Original scientific paper
https://doi.org/10.1080/1331677X.2022.2073460
Quantifying the probability of a recession in selected Central and Eastern European countries
Ciprian Necula
Bogdan Murarașu
Alina Radu
Cristina Anghelescu
Alina Zaharia
Abstract
The COVID-19 pandemic simultaneously affected most economic
sectors and has already caused severe worldwide social and economic
damage. In response, authorities introduced social distancing
measures, with an adverse impact on economic activity. If
policymakers were aware of the existing vulnerabilities, including
those derived from the positioning on the business cycle, resilience
could have been increased. The aim of this article is to
describe various methods of dating business cycles in several
Central and Eastern European (C.E.E.) countries, namely Czechia,
Hungary, Poland and Romania. Furthermore, a Probit model
regarding the probability of a recession is estimated, confirming
the adverse effects of the pandemic, in contrast with a brightening
outlook given vaccination campaigns and the E.U. recovery
package. However, in case of the Romanian economy, an in-sample
estimation showed a high probability of negative growth
rates even in a pre-pandemic world, due to the high macroeconomic
imbalances.
Keywords
probability of recession; business cycle dating; forecast
Hrčak ID:
303727
URI
Publication date:
31.3.2023.
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