Forecasting Future Salaries in the Czech Republic Using Stochastic Modelling

• Authors: Ondřej Šimpach , Jitka Langhamrová
• Languages of publication: EN

Abstracts

EN

Background: In spite of the course of the economic crisis of 2008, there have not been changes dramatic to the extent that they would strongly alter the behaviour of the trend in the Average Gross Monthly Wages and the Monthly Wage Medians in the Czech Republic. In order to support public and monetary planning, reliable forecasts of future salaries are indispensable. Objectives: The aim is to provide an outline of the behaviour of the average gross wages and the gross wage medians of the Czech business sphere up to the end of 2018 using an optimised random walk model and an optimised ARIMA Model with a constant. Methods: Consumer price indices were used in the confrontation of the behaviour of the Average Gross Monthly Wages and the Monthly Wage Medians with the behaviour of inflation in the Czech Republic. The Box-Jenkins methodology is used for the time series modelling. Results: The Czech Average Gross Monthly Wages and the Monthly Wage Medians in the business sector will continue to grow more rapidly than the Czech inflation growth, expressed by consumer price indices. Conclusions: It is possible to expect that the rising trend of the Average Gross Monthly Wages and the Gross Wage Medians will be more rapid than the growth of inflation.

Keywords

EN

Random walk; ARIMA; Average Gross Monthly Wage; Monthly Wage Medians; Consumer Price Index; stochastic trend

• Publisher: Sciendo
• Journal: Business Systems Research Journal
• Year: 2013
• Volume: 4
• Issue: 2
• Pages: 4-125

Dates

published

2013-12-01

online

2014-01-22

Contributors

author

Ondřej Šimpach

• Faculty of Informatics and Statistics, University of Economics in Prague, Czech Republic

author

Jitka Langhamrová

• Faculty of Informatics and Statistics, University of Economics in Prague, Czech Republic

References

• 1. Bhattacharya, P.S., Thomakos, D.D. (2008), “Forecasting industry-level CPI and PPI inflation: Does exchange rate pass-through matter?” International Journal of Forecasting, Vol. 24, No. 1, pp. 134-150.[WoS][Crossref]
• 2. Box, G.E.P., Jenkins, G. (1970), Time series analysis: Forecasting and control, San Francisco, Holden-Day.
• 3. Bucevska, V. (2012), “An Empirical Evaluation of GARCH Models in Value-at-Risk Estimation: Evidence from the Macedonian Stock Exchange”, Business Systems Research, Vol. 4, No.1, pp. 49-64.
• 4. Engle, R.F. (1995), ARCH: selected readings, Oxford: Oxford University Press.
• 5. Evans, G.W., Honkapohja, S. (2001), Learning and Expectations in Macroeconomics.Princeton: Princeton University Press.
• 6. Even, W.E., MacPherson, D.A. (1996), “Consequences of minimum wage indexing”, Contemporary Economic Policy, Vol.14, No.4, pp.67-77.[Crossref]
• 7. Hanes, Ch. (2010), “The rise and fall of the sliding scale, or why wages are no longer indexed to product prices”, Explorations in Economic History, Vol.47, No.1, pp. 49-67.[WoS][Crossref]
• 8. Hommes, C., Lux, T. (2013), “Individual expectations and aggregate behavior in learning to forecast experiments”, Macroeconomic Dynamics, Vol.17, No.2, pp. 373-401.[WoS][Crossref]
• 9. Ivanov, O., Vaseashta, A. (2013), “A method for fast and contactless control of raw materials”, Ceramics International, Vol. 39, No. 3, pp. 2903-2907.[WoS][Crossref]
• 10. Janáček, K., Komárková, Z., Hlaváček, M., Komárek, L. (2012),“Impacts Of The Sovereign Default Crisis On The Czech Financial Sector” Czech National Bank: Financial Stability Report, pp. 118-128.
• 11. Jarque, C.M., Bera, A.K. (1980), „Efficient tests for normality, homoscedasticity and serial independence of regression residuals“, Economics Letters, Vol. 6, No. 3, pp. 255-259.[Crossref]
• 12. Jeřábková, V., Zelený, M. (2011), „Czech Labour Market Development in the Period of the Recent Economic Downturn - A Combined View from the Employment and Wage Statistics“, in Zdrój, L. (Ed) (2011), AMSE - Applications of Matematics and Statistics in Economy. Wroclaw: Uniwersytet Ekonomiczny.
• 13. Langhamrová, J., Šimpach, O. (2012), „The Income Inequality of Business and Nonbusiness Sphere in the Czech Republic“, In: Nerovnosť a chudoba v Európskej únii a na Slovensku. Košice : Ekonomická fakulta TU, pp. 113-122. Text in Czech.
• 14. Montiel, P., Servén, L. (2006), “Macroeconomic Stability in Developing Countries: How Much Is Enough?”, World Bank Research Observer, Vol. 21, No. 2, pp. 151-178.[Crossref]
• 15. Okafor, L. E., Tyrowicz, J. (2010), “Saving less when there is more foreign lending? Foreign debt and savings in developing countries”, Journal of Economic Policy Reform, Vol. 13, No. 3, pp.213-223.[Crossref]
• 16. Pejić-Bach, M. (2003),“Surviving in an environment of financial indiscipline: a case study from a transition country.” System Dynamics Review, Vol. 19, No. 1, pp. 47-74.[Crossref]
• 17. Plašil, M., Kubicová, I. (2012), “Contingent Claims Analysis And The Inter-Sector Transmission Of Credit Risk.” Czech National Bank: Financial Stability Report, pp. 129-139.
• 18. Shepherd, B. (2012), “When are adaptive expectations rational? A generalization”, Economics Letters, Vol. 115, No. 1, pp. 4-6.[WoS]
• 19. Smrčka, L., Arltová, M. (2012), “Increasing Threat of a „Total Financial Crisis” in the Upcoming Years.” International Journal of Mathematical Models and Methods in Applied Sciences, Vol. 6, No. 1, pp. 782-790.
• 20. Šimpach, O, Langhamrová, J. (2012), „The Expected trends in the Development of Employment. The Prediction of Employed Persons in Selected Non-manufacturing Sectors“. Fórum sociální politiky, Vol. 6, No. 4, pp. 11-17.
• 21. van den Berg, R., Ma, W.J. (2012), “Robust averaging during perceptual judgment is not optimal”, Proceedings of the National Academy of Sciences of the United States of America, Vol. 109, No. 13, pp. 13341-13346.[WoS]
• 22. Zelený, M. (2001), „A view of income poverty in the CR, using EU methodology“. Statistika, Vol. 38, No. 11, pp. 458-467.

Identifiers

DOI

10.2478/bsrj-2013-0009