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Analysing the Relevance of the MIP Scoreboard's Indicators

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  • Domonkos Tomáš
  • Ostrihoň Filip
  • Å ikulová Ivana
  • Å iraňová Mária

Abstract

The EU established an early warning system by introducing the Macroeconomic Imbalance Procedure (MIP) in the wake of the recent recession. Nevertheless, it has been found by some authors to be rather vague when launching the Excessive Imbalances Procedure. Performed analysis reflects on such views and treats the MIP indicators as a system while assessing the significance of all particular variables separately. This assessment was accomplished by applying a multivariate unbalanced logit model, utilising all 14 MIP headline indicators, using time horizons ranging from one to three years before crisis, which was represented by periods with output gap lower than negative 2 per cent. The approach was confronted with the estimates of a linear probability model to provide an idea about the robustness of the results. In the short term, activity rates, youth unemployment rates and private sector debt are the best performing indicators, complemented by current account balances in the long term.

Suggested Citation

  • Domonkos Tomáš & Ostrihoň Filip & Å ikulová Ivana & Å iraňová Mária, 2017. "Analysing the Relevance of the MIP Scoreboard's Indicators," National Institute Economic Review, National Institute of Economic and Social Research, vol. 239(1), pages 32-52, February.
    • Handle: RePEc:sae:niesru:v:239:y:2017:i:1:p:r32-r52
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    Cited by:

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    2. Erhart, Szilard, 2019. "Exposition, climax, denouement: Life-cycle evaluation of the recent financial crisis in the EU by linking the ESRB financial crisis database to the European Commission's Macroeconomic Imbalance Proced," ESRB Working Paper Series 102, European Systemic Risk Board.
    3. Maria Siranova & Marek Radvanský, 2018. "Performance of the Macroeconomic Imbalance Procedure in light of historical experience in the CEE region," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 21(4), pages 335-352, October.

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    More about this item

    Keywords

    MIP scoreboard; Early warning systems; Binary response models; Logit;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management

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