Original scientific paper
Cointegration analysis of the monthly time-series relationship between retail sales and average wages in Croatia
Dario Cziraky
Abstract
A dynamic econometric model of Croatian monthly retail sales and wages is estimated through testing sequential model reduction validity. Such an approach aims at developing well-performing and interpretable dynamic relationships as data-description models. In addition to the model in levels a more economically interpretable error correction model was estimated enabling direct evaluation of the short-run impact of wage change to retail change as well as the periodic adjustment to the long-run equilibrium. It was established that, both in the short-run and in the long run, retail sales respond to wages thus forming a stable dynamic relationship.
Keywords
Croatia; retail sales; wages; cointegration; equilibrium correction models; general-to-specific modelling
Hrčak ID:
6721
URI
Publication date:
1.7.2002.
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