The transmission of external shocks to the Macedonian economic activity

Danica Unevska Andonova () and Marija Petkovska ()
Additional contact information
Danica Unevska Andonova: National Bank of the Republic of Macedonia
Marija Petkovska: National Bank of the Republic of Macedonia

No 2011-03, Working Papers from National Bank of the Republic of North Macedonia

Abstract: Macroeconomists have been concerned with the structure of business cycle fluctuations and their sources for a long time. In a highly integrated and globalized world, the study of co-movement, or integration, is important because the results of the study on emerging countries could help policy-makers design more appropriate policies for those countries. In this study, we are trying to answer how much of economic volatility in Macedonia can be explained by shocks originating in the Euro area, as main trading partner and world prices and what is the dynamic response of Macedonian GDP to a such shocks. To examine this, we are estimating three variable recursive SVAR models. The results from the basic estimated model, as well as the models in the sensitivity analysis, show that only small portion of domestic GDP variation can be explained by foreign demand, whereas the prices have limited contribution. Impulse response also confirms these findings, as domestic GDP has statistically significant response to foreign demand shock, while world prices shock has no significant effect.

Keywords: VAR; international shock transmission; economic activity; Macedonia (search for similar items in EconPapers)
JEL-codes: C32 E32 F42 F43 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.nbrm.mk/WBStorage/Files/WebBuilder_Tran ... economicactivity.pdf First version, 2011 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mae:wpaper:2011-03

Access Statistics for this paper

More papers in Working Papers from National Bank of the Republic of North Macedonia Contact information at EDIRC.
Bibliographic data for series maintained by Jovica Mitik ().