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This paper presents a comprehensive and non‐standard labour market analysis based on univariate and multivariate models for wages. The novelty of this paper lies in the use of non‐normalized cointegrating vectors for labour market analysis. Wages are the basis of labour market models, as well as the key factor for employees and employers; therefore, the central analytical axis is a classical wage bargaining process, where one side requires and the other side proposes a certain level of wages. Analysis is divided into two parts: foremost, a careful analysis of Lithuanian wages is conducted and a univariate model for the investigation of interactions between the minimum wage and the rest of the wages is proposed; only after the minimum wage model is drafted can the multivarate model for the whole economy be built up. Briefly, the methodology used in this article can be annotated as a synthesis of sequential theoretical and empirical considerations that combine the results of theoretical macroeconomics with data‐generating patterns and stylized facts. The model is considered as the final one only if macro‐theory preconditions, statistical prerequisites, and stylized real‐world requirements are met and fulfilled. In addition, this article gives an example and a quantitatively, as well as qualitatively, motivated suggestion as to how to incorporate minimum wages into econometric models and puts forward an explanation for why it is necessary to include minimum wage dynamics into labour market analysis. The article is nothing but an empirical case study that demonstrates how many minor details have to be taken into account until a realistic labour market model is built up. Although the paper deals with the labour market, the suitable application of time series methods is the main subject of the analysis.

This paper continues the analysis of the second pillar pension funds and is based on the results that were published in June 2013 in the journal “Organizations and Markets in Emerging Economies”, under the title “On Future Pensions from the Second Pillar Pension Funds”. The results of the previously published study that one needs to keep in mind for the full perception of the material are also presented here. The main result of this paper is interpretation and exhaustive quantitative analysis of cointegrating relationship among social insurance contributions transferred into the second pillar pension funds and assets value of these funds. More specifically, this paper explains what is represented by the equilibrium error and submits a mathematical model under rational expectations with detailed comments.

Algirdas BARTKUS -socialinių mokslų daktaras, Vilniaus universiteto Ekonomikos fakulteto Kiekybinių metodų ir modeliavimo katedros lektorius. Adresas: Saulėtekio al. 9 (II r.), LT- The paper analyzes the impacts of an increase in retirement age and second pillar pension funds on the financial stability of public pensions system.

This paper investigates the possibility to obtain better GDP forecasts in the early stages of Great Recession. Here, predictive performance refers to exclusively out-of-sample forecasts. Based on exploratory data analysis and general-to-specific modelling, this paper proposes a univariate predictive threshold model for the small open economy that outperforms its linear counterparts and correctly determines the course of events. This model does not explain any causal links; however, based on a set of economic arguments, it sets forward an idea regarding how a forecaster can act when principal determinant factors, responsible for a sudden, yet lasting change, are unknown, unmeasurable or cannot be influenced by national policy makers. A major dissimilarity between usual threshold models and the model presented in this paper is that while variables act differently under different conditions in the former, in this model, due to economic reasons, errors act differently. Alternatively, this paper can be viewed as a comparative GDP prediction study.