Mirjana Čižmešija

ASSESSING CROATIAN GDP COMPONENTS VIA ECONOMIC SENTIMENT INDICATOR

Abstract This paper is an attempt of applying Business Survey results in creation of a holistic macroeconomic model for Croatia. Since the BUSY model (1982.), there exists an aspiration for forming a statistical business survey model that will forecast main GDP components for individual EU countries in the short run. However, the idea hasn’t yet been applied in practice in Croatia. Therefore the statistical relationship between the Economic Sentiment Indicator (ESI) and corresponding official statistics series will be analyzed in order to see how the changes in ESI reflect on various segments of economic activity in Croatia. On the basis of two VAR models it can be seen that ESI can help in short-run forecasting of Croatian GDP and private consumption as its main component. It was shown that other GDP components don’t exhibit a strong statistical connection with ESI.

The interrelationship between media reports and the recession in Croatia

Abstract This paper builds upon the Economist’s R-word (recession) index by forming a Croatian version of a media news-based economic uncertainty measure. Using the web archives of the four major Croatian news portals (Index.hr, Jutarnji list, Večernji list and 24 sata), an extensive database of as much as 531107 news articles is formed. The R-word index is obtained by calculating the monthly share of recession-related articles. This way Croatia is placed among the few rare world countries which have their own version of this index. It is found that the index is a leading indicator of economic activity in Croatia, preceding GDP growth rates by two months. Using rolling window correlations, the authors also prove that economic agents react to uncertainty shocks in the most intensive manner precisely at the onset of an economic crisis, while the correlation decreases in periods of more stable economic growth rates.

Personal Finances Vs. The Overall Economic Conditions : What Drives The New EU Member States’ Stock Markets?

Abstract This paper analyses the leading characteristics of the Consumer Confidence Index (CCI) with respect to stock market returns for 11 New EU Member States. It proposes novel CCI weights by minimizing mean squared errors from regression forecasting equations, using CCI lags as regressors. With regards to the obtained “optimal” weights, the examined countries are grouped into micro‑ and macro‑oriented clusters. A strong shift is found in the weights due to the recent recession. The micro aspects (reflecting the wealth effect) severely lose their importance in the crisis, while the consumers’ macroeconomic sentiments grow in significance and constitute a separate transmission channel.