Search

Professor Marin Buble was one of the first theorists to address the issue of management in Croatia and the wider region. Moreover, it was at the beginning of 1990s, when, [...]

We explore the validity of the purchasing power parity (PPP) hypothesis in the case of Croatia. Two cointegration methods were used: Johansen cointegration that assumes symmetry and threshold cointegration that allows for asymmetric adjustment in the short run. The results suggest that in the tong run the absolute power parity condition holds, that is, that the exchange rate is aligned with the fundamentals and no depreciation is needed. The error correction model does not confirm the existence of exchange rate pass-through to domestic consumer prices. Threshold cointegration results suggest that the adjustment of deviations from PPP is not asymmetric. Comparative Economic Studies (2011) 53, 223-238. doi: 10.1057/ces.2011.3; published online 17 March 2011 Keywords: purchasing power parity, cointegration, threshold adjustment, Croatia JEL Classifications: C22, F31, P22, INTRODUCTION The purchasing power parity (PPP) determines the exchange rate that equates domestic and foreign price levels, so that the purchasing power of a unit of one currency would be [...]

We compare and contrast the economic growth performance of Croatia and Latvia since the collapse of communism in 1991, in an attempt to understand better the extent to which the output growth differentia[ between the two countries can be traced to increased efficiency in the use of capita[ and other resources (intensive growth) as opposed to sheer accumulation of capita[ (extensive growth). On the basis of a simple growth accounting model, we infer that advances in education at ale levels, good governance, and institutional reforms have played a significant role in raising economic output and efficiency in both Croatia and Latvia. The EU perspective seems to have made a more significant contribution to growth in Latvia than in Croatia, even if Latvia's immediate post-accession boom proved unsustainable. Comparative Economic Studies (2011) 53, 165-197. doi: 10.1057/ces.2011.4 Keywords: economic growth, governance, transition economies JEL Classifications: O16, HISTORICAL INTRODUCTION This paper aims to add to a growing strand of comparative studies of country pairs. (1) At the time of the Soviet Union and Yugoslavia's disintegration around 1991 [...]

The goal of this paper is to determine whether the rapid accumulation of household debt in Croatia between 2005 and 2008 was driven by the improving creditworthiness of borrowers or their willingness to carry more debt due to optimistic expectations and the relaxation of banks' tending standards. A new approach is proposed which uses decomposition techniques previously employed in the analysis of wage gaps to capture risks related to the dynamics of household tending. We find that improved creditworthiness can explain only a minor part of the rise in the debt of Croatian households over the observed period (2005-2008). It was, rather, more lenient tending standards coupled with households' willingness to borrow in increasing amounts on the back of optimistic expectations that had a prominent rote in the expansion of household debt. The role of more lenient tending standards was especially pronounced in the case of highly indebted households, whose creditworthiness improved only very slightly or even deteriorated. Also, banks provided access to credit to more risky segments of the population as the creditworthiness of indebted households deteriorated relative to the general population. Comparative Economic Studies (2011) 53, 199-221. doi: 10.1057/ces.2011.14 Keywords: household debt, bank lending standards, household creditworthiness, sample selection models, quantile regression JEL Classifications: D14, D19, G21, C14, INTRODUCTION The rapid growth of Croatian household debt relaxed financial constraint among households, allowing them to frontload some of their consumption on expectations of rapidly growing incomes. (1) However, this [...]

Professor Marin Buble made an indisputable contribution to the development of the specific field of international management. Throughout his scientific career, he was extremely active in studying a variety of [...]

Bank tending, and particularly tending to households, grew rapidly after the restructuring of transition countries' banking systems. While tending booms raise concerns about credit quality and the current account, a Croatian case study suggests that the credit quality issue may not be so severe in transition countries. Cross-country regressions show that transition countries displayed tower levels of household [ending than non-transition countries with similar characteristics before 2005. Indicators of good policies, including recent tow inflation and successful banking reform, are significant in explaining the ratio of household tending to GDP in transition countries. However, weak enterprise reform also leads to higher levels of household tending, pointing to a danger of unbalanced reforms resulting in unsustainable consumption and problems with external balances. Keywords: financial development, household lending, transition, structural reform, lending booms JEL Classifications: E51, E65, O16, P36, INTRODUCTION Since the mid-1990s, the transition countries of Central and South East Europe have made major strides in restructuring their banking systems. (1) A wave of foreign investment in banking [...]

An understanding of a bank's relative performance compared to the market over a period of time is important for analysts, practitioners and policymakers alike. In this paper we analyze bank efficiency in Croatia between 1995 and 2000 by using the Data Envelopment Analysis (DEA). We find that foreign-owned banks are on average most efficient; that new banks are more efficient than old; and that smaller banks are globally efficient, but large banks are efficient when we allow for variable- returns- to- scale. We also find strong equalization in terms of average efficiency in the Croatian banking market, both between peer groups and within peer groups of banks., 1. Introduction Bank efficiency has been an important issue in transition. All transition countries have been faced with at least one banking crisis, and many with more. In most transition [...]

A study of inflation in Croatia from 1992 to 1999 indicates that inflation is tied to curency depreciation and wage growth.

With the historical change of the socio-economic system in ex-communist European countries quality of life of the population changed dramaticaly, improving in some components and within certain social strata and deteriorationg in others. These changes are analysed within the framework of authentic development and quality of life components: economic, social, political, environmental, cultural and human. The major aspect of the changes is the enlargement of human choices in all of the components, and to different extents in different countries in transition. The future of the whole transition process lies in its sustainablity and ability to draw on its past experience as well as on the experience of the Western world. KEY WORDS: enlargement of human choices, transition, sustainable development, authentic development, quality of life

Economic growth has been slow in Croatia despite of its stabilization program. In the five years since achieving independence, the country has experienced war, a one-third drop in GDP, high inflation and economic crisis. The old industrial structure from socialist times still exists while banking is weak. Discrepancy between economic prosperity expectation and reality is observed. Unemployment is high at 19% while capital accumulation is extremely limited. Croatia's sustained growth on the basis of greater efficiency in the long run is questioned.

For Croatia, 1996 marked its emergence after years of strife and tragedy. Its admittance to the Council of Europe represented the first formal step to the objective of the country's economic and foreign policy, which is to be accepted into the main European integration. Croatia's economic future is bright since its geography, resources and people joined to create an environment for economic development and growth for domestic and foreign investors.

Croatia's transition policies involved privatisation within an institutional framework, but did not remove social ownership. Legislation was passed in Apr 1991 which defined permissible paths and the general framework of privatisation, differentiating between small and large privatisation. The government agency which examines plans has been accused of using privatisation legislation for non-economic goals. No large enterprise has been privatised and the government has shown no active concern for the equity of the process.