Estimating Barro misery index in democratic states with application in Albania: 2005 - 2014

Fejzi Kolaneci, Juxhen Duzha and Enxhi Lika

European Journal of Interdisciplinary Studies Articles, 2016, vol. 2

Abstract: In the present study we develop a statistical analysis of the Barro misery index and its components in contemporary democratic states with application in Republic of Albania during the period January 2005- December 2014. BMI is calculated by the formula: BMI = ? + u - GPD + i, where BMI denotes quarterly Barro misery index, ? denotes quarterly inflation rate, u denotes quarterly unemployment rate, GDP denotes quarterly real GDP growth rate, i denotes nominal long-term interest rate. Kolmogorov’s Central Limit Theorem is a fundamental theorem of Modern Probability Theory “Fair game†and “Effective market in week sense†are important concepts of Macroeconomics. Some results of the study include : Kolmogorov’s Central Limit Theorem is not valid for quarterly inflation rates in Albania during the period January 2005- December 2014 at the confidence 99. 9 percent. The inflation process in Albania during the specified period, related to the quarterly inflation rate, is an unfair game at the confidence 98. 8 percent. The inflation process in Albania during the specified period, related to the quarterly inflation rate, is not effective at the confidence 97. 5 percent Kolmogorov’s Central Limit Theorem is not valid for quarterly unemployment rates in Albania during the specified period at the confidence 99. 9 percent. The unemployment process in Albania during the specified period, related to the quarterly unemployment rate, is an unfair game at the confidence 99. 9 percent. The unemployment process in Albania during the specified period, related to the quarterly unemployment rate, is not effective at the confidence 99. 9 percent The official data of the quarterly GDP growth rate for Albania during the specified period contradict Kolmogorov’s Central Limit Theorem at the confidence 77. 1 percent. The GDP growth rate process for Albania during the specified period is a fair game at the confidence 86. 4 percent. The GDP growth rate process for Albania during the specified period is not effective at the confidence 99. 9 percent. The official data of the quarterly Barro misery index for Albania during the specified period contradict Kolmogorov’s Central Limit Theorem at the confidence 96. 1 percent. The Barro misery index for Albania during the specified period is a fair game at the confidence 84. 8 percent. The Barro misery index process for Albania during the specified period is not effective at the confidence 63. 7 percent.

Keywords: Barro misery index; Okun misery index; inflation; unemployment; GDP growth rate; Albania. (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:eur:ejisjr:82

DOI: 10.26417/ejis.v2i2.p142-160

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