Research Papers

Research Papers

The Research Papers consist of research studies and analyses on subjects related to theoretical and practical aspects, relevant for current and future economic and financial developments.

Note: The views expressed in the Research Papers are solely of the author/s and do not necessarily reflect those of the Bank of Albania.

Research Papers

Digital currencies impact on financial stability and financial cycle, H2 2021
Authors: Natasha Ahmetaj, Bledar Hoda, Livia Nikolla, Arisa Goxhaj (Saqe)
Digital currencies (DC) have spread quickly enough to draw the attention of policymakers and international organizations. The benefits in terms of greater speed and efficiency of payment transactions are clear. A greater ambiguity prevails regarding the risks to financial stability and monetary policy effectiveness.

An alternative decomposition of inflation in Albania into domestic and foreign contribution through input-output tables
Authors: Enian Cela
In the last decade, Albania has mostly faced lower inflation rates if compared with the 2000s. This seems associated both with weak cyclical conditions as well as with the presence of mostly negative imported inflation. Therefore, both the domestic and external environments foster low (even negative) inflationary pressures.

Albanian Household Wealth Survey-AHWS: Results from the first wave
Authors: Elona Dushku, Ola Cami
This report summarizes the main findings from the first round of the Albanian Household Wealth Survey, conducted by the Bank of Albania in early 2019. The purpose of this survey was to collect individual data on Albanian households, focusing on wealth and its main components.

Disentangling demand and supply shocks in Albanian credit market using a survey approach: which of them affects more bank lending to firms (and households)?
Authors: Gerti Shijaku
This paper aims to analyse a conventional wisdom on a key question to understand whether and to what extent bank lending in Albania is a result of demand-side or/and supply-side factors.

Forecasting Albanian Time Series with Linear and Nonlinear Univariate Models
Authors: Blerina Vika, Ilir Vika
The main economic indicators in Albania exhibit irregular patterns since the 1990s that may affect economic analyses with linear methods. The purpose of this study is to assess the ability of nonlinear methods in producing forecasts that could improve upon univariate linear models. The latter are represented in our analysis by the classic autoregressive

Forecasting the Albanian short-term inflation through a Bayesian VAR Model
Authors: Meri Papavangjeli
In the context of the Bank of Albania’s primary objective of achieving and maintaining price stability, generating accurate and reliable forecasts for the future rate of inflation is a necessity for its successful realization.

An Estimation of the Natural Interest Rate in Albania
Authors: Eglent Kika, Olti Mitre

We estimate the natural rate of interest in Albania using the Bayesian Maximum Likelihood method and the Kalman Filter. The structure of the model used to identify the behaviour of the natural interest rate in time is based on the seminal work of Laubach and Williams (2003) and includes a joint estimation of the output gap and of potential growth.

The Albanian Medium Term Projection Model
Authors: Tibor Hledik, Eglent Kika, Olti Mitre
The Bank of Albania introduced a small semi-structural Medium-Term Projection Model (MPM) in 2013, as part of its forecasting toolkit, to support the monetary policy decision making process. This initial version of the model was built in 2011 in joint cooperation between the IMF, through a Technical Assistance (TA) program, and the Bank of Albania, in a bid to modernize the latter’s forecasting and policy analysis FPAS) and in conjunction with Bank of Albania’s strategic goal to move to a fully-fledged inflation targeting regime.

The global credit and Euro Area financial shocks: How important are they for Albania?
Authors: Bledar Hoda
Economies with open financial and capital account, high euroization and high foreign bank ownership are favorably exposed to global liquidity and foreign macro-financial shocks. In this study I assess how these forces have played out for Albania during the recent two decades.

Financial sector and macroeconomics links in MEAM
Authors: Lorena Skufi
This paper describes the links between financial sector and macroeconomic conditions into MEAM macro model. The focus is on banking lending rate, in terms of macroeconomic indicators impact, such as the probability of default of private sector and economic developments. Through this material we try to enrich MEAM macro model with financial indicators.
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