Research Papers

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.

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.

The agricultural sector has been and continues to be a sector with a significant contribution to the Albanian economy, both in terms of value added and the number of employees. Considering its importance and role in the economy, attention to this sector and its development has been and continues to be a priority for both the private and public sector.

This report presents a summary of the results obtained from the financial and borrowing situation of mikro enterprises (1 to 4 employees), regarding to their access to finance, as well to their financial situation. This survey conducted for the first time in June 2017, by the Bank of Albania, in cooperation with INSTAT, aims to provide an overview of the financial situation of micro enterprises (1-4 employees), as well as supplementing information for small and large enterprises, which are part of this survey since 2010.

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.

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.

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.

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.

Based on the experience of the Bank of Albania, the paper proposes a framework to estimate the interest rate lower bound in small, open, and euroized economies. The paper introduces a stylized monitoring tool to assess the unintended consequences of low policy rates. The paper is the first attempt to estimate the impact of low interest rate on the public’s demand for banknote by denomination.

This paper aims at offering a statistical evaluation methodology on the forecasting performance of the GAP model, a semi-structural economic model used to support monetary policy decisions at the Bank of Albania since 2011. In this paper we evaluate the forecasts produced purely by the model, and not those used by the Monetary Policy Department, which also include the expert judgment and are not made public. The analytical approach used in the discussion material combines a statistical diagnostic look-up consisting in statistical measurements as RMSE and BIAS important to understand the forecasting performance of the model as an instrument in one, two and three years ahead time horizons.