How hard does the tax bite hurt? Croatian vs. European worker

The main objective of this paper is to analyse the tax burden in Croatia and to find out whether and how the size and the structure of total labour costs affect the functioning of the labour market. The tax wedge, together with employment and unemployment rates, is brought into play to classify EU countries and Croatia into clusters using K-means and hierarchical clustering. The results show that Croatia is classified among countries with a high tax wedge and a high unemployment rate. The same holds when, instead of the tax wedge, personal average tax rate is considered. However, in Croatia most of the tax burden is borne by the employees, not by the employers. Thus, the average Croatian industry worker bears a relatively high tax burden, which is exacerbated when the newly introduced “crisis tax” and increased VAT are taken into account

Empirical assessment of stabilization effects of fiscal policy in Croatia

The aim of this paper is to assess the stabilization effects of fiscal policy in Croatia in a structural vector autoregression framework as proposed by Blanchard and Perotti (2002). Empirical studies of fiscal policy effects show that results are contradictory and do not unanimously agree, except for one fact: a positive government spending shock has a positive effect on output. This study inspects the effects of government spending and tax shocks on a set of macroeconomic variables (output, prices, interest rates, private consumption, private investment, employment and wages). Results prove that the fiscal transmission mechanism in Croatia works mainly in a Keynesian manner. Output reacts negatively to a tax shock and positively to government spending shock. The output multiplier is above 2 at impact and the effect is significant throught the whole time span. The negative effect of the tax shock is mostly driven by indirect (not direct) taxes, while the positive effect of a government spending shock is influenced by government consumption and government investment, but the effect of the latter is more significant when private consumption and private investment responses are observed

Book review: Tax Reforms: Experiences and Perspectives

Nem

Empirical assessment of stabilization effects of fiscal policy in Croatia

The aim of this paper is to assess the stabilization effects of fiscal policy in Croatia in a structural vector autoregression framework as proposed by Blanchard and Perotti (2002). Empirical studies of fiscal policy effects show that results are contradictory and do not unanimously agree, except for one fact: a positive government spending shock has a positive effect on output. This study inspects the effects of government spending and tax shocks on a set of macroeconomic variables (output, prices, interest rates, private consumption, private investment, employment and wages). Results prove that the fiscal transmission mechanism in Croatia works mainly in a Keynesian manner. Output reacts negatively to a tax shock and positively to government spending shock. The output multiplier is above 2 at impact and the effect is significant throught the whole time span. The negative effect of the tax shock is mostly driven by indirect (not direct) taxes, while the positive effect of a government spending shock is influenced by government consumption and government investment, but the effect of the latter is more significant when private consumption and private investment responses are observed

To Pollute or Not To Pollute? Exploring MARPOL Efficiency in the Adriatic Sea

This study explores the efficiency level of the current international regulatory framework (MARPOL) in preventing sea pollution during maritime transportation. We employ a game-theoretic approach that models the decisions of shipowners and countries, with respect to the treatment and disposal of waste, where shipowners\u27 decisions are based on comprehensive estimations of all waste management costs for all categories of waste (i.e. all MARPOL Annexes) differentiated across six types of standard risk vessels, while countries\u27 decisions are based on estimates of all societal costs of (im)proper ship waste management. We focus on the Adriatic Sea case study and evaluate the game separately for members and non-members of the Paris Memorandum of Understanding (Paris MoU). Our main results seem to indicate that shipowners are generally motivated to be environmentally friendly if sailing Paris MoU waters. Otherwise, shipowners are merely motivated to pollute, due to low inspection rates and expected fines.This study explores the efficiency level of the current international regulatory framework (MARPOL) in preventing sea pollution during maritime transportation. We employ a game-theoretic approach that models the decisions of shipowners and countries, with respect to the treatment and disposal of waste, where shipowners\u27 decisions are based on comprehensive estimations of all waste management costs for all categories of waste (i.e. all MARPOL Annexes) differentiated across six types of standard risk vessels, while countries\u27 decisions are based on estimates of all societal costs of (im)proper ship waste management. We focus on the Adriatic Sea case study and evaluate the game separately for members and non-members of the Paris Memorandum of Understanding (Paris MoU). Our main results seem to indicate that shipowners are generally motivated to be environmentally friendly if sailing Paris MoU waters. Otherwise, shipowners are merely motivated to pollute, due to low inspection rates and expected fines

ANALYSIS OF CROATIAN COMMODITY EXCHANGE

Danas ne postoji nacionalno gospodarstvo koje nije barem u određenoj mjeri ovisno o svjetskom gospodarstvu, odnosno svjetskom tržištu. Ta ovisnost dovodi do veće, ali i specijaliziranije, proizvodnje dobara među zemljama, a samim time i specijaliziranije robne razmjene. Značaj i uloga vanjske trgovine razlikuje se od gospodarstva do gospodarstva jer ovise o stupnju razvijenosti tog gospodarstva, strukturi, veličini tržišta, gospodarskih kretanja u svijetu i o ekonomskoj politici određene zemlje. U ovom radu razmatra se robna razmjena Republike Hrvatske koja je statistički prikazana prema Standardnoj međunarodnoj klasifikaciji i Nacionalnoj klasifikaciji djelatnosti i ekonometrijski analizirana temeljem kvartalnih podataka u razdoblju od zadnjeg kvartala 1994. do zadnjeg kvartala 2007. godine i to pomoću metode najmanjih kvadrata. Ciljevi ovog rada su utvrđivanje trenutnog položaja i strukture vanjske trgovine Republike Hrvatske, pronalazak ključnih čimbenika utjecaja na izvoz i uvoz za Hrvatsku te empirijsko potvrđivanje teorijskih implikacija devalvacije na robnu razmjenu kao i donošenje određenih zakonitosti hrvatske robne razmjene.Not a single national economy exists today that is not, at least to a certain extent, dependant on world economy, i.e. world market. This dependence leads to a higher, and also more specialized production of goods among the countries, and consequently to a more specialized commodity exchange. The importance and role of foreign trade varies from economy to economy, because they depend on the development of that economy, its structure, the size of the market, economic movements in the world and the economic policy of the country. This paper analyzes the commodity exchange of the Republic of Croatia, statistically presented according to the Standard International Classification and the National Classification of Activities, and econometrically analyzed on the grounds of quarterly data in the period from the last quarter of 1994 to the last quarter of 2007 using the least squares method. The aims of the paper are the determination of the current position and the structure of foreign trade of the Republic of Croatia, the finding of key factors affecting Croatian exports and imports and the empirical confirmation of theoretical implications of devaluation on commodity exchange as well as the determination of certain laws of Croatian commodity exchange

The power of fiscal multipliers in Croatia

This paper investigates fiscal multipliers in Croatia in the period 1996Q1-2011Q4. For this purpose, a Blanchard Perotti three variable baseline SVAR is employed as a no regime-switch model, along with a four variable baseline STVAR as a regime-switch model. Results show that during recessions fiscal multipliers in Croatia tend to be much larger and move in line with Keynesian assumptions, i.e. a positive government spending shock increases output, private consumption and private investment, while oppositely a positive tax shock worsens the same macroeconomic variables. Moreover, during recession times government spending for purchases of goods and services seems to be the most effective fiscal instrument for boosting economic activity

The determinants of regional migration in Croatia*

Migracije su obilježile značaj utjecaj u Hrvatskoj, posebice nakon njezinog ulaska u Europsku Uniju. Stoga se nekoliko studija usredotočilo na istraživanje (međunarodnih/vanjskih) migracija, dok su unutarnje migracije na primjeru Hrvatske gotovo nezastupljene u znanstvenoj literature. Ovaj rad istražuje determinante unutarnjih migracija na razini NUTS3 u Hrvatskoj u razdoblju od 2000. do 2019. godine koristeći panel s fiksnim učincima. Rezultati ukazuju kako su regionalne migracije u Hravtskoj u skladu s teoretskim postavkama. Životni standard i mjere produktivnosti rada su, uz zaposlenost i place, glavni ekonomski čimbenici odnosno pokretači migracijskih priljeva i odljeva. Dodatno, županije koje ostvaruju značajne turističke rezultate privlače priljev i destimuliraju odljev ljudi. Povećanje udjela dodane vrijednosti u sektoru poljoprivrede, šumarstva i rabarstva također smanjuje migracijske priljeve među županijama. Štoviše, zaštita okoliša također je značajna odrednica regionalnih migracija u Hrvatskoj.Migration has had a great impact on Croatia, especially after it joined the EU. Thus, several studies have focused on international migration compared to regional migration which is under investigation. This study sheds some light on the determinants of internal migration at the NUTS3 level in Croatia in the 2000-2019 period relying on a fixed effects panel estimation. The results show that regional migration in Croatia is in line with the stylized facts on migration. The living standard and (labour) productivity measures, along with employment and wages are the main economic drivers of migration inflows and outflows. However, regions with substantial tourism activity attract inflows and disincentivize outflows of people, while regions with a high share of agriculture, forestry, and fisheries in the value-added decrease internal migration inflows. Moreover, environmental protection results also being a significant determinant of regional migration