| Abstract [eng] |
The dissertation‘s main objective is to analyse Lithuanian business cycle and to answer the question about the main drivers of the business cycle in Lithuania. For that purpose two quantitative models of partial and general equilibrium are constructed. The models explore structural shock effects on Lithuanian output, consumption, investment, trade-balance-to-output ratio, labour supply and labour productivity over the period 1995-2011. Model results are compared to the findings of other small open emerging economies. The results of augmented real business cycle model for Lithuania show that non-stationary productivity shocks to trend is the main source of variation in output; investment is mostly driven by country premium shocks while the dynamics of consumption and trade-balance-to-output ratio is mostly affected by stochastic preference shocks in the long term and domestic spending shocks in the short run. Due to the estimated low persistence of domestic spending shocks, it has a limited impact on macroeconomic aggregates in the long term. Structural vector autoregression model reveals that technology shocks do not have strong negative impact on labour supply in the country contrary to patterns explored in the developed countries. |
