Economic uncertainty and its impact on the Croatian economy
Petar Sorić and
Public Sector Economics, 2017, vol. 41, issue 4, 443-477
The aim of this paper is to quantify institutional (political and fiscal) and non-institutional uncertainty (economic policy uncertainty, Economistsâ€™ recession index, natural disasters-related uncertainty, and several disagreement measures). The stated indicators are based on articles from highly popular Croatian news portals, the repository of law amendments (Narodne novine), and Business and Consumer Surveys. We also introduce a composite uncertainty indicator, obtained by the principal components method. The analysis of a structural VAR model of the Croatian economy (both with fixed and time-varying parameters) has showed that a vast part of the analysed indicators are significant predictors of economic activity. It is demonstrated that their impact on industrial production is the strongest in the onset of a crisis. On the other hand, the influence of fiscal uncertainty exhibits just the opposite tendencies. It strengthens with the intensification of economic activity, which partially exculpates the possible utilization of fiscal expansion as a counter-crisis tool.
Keywords: economic uncertainty; Economic Policy Uncertainty Index; VAR model with time-varying parameters (search for similar items in EconPapers)
JEL-codes: E03 E32 E61 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:ipf:psejou:v:41:y:2017:i:4:p:443-477
Access Statistics for this article
More articles in Public Sector Economics from Institute of Public Finance Contact information at EDIRC.
Bibliographic data for series maintained by Martina Fabris ().