Cyprus Economic Policy Review 

About: Cyprus Economic Policy Review is an academic journal. The journal publishes majorly in the area(s): Recession & Population. It has an ISSN identifier of 1450-4561. Over the lifetime, 117 publications have been published receiving 828 citations.

Central Bank Independence and Economic Performance

Abstract: This paper examines the influence that several factors may have on the relationship between legal Central Bank Independence (CBI), on the one hand, and the inflation and real GDP growth on the other Using multivariate regression analysis for 39 OECD during the two periods, 1991-1998 and 1999-2006, we show that even if we include several control variables in the regression, the negative relationship between CBI and inflation, and the lack of relationship between CBI and the variability of real GDP growth remaining were unaffected Also, we decompose the index of CBI into its four components and we examine whether they matter for inflation, for real GDP growth and for the sacrifice ratio

Factors Affecting House Prices in Cyprus: 1988-2008

Abstract: In this paper we investigate the impact of various macroeconomic variables on house prices in Cyprus during the period 1988-2008. Furthermore, we examine how specific characteristics of the house affect its price. We find house prices to be particularly sensitive to changes in island’s population. They are also sensitive to the cost of building materials and labour, economic growth and the sterling-euro exchange rate. As regards the question which of these factors contributed most to the large increase in house prices during the period 1988-2008, our analysis points to increase in the cost of materials and labour, the population and the per capita Gross Domestic Product (GDP). In contrast, developments in the stock market and the increase in the number of foreign workers helped towards restraining house price increases.

Climate Change in Cyprus: Impacts and Adaptation Policies

Abstract: This paper provides an overview of facts and projections related to climate change in Cyprus until the end of the 21st century. It highlights the main climate change impacts foreseen and presents recommendations for the preparation of a national adaptation strategy. Coping with climate change is possible, provided that proactive actions are taken by both the public and the private sector. Public authorities need to set clear priorities and implement well designed policies. Most importantly, adequate monitoring mechanisms should be set up in order to provide much needed data which can send early warnings to policy makers and the public and can help avoid large natural and economic damages at a later stage. Enabling private adaptation investments and properly pricing the use of natural resources are key priorities for investing in a climate resilient economy.

The Banking System in Cyprus: Time to Rethink the Business Model? †

Abstract: Cyprus has a large banking system compared to its economy (total assets of 896% of Gross Domestic Product or GDP in 2010), relative to the average for the EU and the Eurozone (357% and 334% respectively in 2009). Even if one excludes the overseas operations of domestically-owned banks, the size of the banking system is still large and exceeds 7 times GDP. However, Cyprus is not unique in that respect: several other EU countries have similar or even larger banking systems (Figure 1). These systems grew significantly over the past decade (Figure 2) as a result of an accommodating global environment and policy measures by national authorities to promote them as international financial centers. It is only recently that financial crisis-induced deleveraging of internationally active banks and slowdown in cross-border capital flows have halted that trend.

A Decade Long Economic Crisis: Cyprus versus Greece

Abstract: The paper compares the recent economic crisis in Cyprus with the much larger and still on-going crisis in Greece, traces the causes behind their differences and assesses each country’s future economic prospects. Cyprus entered its crisis with less onerous macroeconomic imbalances, yet with less robust financial and real estate sectors. Cyprus delayed signing its MoU with the lenders but subsequently delivered quickly on the program requirements, front-loading the fiscal policy restrictions. Greece reduced its fiscal deficits, yet, after its economy stabilized and began recovering in 2014, it suddenly adopted in 2015 a very naive and backward-looking confrontational strategy with its lenders, which brought a second recession. Today, at the end of 2016, Cyprus has managed to keep its international comparative advantages and has the luxury to focus on its long-term growth strategy, having lost only 5% of its pre-crisis income. Greece, after having lost over 22% percent of its pre-crisis income, has not yet escaped its crisis, is still burdened by economic stagnation, an unsustainable public debt and unusually high tax rates that constrain growth. The two countries share common risks today: A very weak financial sector with unusually high no-performing loans, and an unusually low ratio of investment to GDP.