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ECONOMICS OF TRANSITION

ECONOMICS OF TRANSITION. Pravna fakulteta Univerze v Ljubljani Erasmus 2013 Jože Mencinger, Franjo Štiblar. CONTENTS. Part 1 (Mencinger) ECONOMIC CONCEPTS AND THEORY - ECONOMIC CONCEPTS AND SOME CONTEMPORARY ISSUES - GDP STRUCTURES AND MEASURES OF ECONOMIC ACTIVITY

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ECONOMICS OF TRANSITION

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  1. ECONOMICS OF TRANSITION Pravna fakulteta Univerze v Ljubljani Erasmus2013 Jože Mencinger, Franjo Štiblar

  2. CONTENTS Part 1 (Mencinger) ECONOMIC CONCEPTS AND THEORY - ECONOMIC CONCEPTS AND SOME CONTEMPORARY ISSUES - GDP STRUCTURES AND MEASURES OF ECONOMIC ACTIVITY - AGGREGATE EXPENDITURE AND GDP DETERMINATION - AGGREGATE SUPPLY, ECONOMIC GROWTH, INFLATION, AND UNEMPLOYMENT - BASICS OF MONETARY ECONOMICS - ECONOMIC POLICIES - TRANSITION IN THEORY Part 2 (Štiblar) TRANSITION IN SEE EXAM: written exam: 4 questions If somebody wants. a paper can be added . A short description of the major characteristics of one of the main transition features (privatization. macroeconomic stabilization. institutional changes) in a country of SEE - up to 10 pages It should include basic tools and outcomes

  3. LITERATURE - Bohle, D. , Greskovits, B. Neoliberalism, embeddedneoliberalism, andneocorporativismWest EuropeanPolitics, 2007; (provided on home pages) • Štiblar. F: TheImpactoftheGlobalCrisis on MontenegroandtheWesternBalkans. Central Bank ofMontenegro. 2009;(provided ) • Mencinger. J: Privatization in Slovenia , SlovenianLawReview. 2006. vol 3. no 1/2. pp 65-81; (provided on home pages) • Mencinger. J :Transition to a national and a marketeconomy : agradualistapproachin Mrak. M Rojec. M Silva-Jáuregui. C Slovenia : fromYugoslavia to theEuropean Union Washington: The World Bank. 2004. 67-82 (provided on home pages) • Lectures: PP presentations (provided on home page)

  4. SLOVENIA Surface: 20.273 sqkm, 66% forests,Population: 2,02 millions, Language:Slovenian; (Italian, Hungarianminorities) PoliticalArrangement:parliamentarydemocracy, coalitiongovernments; “left” or “right” History:until 1918 part ofAustro-Hungarianempire; 1919-1941 part ofKingdomofYugoslavia; 1941-1945 occupiedbyGermany, ItalyandHungary; 1945-1991 Yugoslavrepublic; 1990 - politicaltransition: 1991 independence, May 2004: EU memberstate, January 1, 2007 EMU member; Economy: GDP 34 billions €, GDP/capita 17.000 €, 88% of EU27 average, - GDP growth: 4%(2008)-7.6%(2009), 1.5%(2011), -1.0 (2012) - unemploymentrate: 4.4%, 60000 (2008),6.9% 116000 8.3% (March 2011); - inflation 5.7 %(2008)1%(2009), 2.3%(Feb.2012) - publicbalance/GDP: 0.4%(2008),-5,5%(2011) - CA/GDP: -4.5%(2008)-0.6%(2011)

  5. ECONOMIC DEVELOPMENT OF SLOVENIA

  6. GAMBLING AND THE END OF THE SLOVENIAN “SUCCESS STORY”

  7. PERFORMANCE INDICATORS • ECONOMIC WELFARE AND ECONOMIC GROWTH • CAPACITY UTILIZATION AND UNEMPLOYMENT • STABILITY AND INFLATION • EQUILIBRIUM: EXTERNAL AND INTERNAL • INCOME AND WEALTH DISTRIBUTION • OTHER CRITERIA • VALUE JUDGEMENTS

  8. FINAFINANCIAL CAPITALISMNCIAL CAPITALISM investiments Financialproducts Savers acquisitions speculations Financial investors privatizations

  9. THE ROOTS OF THE CRISIS 1 (JHuffschmid)

  10. THE ROOTS OF THE CRISIS 2 (J Huffschmid)

  11. THE ROOTS OF THE CRISIS 3 -AGGREGATE DEMAND

  12. FINANCE DRIVEN CAPITALISM (JHuffschmid)

  13. CRISIS AND EU COMMISSION Documents on the failure of strategies by EU Commission: - evaluation of Lisbonstrategies: structural reforms increasing robustness of EU; - evaluation of the crisis: drop of industrial production. unemployment: 23 millions or 10% of active population; budget deficit 7%; public debt 80% GDP. 20 lost years in fiscal consolidation; - causes: low investments in R&D. structural problems. population ageing. business climate; Reality: - failed ilussions: of creation of knowledge based society and of ability to compete in a globalized world with ruthless societies. economic cannibalism. - destruction of European industry: growth of financial sector 6 times faster than growth ofthe“real” economy; - economy dominated by finance – finance dominated by speculations; profit making without value and job creation; -ideology:dogmatic liberalism. accent on the supply side. neglect of the demand side;

  14. THE CAUSES OF PROBLEMS IN NMS AND FMS External vulnerabilityof NMS and FMS has been enhanced (1) by small size of the countries. (2) transition based on Washington consensus. (3) FDI addiction. and (4) too rapid convergence of standard of living enabled by foreign savings; The global credit reduction is hitting NMS and FMS with large external financing needs particularly hard; Continued exposure of parent banks is critical for NMS and FMS development to weather the storm; The recession in EU hitS NMS and FMS most through increased competition and resulting decrease of export demand

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