https://www.um.edu.mt/library/oar/handle/123456789/4652 Sun, 19 Apr 2026 13:21:23 GMT 2026-04-19T13:21:23Z https://www.um.edu.mt/library/oar/handle/123456789/75570 Title: Assessing economic vulnerability and resilience in a DSGE framework Abstract: The analysis of vulnerable economies is established in the literature and it has been shown that small states especially are inherently vulnerable given their smallness and openness. Despite this, a number of success stories have been documented, proving that with the implementation of the right policies, these small states can develop an ability to withstand or recover from the negative effects of economic shocks. This work aims to capture the concepts of economic vulnerability and resilience in a framework which nowadays is considered to lie at the forefront of macroeconomic modelling. A Dynamic Stochastic General Equilibrium (DSGE) model of a small, open economy is used to assess the implications of vulnerability, and the effects of different policies that counter such vulnerability, in order to understand the dynamics behind the adjustment processes in small states. It is shown that a relatively simple model is able to replicate the dynamics implied by the data for the Maltese economy to a reasonable degree and the results indicate a preference towards one type of government policy over another. In line with other studies, it is argued that such a policy can only be afforded if the economy is willing to save and thus accumulate resources that it can utilise in times of distress. Description: M.A.ECONOMICS Sat, 01 Jan 2011 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/75570 2011-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/75491 Title: The effect of fiscal drag on the Maltese economy : analysing the Maltese tax burden through tax wedge indicators Abstract: This exercise computed tax wedge indicators for the Maltese tax system on employed labour, using the methodology as developed by the OECD. Between 2000 and 2009 the average tax burden for most households declined, as a result of reforms undertaken to the income tax and family benefits systems throughout this period. The largest declines were experienced by family types with earnings around the average wage value or higher. Taxpayers with lower income levels benefited less from the reduction in the tax burden on employed labour due to the presence of strong nominal and real fiscal drag effects. Description: M.A.ECONOMICS Sat, 01 Jan 2011 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/75491 2011-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/72896 Title: The setting of an optimum base rate : building a theoretical rate Abstract: With effect from 15 October 2008, the Governing Council of the European Central Bank (ECB) decided to lower its minimum bid rate by 50 basis points from 4.25% to 3.75%, in view of the then prevailing market conditions. A series of rate cuts in the minimum bid rate of the ECB followed this first decision, such that the minimum bid rate was reduced by 325 basis points to 1.00% in one and a half years. Initially domestic banks were implementing Governing Council decisions as soon as they occurred. However, following the rate cut taking effect on 11 March 2009, none of the domestic banks then operating in the Maltese Islands adopted this measure and no cuts were made to bank base rates. Such a decision was quite extraordinary for the local market since past movements in the base rate of domestic banks had always indicated that base rate modelling was mostly calculated on the ECB minimum bid rate. This study questions base rate modelling for domestic banks as it tries to identify the factors that influence base rate setting. Research was carried out on the type of market in which domestic banks operate. Both the data obtained from annual reports and financial statements, as well as figures for the number of licensed credit institutions (provided by the Malta Financial Services Authority), indicated that banks operating in the Maltese Islands were competing under an oligopolistic market structure. This dissertation also evaluated a historical analysis of the base rates set by four commercial banks; namely APS Bank Limited, Banif Bank (Malta) plc, Bank of Valletta plc, and HSBC Bank (Malta) plc. Deep analysis of the base rates discovered that the four banks under study have always competed in an oligopolistic market structure. In the past, three of the four banks under study modelled their base rate on variables related to liquidity. Today, banks operating in the Maltese market model their base rate as an average of liquidity variables (including the minimum bid rate, the gross domestic product, and the inflation rate), loan maturity, and the various risks that they face. Description: M.A.ECONOMICS Sat, 01 Jan 2011 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/72896 2011-01-01T00:00:00Z https://www.um.edu.mt/library/oar/handle/123456789/4143 Title: The persistence of prices in Malta Abstract: This study investigates underlying trends in prices in Malta, linking the notion of price persistence with the search for a stable core inflation measure. This investigation is couched in terms of the European Central Bank's target of price stability. A trimmed mean index, rooted in cross-sectional data analysis, is derived from Maltese harmonised indices of consumer prices. The trimmed mean series is shown to be less volatile than official price indices. Inflation in Malta appears to be susceptible to international volatility, particularly energy and food components. On the other hand, the prices of certain locally provided services tend to be more persistent. The volatility in Maltese inflation rates is higher than other Euro Area member countries, betraying specific shock-response weaknesses in the Maltese economy. Local inflation rates register higher amplitudes, with shocks having a longer duration than in comparable Euro Area countries. While the European Central Bank uses harmonised indices of consumer prices for policy decisions, other unconventional estimators of underlying inflation can identify specific pressures experienced by an economy. Further analysis of these forces reveals the components most prone to volatility; a well designed measure of underlying prices identifies categories that exhibit persistence in prices. The benefits of using these measures to identify and understand these forces in an economy ought to be further reviewed by monetary authorities. Description: B.COM.(HONS)ECON.&FIN. Sat, 01 Jan 2011 00:00:00 GMT https://www.um.edu.mt/library/oar/handle/123456789/4143 2011-01-01T00:00:00Z