scholarly journals Macroeconomic stability as the condition for Bulgaria to join the euro area

Equilibrium ◽  
2019 ◽  
Vol 14 (2) ◽  
pp. 295-315
Author(s):  
Anna Moździerz
Keyword(s):  
Euro Area ◽  
Budget Deficit ◽  
Value Added ◽  
Economic Convergence ◽  
Convergence Criteria ◽  
Macroeconomic Imbalances ◽  
Macroeconomic Indicators ◽  
The Subject ◽  
Macroeconomic Stability

Research background: The subject of research is the macroeconomic situation of Bulgaria in the context of the country's preparations for joining the euro area. In 2018, the Bulgarian government approved a plan of preparations covering the period until the end of June 2019, which assumes that the country will join the ERM II mechanism in July 2019, and the euro area on 1 January 2022. Bulgaria meets four nominal convergence criteria regarding inflation, long-term interest rate, budget deficit and public debt. The national currency is pegged to the euro under the currency board arrangement. Despite this, the implementation of this optimistic scenario may be difficult because since the 2007 crisis, the European institutions pay more attention to macroeconomic stability and the sustainability of convergence. Purpose of the article: The aim of the article is to identify the factors destabilising macroeconomic equilibrium in Bulgaria, which are a potential obstacle to the adoption of the euro by Bulgaria on schedule. Methods: The research was based on the changes in selected macroeconomic indicators, as well as on the method used by the European Commission to detect macroeconomic imbalances. The observation and analysis covered the 2007–2018 period.  Findings & Value added: The research results indicate that the low level of socio-economic convergence of Bulgaria and macroeconomic imbalances may delay its membership in the monetary union. Therefore, while respecting the country's aspirations to join the euro area, one cannot ignore the risk of another destabilisation of the euro area. 

scholarly journals Effects of the Washington Consensus on the Macroeconomic Stability of Bosnia and Herzegovina

ECONOMICS ◽  
2016 ◽  
Vol 4 (2) ◽  
pp. 29-56
Author(s):  
Merim Kasumović ◽  
Dino Hadžialić
Keyword(s):  
Bosnia And Herzegovina ◽  
Washington Consensus ◽  
Specific Situation ◽  
Macroeconomic Indicators ◽  
Stabilization Policies ◽  
Fiscal Stabilization ◽  
The Stability ◽  
High Level ◽  
Macroeconomic Stability

Summary With regard to the specific situation and problems in Bosnia and Herzegovina this paper will analyse the effects caused by adhering to the rules of the Washington Consensus, and thus will determine to which extent they have influenced the stability of the macroeconomic indicators in Bosnia and Herzegovina and will explain how the rules affect the stability of macroeconomic indicators of Bosnia and Herzegovina. The main thesis of the Washington Consensus is that by following the measures of the same the macroeconomic situation in the country becomes more stabilised. However, stabilization often cannot sustain in the long term and this situation in the economy can be regarded as quasi-macroeconomic stability. The application of the Washington Consensus produces a quasi-macroeconomic stability of Bosnia and Herzegovina since the high level of unemployment exists due to a low inflation. Contrary to the neoliberal Washington Consensus profile, whose main goal is the maintenance of steady conditions in budgets through fiscal stabilization policies, the paper stresses the need to solve the permanent high unemployment rate as the main macroeconomic problem Bosnia and Herzegovina’s.

scholarly journals Assessing inflation in CR using artificial intelligence

2021 ◽  
Vol 129 ◽  
pp. 03034
Author(s):  
Marek Vochozka ◽  
Tomas Krulicky ◽  
Lenka Novotna
Keyword(s):  
Unemployment Rate ◽  
Inflation Rate ◽  
Value Added ◽  
The Czech Republic ◽  
Macroeconomic Indicators ◽  
Short Run ◽  
National Bank ◽  
The Relationship ◽  
Rate Development

Research background: Unemployment and inflation are among the basic macroeconomic indicators of the national economy. Both these phenomena are inextricably linked to market economy and have undisputable social and economic impacts on the population of the countries where these processes take place. The relationship between the inflation and unemployment can be expressed by means of Philips curve. Purpose: The objective of the research is to compile Philips’s curve for the years 2000-2021 and compare the resulting curve with the initial short-run Philips curve. Methods: The validity of the mutual relationship between unemployment and inflation is examined using the method of neural networks. The data on inflation and unemployment rate are available from the period of 31 January 2020 and 28 February 2021. The data on inflation were obtained from the database of the Czech Statistical Office; the data on unemployment, from the official websites of the Czech National Bank. Findings & Value added: During the period under review, unemployment rate and inflation fluctuated constantly. Currently, both variables have stabilized at around 3%. Compared the long-term trend, in the years 2008-2009, the inflation rate was higher than unemployment rate. The analysis performed shows that the actual Philips curve for the Czech Republic in the period under review does not copy the initial short-run Philips curve, which indicates that the prediction of inflation rate development cannot be based on the development of unemployment rate, and the development of inflation rate cannot be a basis for exact prediction of unemployment rate development.

scholarly journals Strategizing for sustainable development of transport systems in the safety dimension

2021 ◽  
Vol 915 (1) ◽  
pp. 012025
Author(s):  
Yu Kharazishvili ◽  
D Bugayko ◽  
V Lyashenko ◽  
V Sokolovskiy ◽  
V Baranov
Keyword(s):  
Sustainable Development ◽  
Value Added ◽  
Main Tool ◽  
Air Transport ◽  
Management Theory ◽  
Transport Systems ◽  
Macroeconomic Indicators ◽  
Scientific Substantiation ◽  
Safety Dimension

Abstract The article conducted a study on approaches to the strategy of sustainable development of transport systems on the example of air transport in Ukraine. The shortcomings of the main tool of their strategy, namely the methods of classical forecasting, which limit its application, are revealed. The methods of forecasting based on expert judgment and classical methods of forecasting containing congenital pathology of errors are considered. Therefore, long-term factors and trends are identified, which remains a classic forecast, rather than building long-term forecasts of the national economy. To implement the stage of strategic planning of transport systems used the concept of sustainable development, which includes stages of identification through integrated assessment in the measurement of safety and strategy by defining goals, building the desired trajectory and decomposition of integrated indices through adaptive control methods of management theory. Three scenarios for the development of air transport in Ukraine have been developed: realistic - 3.8%; optimistic -7.0% and balanced - increase in gross value added (GVA) by 11.7% with scientific substantiation of quantitative values of indicators and key macroeconomic indicators, which guarantees the desired trajectory of sustainable development, and monitoring their implementation determines the effectiveness of public policies and actions.

scholarly journals INNOVATION FOR GROWTH: EVIDENCE FROM CEE EUROZONE CANDIDATES

2020 ◽  
Vol 5 (Special) ◽  
pp. 124-134
Author(s):  
Otilia Georgiana Floroiu
Keyword(s):  
Economic Growth ◽  
Swot Analysis ◽  
Value Added ◽  
Clean Energy ◽  
Economic Convergence ◽  
Digital Innovation ◽  
Skilled Personnel ◽  
Development Levels ◽  
Performance Pattern

This paper analyzes the European innovation framework focusing on four Eurozone candidates: Romania, Poland, Hungary, and Czech Republic. In the last decades, almost two-thirds of Europe’s economic growth has been driven by innovation. This idea is supported by impressive scientific findings concerning the correlation between innovation and economic growth. We believe that better innovation performance stimulates economic convergence and in the long term, facilitates the candidates’ transition towards Euro currency adoption. The countries in the study demonstrate a low innovative performance pattern, as our SWOT analysis will show. First, the gross domestic expenditure on research and development levels are far below the Union average. Secondly, there is a lack of cooperation between the academic and business sector, leading to a decreasing number of skilled personnel in the innovation industries. Lastly, these countries are suffering from an incoherent strategy aimed at reducing the productivity gap between domestic and foreign-owned firms. In order for these CEE Eurozone candidates to improve their European Innovation Score and their competitiveness, we recommend increasing investments in R&D, infrastructure, education, healthcare, clean energy and shifting towards higher value-added activities. We are also suggesting supporting digital innovation hubs, the creation of new companies, and facilitating access to finance for small and medium-sized businesses.

scholarly journals The regional innovations governance: Slovakia with regard to convergence criteria

2021 ◽  
pp. 170-180
Author(s):  
Eniko Korcsmaros ◽  
Renata Machova ◽  
Zoltan Seben ◽  
Tibor Zsigmond
Keyword(s):  
Interest Rates ◽  
Euro Area ◽  
Pearson Correlation ◽  
Convergence Criteria ◽  
Single Currency ◽  
Innovation Development ◽  
The Public ◽  
Government Deficit ◽  
The Eu

The introduction of the euro in Europe is subject to several criteria. In 1979, the European Community created the «European Exchange Rate Mechanism» (ERM). On 16 April, 2003, Slovakia, together with nine other countries, signed the EU Accession Treaty in Athens. These countries promised to adopt the single currency (the euro). It has been 10 years since the introduction of the euro in Slovakia. It stands to highlight factors that have contributed to the economic, innovation development experienced in recent years regarding introducing a single currency. This article aims to briefly introduce the euro area and present each country's accession in historical order. the authors presented the general conditions for introducing the euro and then went on to the events related to the regional innovations governance of Slovakia. Using the data from the statistical site Eurostat, the Pearson correlation coefficient was used to indicate the closeness of relationships between the average values of inflation and government deficit and the average values of inflation and the public debt. The limitations of the research are that Eurostat's values are only indicative and, in the event of a possible accession, EU bodies would certainly use other, more reliable data. Furthermore, the ERM II criterion for joining the euro area cannot be examined due lack of statistics available on the Slovak koruna's value after the introduction. Another limitation is that the EU sometimes makes adjustments to calculating inflation and average nominal long-term interest rates. There is a lack of a significant relationship between the examined variables in the case of Slovakia. Based on the 2018 inflation rate, the introduction would not have been possible, as it was slightly higher (2.5 per cent) than the limit (2.23 per cent). Therefore, the authors assumed that Slovakia had adopted the euro on time, as if it had not done so on 1 January 2009, it would probably have had to wait a few years for the new opportunity. Although their results are only indicative and not decisive without taking ERM II into account, it is possible to do without specific indicators.

scholarly journals The Importance of the Sustainability of the Romanian Convergence Process to the Euro Zone

2018 ◽  
Vol 13 (3) ◽  
pp. 161-170
Author(s):  
Ioana Raluca Sbârcea
Keyword(s):  
European Union ◽  
Euro Area ◽  
The European Union ◽  
Convergence Criteria ◽  
Euro Zone ◽  
Euro Adoption ◽  
Real Convergence ◽  
Convergence Process ◽  
The Moment

Abstract Since 2007, Romania has been under the under the glance of experts in the European Union, but also under the strict monitoring of the NBR and also under the pressure of citizens and investors' expectations about the moment of euro adoption. My research concerns have also been channeled to this point of maximum interest, impact and timeliness, which is why I have proposed through this paper to highlight a synthetic situation regarding the fulfillment of the convergence criteria from the moment of accession to the European Union, to the present. The objective of this paper is to reflect, in dynamics and correlation, the degree of fulfillment of the nominal and real convergence criteria, the sustainability of the levels achieved for certain indicators, so necessary for joining the single currency, without shocks. Romania is a country subject to frequent fluctuations at all levels: economic, political, legislative, also reflected in the fluctuations in meeting the convergence criteria. The lack of medium and long-term sustainability of the criteria considered necessary for joining the euro area will make this desiderate ever more remote.

scholarly journals AN ANALYSIS OF THE FISCAL CONVERGENCE CRITERIA IN THE EUROPEAN UNION IN TERMS OF THE SUSTAINABILITY

2013 ◽  
Author(s):  
Iulia Andreea Bucur ◽  
Simona Elena Dragomirescu
Keyword(s):  
Fiscal Policy ◽  
Euro Area ◽  
Public Debt ◽  
Budget Deficit ◽  
The European Union ◽  
Convergence Criteria ◽  
Eu Member States ◽  
Fiscal Management ◽  
Fiscal Balance ◽  
The Eu

Although the convergence criteria in the Maastricht Treaty led to the creation of the EMU and the euro area has resisted more than some of its critics believed, in the context of major macroeconomic imbalances, the issue of nominal convergence has been the subject of numerous research. This paper aims to analyze the capacity of fiscal criteria to reflect the ability of EU Member States to achieve economic development for the integration in the EMU and to comply strict fiscal policy that governing its operation. In the context of certain technical deficiencies of fiscal criteria, we analyzed the developments of budget deficit and gross public debt in the EU during 2000 and 2012. The results show that until 2007 the EU economies were able, overall, to meet the budget deficit criteria, but due to the financial crisis and the prolonged slowdown in economic growth, the fiscal balance had an unfavorable evolution since 2008, while the evolution of the gross public debt has worsened increasingly. Due to this pressure situation on the sustainability of public finances, examining the adoption, application and enforcement of the fiscal policy rules expressed by the evolution of the Fiscal Rule Index for the period 2000-2011, the importance of rules in the fiscal management of the Union and especially of the euro area appears increasingly obvious.

scholarly journals Fiscal policy and oil factor: Evaluation of the effects in global economic development

2021 ◽  
Vol 92 ◽  
pp. 07023
Author(s):  
Tapdig Guluzada ◽  
Esmira Guluzada
Keyword(s):  
Fiscal Policy ◽  
Causal Relationship ◽  
Value Added ◽  
Oil Prices ◽  
Short Term ◽  
State Budget ◽  
Long Run ◽  
Percent Increase ◽  
Macroeconomic Indicators

Research background: Today, the acceptance of fiscal policy decisions necessitates the analysis of policy efficiency with the help of optimization issues, the study of cause-and-effect relationships between budget expenditures and macroeconomic indicators such as economic growth, revenues, and the evaluation of a number of econometric models among all. The need for these areas makes it important to study and analyze the effects of fiscal policy on the economy, which allows to justify the relevance of the topic of the article. Purpose of the article: The article is devoted to the assessment of the fiscal and economic consequences of changes in oil prices in the world market, as well as the study of the relationship between state budget revenues and government expenditure in Azerbaijan. It was revealed that a 1% increase in oil prices, in the long run, increased Azerbaijan’s GDP by 0.52% and state budget expenditures by 0.88%. The calculations allow to conclude that there is a high correlation between government spending and state budget revenues in Azerbaijan. The obtained result indicates a positive relationship between the aforementioned economic variables. Methods: The most common method of analyzing the possible causal relationship between macroeconomic indicators is the causality test proposed by Granger in 1969. However, from a methodological point of view, the application of this test to study the causal relationship between economic indicators requires these indicators to be stationary. This statistical feature can be violated in the case of the economic indicator having the single root elements. To do this, we tested the Unit root problem of the variable using the Augmented Dickey-Fuller test. Simultaneously, a number of other important features of the evaluated models were tested and the adequacy of the models was confirmed. Findings & Value added: As a result of the research, it was determined that there is a short-term and long-term causal relationship between world oil prices and Azerbaijan’s GDP and state budget expenditures. According to the results, a 1 percent increase in oil prices leads to the increase of the current level of GDP growth in Azerbaijan by 0.20 percent in the short term, and by 0.52 percent in the long term. Parallelly, it was revealed that a 1 percent increase in world oil prices leads to a 0.88 percent increase in Azerbaijan’s state budget expenditures in the long run. The correlation between Azerbaijan’s government expenditures and state budget revenues was analyzed, and a high correlation between these two macroeconomic indicators was identified.

Infrastructure mortgage in Russia: Opportunities and prospects

2019 ◽  
pp. 114-133
Author(s):  
G. I. Idrisov ◽  
Y. Yu. Ponomarev
Keyword(s):  
Federal Government ◽  
Public Debt ◽  
Budget Deficit ◽  
Expert Assessment ◽  
Inflation Expectations ◽  
Direct Impact ◽  
Long Run ◽  
Gdp Growth Rate ◽  
Negative Effect

The article shows that depending on the goals pursued by the federal government and the available interbudgetary tools a different design of infrastructure mortgage is preferable. Three variants of such mortgage in Russia are proposed, each of which is better suited for certain types of projects and uses different forms of subsidies. According to our expert assessment the active use of infrastructure mortgage in Russia can increase the average annual GDP growth rate by 0.5 p. p. on the horizon of 5—7 years. In the long run the growth of infrastructure financing through the use of infrastructure mortgage could increase long-term economic growth by 0.9 p. p., which in 20—30 years can add 20—30% of GDP to the economy. However, the change in the structure of budget expenditures in the absence of an increase in the budget deficit and public debt will cause no direct impact on monetary policy. The increase in the deficit and the build-up of public debt will have a negative effect on inflation expectations, which will require monetary tightening for a longer time to stabilize them.

Determinants of Inflation in Vietnam: A VECM Approach

2015 ◽  
Vol 22 (04) ◽  
pp. 26-50
Author(s):  
Ngoc Tran Thi Bich ◽  
Huong Pham Hoang Cam
Keyword(s):  
Interest Rate ◽  
Crude Oil ◽  
Error Correction ◽  
Budget Deficit ◽  
Oil Prices ◽  
Crude Oil Prices ◽  
Domestic Credit ◽  
Short Run ◽  
The Impact

This paper aims to examine the main determinants of inflation in Vietnam during the period from 2002Q1 to 2013Q2. The cointegration theory and the Vector Error Correction Model (VECM) approach are used to examine the impact of domestic credit, interest rate, budget deficit, and crude oil prices on inflation in both long and short terms. The results show that while there are long-term relations among inflation and the others, such factors as oil prices, domestic credit, and interest rate, in the short run, have no impact on fluctuations of inflation. Particularly, the budget deficit itself actually has a short-run impact, but its level is fundamentally weak. The cause of the current inflation is mainly due to public's expectations of the inflation in the last period. Although the error correction, from the long-run relationship, has affected inflation in the short run, the coefficient is small and insignificant. In other words, it means that the speed of the adjustment is very low or near zero. This also implies that once the relationship among inflation, domestic credit, interest rate, budget deficit, and crude oil prices deviate from the long-term trend, it will take the economy a lot of time to return to the equilibrium state.

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