Originality/value To our knowledge, the above methodology is implemented for the first time in the sample countries and provides a detailed investigation regarding their economic policies and the effects of the Eurozone policies.