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Tomislav Globan

Bio: Tomislav Globan is an academic researcher from University of Zagreb. The author has contributed to research in topics: European union & Debt. The author has an hindex of 6, co-authored 33 publications receiving 128 citations.

Papers
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TL;DR: In this article, the authors investigate the existence and characteristics of both the long and short-term relationships between FDI and the stock market in Croatia and conclude that there is no long-term relationship among observed variables.
Abstract: The aim of this paper is to investigate the existence and characteristics of both the long- and short-term relationships between FDI and the stock market in Croatia. The main hypothesis is that, in the long run, trends in FDI should determine the movement of the stock market through the channel of economic growth. However, in the short run, upward movement on the stock market positively affects Croatian FDI stock, as events on the stock market signalize the vitality and investment climate of the domestic market to foreign investors. The long-term connection is tested by two cointegration approaches ; the results of both models suggest the absence of a long-term relationship among observed variables, which may be explained by the lack of connection between FDI and economic growth in Croatia. The short-run relationship is investigated by a two- variable VAR model, and the results obtained are consistent with the theoretical assumptions, as the stock market did prove to be an important short-term determinant of FDI in Croatia.

23 citations

Journal ArticleDOI
TL;DR: The authors empirically analyzes the domestic and external inflation determinants for eight non-eurozone new EU member states (NMS), using a structural vector autoregression model, and finds that foreign shocks are a major factor in explaining inflation dynamics in the medium run, while the short-run inflation dynamics are mainly influenced by domestic shocks.
Abstract: This article empirically analyzes the domestic and external inflation determinants for eight non-eurozone new EU member states (NMS), using a structural vector autoregression model. Results indicate that foreign shocks are a major factor in explaining inflation dynamics in the medium run, while the short-run inflation dynamics are mainly influenced by domestic shocks. Moreover, the importance of the foreign inflation component has had a rising trend in the precrisis period in all NMS and mostly coincided with their accession to the EU. This trend ended with the onset of the global financial crisis. The study implicates the need to augment the classical Taylor rule with foreign factors in the case of small open economies.

20 citations

Posted Content
TL;DR: In this article, the authors examine the public debt determinants in EU new member states and propose a more successful containment of the rising debt levels, while considering the high price of potentially irresponsible public finance management.
Abstract: This paper analyses public debt determinants in EU new member states. The aim is to examine the fiscal position of these countries, as well as to offer proposals for a more successful containment of the rising debt levels. The paper attempts to answer the key question: does fiscal consolidation (the numerator) or economic growth (the denominator) have a stronger impact in determining the debt-to-GDP ratio? Results of the panel data analysis showed that by achieving a more balanced government budget, public debt growth decreases, but the effect is rather small. Conversely, estimated GDP growth parameters are much greater. Results imply that the sovereign debt crisis should be resolved by stimulating economic growth, while bearing in mind the high price of potentially irresponsible public finance management.

14 citations

Journal ArticleDOI
01 Jan 2015-Empirica
TL;DR: In this paper, the authors examined the temporal dynamics of capital flow determinants and extract components of capital inflows in non-eurozone EU new member states that are influenced by domestic and foreign shocks separately.
Abstract: Due to the recent financial crisis and ensuing sudden stop episodes, the question whether capital inflows are dominated by push or pull factors has become an extremely important policy question in small, open and integrated economies. The aim of this paper is to empirically measure, in a methodologically innovative manner, the extent to which the movement of capital inflows in the non-eurozone European Union new member states (EU NMS) has been determined by domestic and external factors and discuss potential consequences of such trends, thereby filling the existing literature gap, i.e. the lack of empirical papers that systematically model the temporal dynamics of capital flow determinants. The paper uses econometric methods, i.e. historical decomposition from a structural vector autoregression model, to examine the temporal dynamics of capital flow determinants and extract components of capital inflows in non-eurozone EU NMS that are influenced by domestic and foreign shocks separately. Econometric analysis confirmed the hypothesis that macroeconomic factors in the eurozone are becoming increasingly dominant determinants of capital inflows in EU NMS, especially after the EU accession, and proved that these trends can be connected to rising financial integration levels of analysed countries. Furthermore, results suggest that the rising influence of push factors can be connected with the higher volatility of capital inflows, thus making host countries more prone to sudden stop episodes. The paper uncovers several non-negligible macroeconomic risks of large capital inflows determined by push factors for domestic economic authorities in small integrated economies and points out the need to make efforts to strengthen the domestic financial and regulatory system to ensure the capability of these economies in efficiently managing capital inflows.

11 citations

Journal ArticleDOI
TL;DR: In this article, the co-movements of the current account and the fiscal balance cannot be explained by the twin deficit theory in countries with indirect tax-oriented systems, and only the structural economic transformation and export orientation of the economy may reverse the causality direction between two deficits.
Abstract: Summary: The general theory of twin deficits hypothesis does not consider specific characteristics of domestic tax systems, ie whether the revenue side of the budget is dominated by indirect or by direct taxes The main hypothesis of the paper is that in countries with fiscal systems dominated by indirect taxes, the deterioration of the current account balance would imply higher fiscal revenues due to larger imports and consumption The hypothesis is based on the characteristics of domestic tax systems of Bulgaria, Croatia, Poland and Romania in which indirect tax revenues account for the majority of total budget tax revenues Results suggest that the co-movements of the current account and the fiscal balance cannot be explained by the twin deficit theory in countries with indirect tax-oriented systems These results imply that only the structural economic transformation and export orientation of the economy may reverse the causality direction between two deficits

10 citations


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01 Jan 2014
TL;DR: This Review presents basic facts regarding the long-run evolution of income and wealth inequality in Europe and the United States and discusses possible interpretations and lessons for the future.
Abstract: This Review presents basic facts regarding the long-run evolution of income and wealth inequality in Europe and the United States. Income and wealth inequality was very high a century ago, particularly in Europe, but dropped dramatically in the first half of the 20th century. Income inequality has surged back in the United States since the 1970s so that the United States is much more unequal than Europe today. We discuss possible interpretations and lessons for the future.

580 citations

Posted Content
TL;DR: In this article, the authors developed a model of foreign direct investments (FDI) and foreign portfolio investments (FPI) and described an information-based trade off between direct investments and portfolio investments.
Abstract: The paper develops a model of foreign direct investments (FDI) and foreign portfolio investments (FPI).The model describes an information-based trade off between direct investments and portfolio investments. Direct investors are more informed about the fundamentals of their projects. This information enables them to manage their projects more efficiently. However, it also creates an asymmetric-information problem in case they need to sell their projects prematurely, and reduces the price they can get in that case. As a result, investors, who know they are more likely to get a liquidity shock that forces them to sell early, are more likely to choose portfolio investments, whereas investors, who know they are less likely to get a liquidity shock, are more likely to choose direct investments. FDI is characterized by hands-on management style which enables the owner to obtain relatively refined information about the productivity of the firm. This superiority of FDI relative to FPI, comes with a cost: a firm owned by the relatively well-informed FDI investor has a low resale price because of a "lemons" type asymmetric information between the owner and potential buyers. The model can explain several stylized facts regarding foreign equity flows, such as the larger ratio of FDI to FPI inflows in developing countries relative to developed countries, and the greater volatility of FDI net inflows relative to FPI net inflows.

88 citations

Posted Content
TL;DR: In this article, the authors examined the impact of macroeconomic variables on stock prices and established that there is cointegration between macroeconomic variable and stock prices in Ghana indicating long run relationship.
Abstract: This study examines the impact of macroeconomic variables on stock prices. We use the Databank stock index to represent the stock market and (a) inward foreign direct investments, (b) the treasury bill rate (as a measure of interest rates), (c) the consumer price index (as a measure of inflation), (d)Average crude oil prices , and (e) the exchange rate as macroeconomic variables. We analyse quarterly data for the above variables from 1991.1 to 2007.4. employing cointegration test, vector error correction models (VECM). These tests examine both long-run and short-run dynamic relationships between the stock market index and the economic variables. The paper established that there is cointegration between macroeconomic variable and Stock prices in Ghana indicating long run relationship. The VECM analyses shows that the lagged values of interest rate and inflation has a significant influence on the stock market. The inward foreign direct investments, the oil prices , and the exchange rate demonstrate weak influence on price changes. In terms of policy implication, the establishment of lead lag relation indicate that the DSI is not informational efficient with respect to interest rate, inflation inward FDI, Exchange rate and world Oil prices.

62 citations

Posted Content
TL;DR: In this paper, the determinants of net capital income flows within the United States were studied and it was shown that frictions associated with national borders are likely to be the main explanation for 'low' international capital flows.
Abstract: We study the determinants of net capital income flows within the United States. We analyze a simple multi-state neoclassical model in which total factor productivity varies across states and over time and capital flows freely across state borders. The model predicts that capital will flow to states with relatively high output growth. Since relative growth patterns are persistent such states are also high output states, which implies that high output will be associated with inflows of capital and net outflows of capital income. Our empirical findings correspond well to the predictions of the model and indicate persistent net capital income flows and net cross-state investment positions between states which are an order of magnitude larger than observed capital income flows between countries. Thus, our results imply that frictions associated with national borders are likely to be the main explanation for 'low' international capital flows.

55 citations

Posted Content
TL;DR: The authors analyzes the impact of financial integration on the transmission of monetary policy in a New Keynesian open economy framework and concludes that monetary policy is more effective with the highest degree of both financial and real integration.
Abstract: This paper analyzes the way in which international financial integration affects the transmission of monetary policy in a New Keynesian open economy framework. It extends Woodford’ (2010) analysis to a model with a richer financial markets structure, allowing for international trading in multiple assets and subject to financial intermediation costs. Two different forms of financial integration are considered, in particular an increase in the level of gross foreign asset holdings and a decrease in the costs of international asset trading. The simulations in the calibrated model show that none of the analyzed forms of financial integration undermine the effectiveness of monetary policy in influencing domestic output and inflation. Under realistic parameterizations, monetary policy is more, rather than less, effective as the positive impact of strengthened exchange rate and wealth channels more than offsets the negative impact of weakened interest rate channels. The paper also analyzes the interaction of financial integration with trade integration, varying both the importance of trade linkages and the degree of exchange rate pass-through. These interactions show that the positive effects of financial integration are amplified by trade integration. Overall, monetary policy is most effective in parameterizations with the highest degree of both financial and real integration.

27 citations