Research Papers

Capital flows are critical for growth in small open economies (SoE) and emerging ones. Catching up with advanced economies in terms of productivity, consumption smoothing and risk sharing all rely on the size of capital and financial flows.

The purpose of this article is to assess the information content of monetary aggregates in predicting overall prices in Albania. The relevance of money is evaluated by comparing forecasts derived from no-money versus money-based models.

This article investigates the role of economic, financial and demographic indicators in forecasting house prices in Albania. The pool of variables is drawn from empirical studies for advanced and developing countries.

Core inflation is traditionally measured as the inflation rate of excluding food and energy prices. This paper presents an alternative calculation of core inflation for the Albanian economy, namely the weighted median inflation rate. The calculation is constructed upon the CPI in a detailed seven-digit level for the period 2019-2024, and in a four-digit level for 2009-2018, at a monthly frequency.

The progressive reduction of the key interest rate over recent years, exemplifying the accommodative monetary policy implemented by the Bank of Albania, necessitates a thorough examination of the repercussions of monetary policy on both bank profitability and the stability of the financial sector in Albania.

The Macro Econometric Albanian Model (MEAM) is a semi-structural model consistent with neo-classical growth models for small-open economies. While the long-run properties are closely linked to theory, the short-run dynamics are estimated and data driven.

This paper describes the evolution of the macro stress testing of the banking sector applied in the Bank of Albania over the past 15 years. It gives details about the stress testing methodologies used over this horizon, with emphasis on the last two approaches: the one used in 2013-2021 and especially the one used currently, i.e. a new approach that started in 2022.

This paper provides a simple new empirical alternative approach, which is based on daily data for the period 2008-2020 and various binary indicators, and it builds a set of econometric models that can be easily used to predict short-term and medium-term liquidity needs in the banking system over a chosen time horizon.

In the absence of a treatment or a vaccine, the economic fallout due to a pandemic is undisputable either due to the spread of the pandemic and lives lost or due to the lockdowns imposed to limit the spread.

The scope in this study is to assess the impact of unconventional monetary policy (UMP) of European Central Bank (ECB) on the dynamics of the Albanian economy.