Political economy literature acknowledges the importance of democratic learning and of fiscal rules in preventing politically driven deficits. This paper investigates the role of these factors for the Political Budget Cycles in the ten Central and East European (CEE) countries from 1990 to 2010....

A new method is introduced for panel-data models. Asymptotic robustness is used for a multivariate model with latent variables for a family of estimators. It is shown numerically that in comparison to standard methods we obtain: 1) better predictions in out-of-sample occasions; 2) smaller...

This paper proposes a new instrumental variables approach for consistent and asymptotically efficient estimation of panel data models with weakly exogenous or endogenous regressors and residuals generated by a multi-factor error structure. In this case, the standard dynamic panel estimators fail...

Financial development has a major role in the sustainable economic growth of Central and Eastern European emerging countries, particularly after their political and structural changes. These changes required a reform of financial sectors of these countries, such as capital market development,...