Central European Economic Journal

Central European Economic Journal CEEJ publishes original theoretical and empirical research papers in the field of economics

🔍 Ever heard of a Z as in ... Z-Score? It’s like the “Weirdness Detector” of economic data.Imagine you and your friend...
07/07/2025

🔍 Ever heard of a Z as in ... Z-Score? It’s like the “Weirdness Detector” of economic data.

Imagine you and your friends track your monthly coffee spending. Most of you spend around $30–$50, but one friend spends $150 every month. How do you know if that $150 is really unusual or just a bit more than average?

Enter the Z-Score — it tells you exactly how far a number is from the average, measured in “standard deviations.” If your friend’s coffee spending has a Z-Score of 3, that means it’s 3 times the typical variation away from your group’s average. In other words, it’s super unusual!

In economics, Z-Scores help spot these “outliers” in all sorts of data — from inflation rates in different countries, to stock market returns, to income levels across regions. If a country’s unemployment rate has a high Z-Score, economists know it’s worth investigating: Is it a policy issue? A sudden shock? Or maybe just weird data?

So next time you see a weird number in your dataset, think: What’s its Z-Score? It might be telling you a story worth uncovering.

What’s the weirdest “outlier” you’ve spotted in your data?

Y as ... Yardstick Competition — and why it’s a clever tool for better public servicesImagine your city is deciding ho...
30/06/2025

Y as ... Yardstick Competition — and why it’s a clever tool for better public services

Imagine your city is deciding how to set water prices. But instead of guessing what’s fair, the regulator looks at how neighboring cities price water and runs their utilities. If City A charges way more or delivers poorer service than City B or C, it faces pressure to improve — or risk public backlash.

This comparison-driven approach is called Yardstick Competition. It’s like benchmarking but with teeth: regulators use the performance of similar firms or regions as a “yardstick” to measure and incentivize efficiency.

Why does this matter?

Public utilities and services often lack the competitive pressure found in markets, since they serve fixed regions or have monopolies. Yardstick competition introduces indirect competition, encouraging cost savings, better quality, and fairer prices — without a free market.

In economic research, yardstick competition helps analyze and design smarter regulation, ensuring public services work better for everyone.

Ever seen yardstick competition in action in your industry or city?

What Drives Price Dispersion in the European E-commerce Industry? https://sciendo.com/pl/article/10.1515/ceej-2017-001...
27/06/2025

What Drives Price Dispersion in the European E-commerce Industry? https://sciendo.com/pl/article/10.1515/ceej-2017-0017

by Kristóf Gyódi, Maciej Sobolewski, Michał Ziembiński

How integrated is the EU’s Digital Single Market when it comes to online pricing?

This paper presents a novel approach to measuring price dispersion in European e-commerce, using a custom-built web-scraping tool to collect pricing data from price comparison websites in 26 EU countries. The authors analyze prices for 182 branded products across key categories such as fashion, electronics, software, and cosmetics.

📊 Key findings:

Significant price dispersion (20–40%) remains, even after VAT adjustments.

Dispersion is linked to cost structures and income-based price discrimination.

There is clear potential for expanding cross-border e-commerce, but the welfare implications of reduced price differences are complex and context-dependent.

This research contributes important insights into online market fragmentation and the ongoing challenges and trade-offs in building a truly integrated EU digital economy.

🧠

🔎 X is for X-efficiency – one of the lesser-known but powerful ideas in economic research!Coined by Harvey Leibenstein...
23/06/2025

🔎 X is for X-efficiency – one of the lesser-known but powerful ideas in economic research!
Coined by Harvey Leibenstein in 1966, X-efficiency describes why firms or institutions may fail to reach maximum productivity even when they have all the resources they need. The culprit? Human behavior: lack of motivation, poor management, or simply organizational slack.
This is different from allocative inefficiency—here, it’s not about using the wrong mix of inputs, but not using them well enough.
📉 You see X-inefficiency in:
Public services with weak performance incentives
Monopolies and highly regulated sectors
Bureaucracies that lack competitive pressure
Why does it matter?
Because tackling X-inefficiency—through better incentives, management, or workplace culture—can unlock large hidden productivity gains.
🧠 Want to dig deeper?
Here are some foundational readings:
Leibenstein, H. (1966). Allocative Efficiency vs. X-Efficiency, AER.
Stigler, G. (1976). The Xistence of X-Efficiency, AER.
Perelman, S. (2011). Productivity and Efficiency, JEP.
Frantz, R. (2007). X-efficiency and Behavioral Economics, Palgrave.
Next time someone says “We just need more funding” — ask whether they’ve already used what they have efficiently 😉
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🔍 Can tweaking default technical indicators boost trading performance?In a world where financial markets move in milli...
20/06/2025

🔍 Can tweaking default technical indicators boost trading performance?

In a world where financial markets move in milliseconds, intraday trading strategies and technical precision matter more than ever. A paper published in the Central European Economic Journal (June 2023) explores exactly that.

📄 Modification of technical analysis indicators and increasing the rate of return on investment

by Paweł Oktaba and Małgorzata Grzywińska- Rąpca

📌 Read the paper here https://sciendo.com/pl/article/10.2478/ceej-2023-0009

🗓 Using MetaTrader4 and focusing on the EUR/USD pair, the authors test the effectiveness of a strategy based on Parabolic SAR and RSI indicators—both with default and modified parameters.

🧪 What did they find?

➡️ Adjusting indicator settings can significantly affect trading outcomes, challenging the assumption that default configurations are always optimal.

➡️ Even minor tweaks to technical analysis tools can lead to material differences in returns and signal accuracy, especially in the fast-paced OTC Forex market.

📈 This study adds to the growing body of evidence that technical analysis isn’t just about which tools you use—but how you configure them. A must-read for traders, economists, and finance students alike.

W as on ...🔍 What on Earth is a Walrasian Equilibrium — and why should you care?In the 19th century, Léon Walras had a...
16/06/2025

W as on ...🔍 What on Earth is a Walrasian Equilibrium — and why should you care?
In the 19th century, Léon Walras had a wild idea: what if markets could magically find a price for every good such that supply equals demand in all markets simultaneously?
No shortages, no surpluses — just balance.
Welcome to the world of Walrasian Equilibrium.
📊 Today, this concept still underpins general equilibrium models used by central banks, development economists, and policy designers. It assumes:
Perfect competition
Complete markets
Price-taking behavior
No externalities
...and a very powerful auctioneer setting prices. 📣
💡 But here’s the twist:
While Walrasian Equilibrium is elegant, real economies are messier. Modern research asks:
What happens when prices don’t adjust instantly?
What if agents have market power or incomplete information?
What if there’s no auctioneer?
These critiques led to entire fields like search theory, incomplete markets models, and computational general equilibrium. So next time someone says "markets always clear," ask:
“Walrasian… or just wishful?”
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🔍 Exploring the Nexus Between Financial Sustainability and DevelopmentWe’re pleased to share a thought-provoking paper...
13/06/2025

🔍 Exploring the Nexus Between Financial Sustainability and Development

We’re pleased to share a thought-provoking paper published in Central European Economic Journalthat revisits and reframes mainstream theories of financial sustainability and financial development — two core pillars of today’s economic discourse.

Evaluating the Relationship Between Financial Sustainability and Socio-Economic Development of Countries

by Viktoriia Kremen Inna Shkolnik and Olha Kremen

🧠 The authors propose a more dynamic understanding of financial development — not as a static goal, but as a complex, evolving system shaped by policy choices and market behavior.

📊 Using a matrix methodology, the study uncovers how the interplay between financial sustainability and development diverges across developed and developing countries, providing evidence that national differences stem not only from institutional maturity, but from the structural relationships between policy, finance, and growth.

⚙️ Why it matters:

Brings clarity to ambiguous definitions in the literature

Offers an evaluative framework relevant for policymakers and international financial institutions

Encourages a differentiated approach to financial strategy across regions

📄 Read the full article here: https://sciendo.com/pl/article/10.2478/ceej-2019-0003

🗞️

🔬📊 Deep Dive into Economic Research: Understanding V as ... Vector Autoregression (VAR)In empirical economics, capturi...
09/06/2025

🔬📊 Deep Dive into Economic Research: Understanding V as ... Vector Autoregression (VAR)

In empirical economics, capturing the dynamic relationships among multiple time series variables is crucial. This is where Vector Autoregression (VAR) models come into play — a powerful statistical framework extensively used in macroeconomics and finance.

What is VAR?

A VAR model generalizes univariate autoregressive models by allowing multiple endogenous variables to influence each other simultaneously over time. Instead of analyzing a single variable in isolation, VAR captures the interdependencies among a vector of variables.

Why is it important?

Endogeneity & feedback loops: Economic variables rarely evolve independently. For example, GDP, inflation, and interest rates continuously affect one another. VAR models accommodate these mutual interactions.

Forecasting & policy analysis: VARs provide a flexible structure for forecasting multiple economic indicators jointly and simulating responses to shocks (impulse response functions).

Structural interpretation: With additional identification assumptions, researchers can extract structural shocks, enabling analysis of causal mechanisms behind economic fluctuations.

How does it work?

Each variable in the system is modeled as a linear function of its own lagged values and the lagged values of all other variables in the vector. This multivariate time series approach allows for rich temporal dynamics without imposing strict theoretical restrictions upfront.

Applications:

Evaluating monetary policy impacts

Studying interactions between financial markets and the real economy

Analyzing macroeconomic shocks during crises (e.g., COVID-19)

Exploring business cycle dynamics

VAR models remain a cornerstone of quantitative economic research, helping scholars and policymakers unravel complex temporal interactions within economies.

📄COVID-19 and Fiscal Sustainability in Poland: Can the No-Ponzi Condition Still Hold?"The COVID-19 pandemic wasn't jus...
06/06/2025

📄COVID-19 and Fiscal Sustainability in Poland: Can the No-Ponzi Condition Still Hold?"

The COVID-19 pandemic wasn't just a public health crisis — it deeply reshaped fiscal realities across Europe. This oaoer - Public Debt Sustainability and the COVID Pandemic: The Case of Poland

by Agnieszka Kłysik-Uryszek and Tomasz Uryszek examines what it meant for public debt sustainability in Poland.

💡 Key question:

Did the pandemic undermine Poland’s ability to produce fiscal surpluses — and thus, its long-term debt sustainability?

🔍 In the analysis, the authors tested a clear hypothesis:

The pandemic period disallowed the production of primary surpluses and increased the level of fiscal unsustainability in Poland.

Using data from Eurostat and the European Commission, they applied:

📊 The Primary Gap Indicator (short-term assessment)

📉 The No-Ponzi Game Condition (long-term sustainability check)

Both grounded in the theory of intertemporal budget constraints.

📈 What was found?

Empirical results confirmed our concern — fiscal sustainability in Poland worsened significantly during the pandemic. The public finance framework will need careful, forward-looking policy responses to avoid long-term imbalances.

👉 Read the full article in the Central European Economic Journal:

https://sciendo.com/pl/article/10.2478/ceej-2022-0005

🔍 , U as in Utility MaximizationIn economics, Utility Maximization refers to the idea that individuals make choices to ...
02/06/2025

🔍 , U as in Utility Maximization
In economics, Utility Maximization refers to the idea that individuals make choices to achieve the greatest possible satisfaction given their available resources — like time, income, or information.
💡 It’s a core concept in consumer theory, where people are assumed to behave rationally, selecting goods or services that provide the highest "utility" based on their preferences.
But utility isn’t just about money. It can include comfort, status, ethical values, or even environmental impact. That’s why the concept is increasingly nuanced in modern research — especially as we examine behavior under uncertainty, cognitive bias, or social influence.
From digital platform usage to public policy design, understanding how people prioritize utility is key to analyzing real-world economic behavior.
📚 A classic idea — still evolving with today’s challenges.

Insights on the Phillips Curve: A Microeconomic Foundation from OLG Model 🚀The paper published in the Central European...
30/05/2025

Insights on the Phillips Curve: A Microeconomic Foundation from OLG Model 🚀

The paper published in the Central European Economic Journal Microeconomic Foundation for Phillips Curve with a Three-Period Overlapping Generations Model and Negative Real Balance Effect

by Tanaka Yasuhito

offers a fresh microeconomic perspective on the classic Phillips curve — the inverse relationship between inflation and unemployment.

Using a three-period overlapping generations (OLG) model that incorporates childhood, a pay-as-you-go pension system, and monopolistic competition, we demonstrate how the negative real balance effect drives this relationship. Simply put:

Changes in nominal wages affect prices,

Which influence consumers’ real balances (debts and savings),

Ultimately impacting unemployment rates.

The model shows that these dynamics stem from both consumers’ utility maximization and firms’ profit maximization, grounding the Phillips curve in solid microeconomic theory.

We also explore how fiscal policy financed by seigniorage shifts the Phillips curve, providing insights for policymakers.

Curious about the microfoundations behind inflation and unemployment? Check out the full study and let’s discuss its implications! https://sciendo.com/pl/article/10.2478/ceej-2021-0010

T as in... 🔎 Threshold EffectThe Threshold Effect describes how the relationship between variables changes once a key ...
26/05/2025

T as in... 🔎 Threshold Effect

The Threshold Effect describes how the relationship between variables changes once a key point—or threshold—is crossed. Instead of a steady, linear impact, effects can shift dramatically after reaching this tipping point.

For example:
Spending may increase slowly with income up to a level, then jump sharply.
Pollution costs might be minor until a regulatory limit is exceeded, forcing firms to adapt.
Financial risk-taking can shift when market volatility passes a certain level.
Economists use threshold models to identify these changes, helping policymakers and businesses target the moments when real change happens.
In short, the Threshold Effect reveals that sometimes change isn’t gradual—it’s sudden. Recognizing this helps improve decision-making and forecasting.
Have you seen threshold effects in your field? Share your experience!

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