Short- and medium-term fiscal positions in a high-inflation environment: the case of Croatia

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Frane Banić*

Dominik Ivan Pripužić*

Pave Rebić*

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https://doi.org/10.3326/pse.47.4.4

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Table 2
Baseline and sub-period model results with breakpoints (BP)

	OLS	OLS – BP	OLS – BP	OLS – BP	OLS – BP
	Q3:2002 – Q4:2022	Q3:2002 – Q3:2018	Q4:2018 – Q2:2021	Q3:2021 – Q3:2023	Q4:2023 – Q4:2025
Constant	–3.843***	–2.148**	3.925	4.588	–92.864*
Constant	(0.000)	(0.045)	(0.135)	(0.110)	(0.060)
Inflation rate	–0.901	–0.218*	–1.946***	0.241***	–1.562***
Inflation rate	(0.142)	(0.098)	(0.000)	(0.000)	(0.000)
Output gap (prod. fn.)	0.626***	0.524***	0.985***	1.699***	–2.686
Output gap (prod. fn.)	(0.000)	(0.001)	(0.000)	(0.000)	(0.426)
Lagged primary balance/GDP ratio	0.305**	0.516***	–0.189***	–0.650***	–0.279
Lagged primary balance/GDP ratio	(0.020)	(0.000)	(0.001)	(0.001)	(0.573)
Lagged general gvt debt/GDP ratio	0.050***	0.032**	–0.034	–0.122**	1.631**
Lagged general gvt debt/GDP ratio	(0.000)	(0.023)	(0.337)	(0.012)	(0.046)
R2	0.732	0.818	0.818	0.818	0.818

Note: The results of the Breusch-Godfrey test indicate that there is no autocorrelation in the models.

The results of the Breusch-Pagan-Godfrey test indicate that there is no heteroskedasticity in the models with the usual level of significance.

*, **, *** indicates statistical significance at 10%, 5% and 1%, respectively.

Source: Authors' calculations.

Table 3
Robustness check: HP filter instead of production function estimate of output gap

	OLS	OLS – BP	OLS – BP	OLS – BP	OLS – BP
	Q3:2002 – Q4:2022	Q3:2002 – Q3:2018	Q4:2018 – Q2:2021	Q3:2021 – Q3:2023	Q4:2023 – Q4:2025
Constant	-4.071***	-1.926*	0.516	-4.493***	-69.026***
Constant	(0.000)	(0.069)	(0.904)	(0.000)	(0.000)
Inflation rate	-0.049	-0.187	-2.062***	0.216***	-1.374***
Inflation rate	(0.384)	(0.172)	(0.000)	(0.000)	(0.000)
Output gap (HP filter)	0.569***	0.411**	0.981***	0.814***	-1.369***
Output gap (HP filter)	(0.000)	(0.012)	(0.000)	(0.000)	(0.006)
Lagged primary balance/GDP ratio	0.317*	0.575***	-0.227**	-0.219***	-0.004
Lagged primary balance/GDP ratio	(0.054)	(0.000)	(0.031)	(0.005)	(0.979)
Lagged general gvt debt/GDP ratio	0.053***	0.028**	0.014	0.031***	1.233**
Lagged general gvt debt/GDP ratio	(0.000)	(0.046)	(0.822)	(0.001)	(0.000)
R2	0.707	0.806	0.806	0.806	0.806

Note: The results of the Breusch-Godfrey test indicate that there is no autocorrelation in the models.

The results of the Breusch-Pagan-Godfrey test indicate that there is no heteroskedasticity in the models with the usual level of significance.

*, **, *** indicates statistical significance at 10%, 5% and 1%, respectively.

Source: Authors' calculations.

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