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

The impact of housing markets on banks’ risk-taking behavior: evidence from CESEE
Authors: Elona Dushku, Antje Hildebrandt, Erjona Suljoti
This study empirically evaluates the impact of housing market dynamics and banks’ housing market exposure on banking sector stability in Central, Eastern and Southeastern Europe (CESEE). We investigate whether there are differences between the behavior of banks located in CESEE EU Member States and the behavior of banks located in the Western Balkans.

Bank stability and its relationship with competition among banks after global financial crisis. New evidences from Albanian banking sector
Authors: Gerti Shijaku
This paper analyses the relationship between competition and banking stability in the Albanian banking sector during the period 2008 - 2017. For this reason, an index of banking competition, such as the Boone indicator, is constructed. Other alternative indicators are also calculated, such as: the Lerner index and adjusted Lerner index; and the competition indicator, which relates to profit elasticity.

Factors behind low inflation in Albania
Authors: Evelina Çeliku, Ermelinda Kristo, Iris Metani, Enian Çela, Gent Hashorva
This working paper explores the main factors contributing to low inflation in Albania in the post-crises years in an environment characterized by relatively stronger economic growth, lower unemployment rates and improved confidence.

The Price Formation Process in the Albanian Economy: A Macro Modelling Approach
Authors: Lorena Skufi, Eglent Kika
This paper provides the modelling framework of the price formation block in the macro econometric Albanian model (MEAM). MEAM is constructed on neo-Keynesian theoretical principles, implying a vertical long-run aggregate supply curve with aggregate demand factors impacting supply in the short-run.

Households’ Demand in Albania: Measuring the Effects of Income and Price Shocks to Consumer Demand using Micro Data
Authors: Ola Cami
This paper applies a Quadratic Almost Ideal Demand System in Albanian pooled cross-sections data of almost 9000 households for the period 2005-2012. We bring together a comprehensive demand system composed of eight commodity groups matching the Institute of Statistics’ ECOICOP good classification: food, alcohol and tobacco, clothing, utilities, household goods, transportation, entertainment and other goods to obtain income compensated, uncompensated and cross-price price elasticities for each of these commodities.

Financial literacy in Albania: 2015 survey results analysis (November 2018)
Authors: Egnis Isaku, Kliti Ceca, Arlinda Kolenico
This paper presents an analysis of the data collected from the Survey on Financial Literacy at a country level for Albania, according to the methodology developed by OECD/INFE. It reveals the main findings, focusing on the most im-portant aspects of the three components of financial literacy measured by the questionnaire: financial knowledge, behavior and attitudes, as well as indicators of financial inclusion.

A financial cycle for Albania
Authors: Vasilika Kota, Arisa Goxhaj (Saqe)
The assessment of the financial cycle and its various phases is important for building appropriate macroprudential policies and instruments aimed at mitigating systemic risk. The main purpose of this material is to assess the financial cycle in Albania by creating a synthetic indicator as its potential measure.

Natural rate of unemployment – Reduced form approach
Authors: Enian Cela, Lorena Skufi
In this paper, we attempt to estimate a series of the natural rate of unemployment (NAIRU) for Albania in the period 1998-2012 applying a State-Space model featuring Kalman Filter. The approach is based on an Augmented Phillips Curve with NAIRU specified as an unobserved variable. The constraint is activated upon the path of the NAIRU.

Does Primary Sovereignty Risk Matter for Bank Stability? Evidence from the Albanian Banking System
Authors: Gerti Shijaku
This paper analyses empirically the internal and external factors related to banking stability, especially if primary sovereignty risk affects banking stability. For this reason, we have followed a new method for calculating a risk index for the Albanian banking system, which is based on the balance sheet data reported by banks and reflects the banking situation in individual terms. The model is estimated based on a two-step General Method of Moments (GMM) approach with panel data for the period 2008 Q03 – 2015 Q03.

Potential output and growth, output and unemployment gap in Albania – Comparative analysis of recent estimations - 2015
Authors: Evelina Çeliku
The study project aims to re-estimate potential output, the natural rate of unemployment and the respective gaps based on existing and new approaches available in the case of Albania. Results have confirmed that potential growth has shrank and the natural rate of unemployment has increased since 2009. Re-estimations have validated past medium-term projections and monetary policy decision-making. At the same time, they assist in the orientation for structural reforms towards sustainable and inclusive economic growth.
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