Lessons from world economic crises: cleaning, remodeling and harmonizing the economy

Nenovski, Tome (2012): Lessons from world economic crises: cleaning, remodeling and harmonizing the economy. Published in: Publishing Complex (2012): pp. 137-149.

Abstract

Every bigger economic crisis, as the current one, leaves behind a huge material damage to the world economy, and to separate national economies as well. However, every such crises reminds national authorities of the mistakes done in the past while creating and running macroeconomic policy and teaches them how they should overcome them in the upcoming period. That is the positive part of the crises: it should be understood as a good teacher who gives lessons based on which an ambient for a lasting and sustainable growth in future should be created. From the current economic crises we’ve learned that it worked as a purgatory: the weak and fragile companies fell down; the more resistant ones took the chance and became even stronger; new companies emerged which create optimism and faith in an upcoming sustainable course towards the expansive path of the economic cycle. The crisis reshapes the world economic map. Market forces are not in the same geographical borders as before. Spheres of interest are not the same as before. Competition on world markets gets new forms and players. The authorities of most of the countries became aware that they should remodel the domestic economy, if they wanted a better position in the incoming distribution of world markets. Finally, the crisis showed that a stabile economic growth may not be expected in future, either locally or globally, without appropriate harmonization of the basic instruments of macroeconomic policy: fiscal policy, monetary policy and foreign trade policy. Has Republic of Macedonia learned those lessons? How can its economy shift into a lasting and sustainable economic growth in the upcoming period? The simple and, at the same time, very complex answer would be: by remodeling its economy!

• Item Type: MPRA Paper
• Language: English
• Keywords: crisis; lessons; growth; remodeling; harmonization.
• Subjects: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

References

1. Anastasakis, O, Watson, M., (2011). “Reform challenges and growth prospects in South East Europe”, South East European Studies at Oxford: From Crisis to Recovery - Sustainable Growth in South East Europe, European Studies Centre, St. Antony’s College, University of Oxford, OX2 6JF,SEESOX January 2011;

2. Association of Macedonian Chambers of Commerce, Strategy for economic growth through the development of SME’s, Skopje, 2011;

3. Bastian, J., “Assisting South East Europe through external anchors”. South East European Studies at Oxford: From Crisis to Recovery - Sustainable Growth in South East Europe, European Studies Centre, St. Antony’s College, University of Oxford, OX2 6JF, SEESOX January 2011;

4. Cordoba, F., G., Kehoe J., T., The Current Financial Crisis: What Should We Learn from the Great Depressions of the Twentieth Century?”, Federal reserve Bank of Minneapolis, Research Department Staff Report 421, March 2009;

5. EBRD, (2010), “EBRD Transition Report 2010: Recovery and Reform”, EBRD paper;

6. European Commission (2010), “The pre-accession economies in the global crisis: From exogenous to endogenous growth?” Occasional Papers, European Commission Directorate for economic and financial affairs;

7. IMF ( 2011), “World Economic Outlook”, April 2011, Washington DC, IMF;

8. Kaoudis, G., Metaxas, V., Stavrianou, N, Tsoudis, D., Vouldis, A., “Financial market aspects of the crisis in South East Europe”. South East European Studies at Oxford: From Crisis to Recovery - Sustainable Growth in South East Europe, European Studies Centre, St. Antony’s College, University of Oxford, OX26JF, SEESOX January 2011;

9. Llaudes, R, Salman, F., Chivakul, M., (October 2010). The Impact of the Great Recession on Emerging Markets, IMF Working Paper WP/10/237;

10. Mrak, M., New growth model for the region after the crisis?, National Bank of the Republic of Macedonia, 26 April.2011, www.nbrm.mk;

11. Nenovski, T., Macedonia and the World Economic crisis, Nampres, Skopje, 2010;

12. Nenovski, T., Macroeconomics, second edition, University American College Skopje, Skopje, 2010;

13. Nenovski, T., “Macedonian economy – Advantages, Limitations and Prospects”, International Conference:“Balkans in Europe: Economic integration, Challenges and Solutions”,Institute for Advanced Studies,Orleans, France, 3-4 February 2011;

14. Nenovski, T., “Macedonia and the World economic crises: Effects and prospects”, Second international scientific conference: “International dialog: East and West” (Culture, Slavic, and economy), International Slavic Institute, St. Nikole, Republic of Macedonia, March 17-18, 2011;

15. Nenovski, T., Smilkovski, I., Poposki, K., “Remodeling of the Macedonian Economy”. International conference: “The Economies of Balkan and Eastern Europe Countries in the changed world”, University of Pitesti, Romania, May 5-8, 2011;

16. Sanfey, P., (2011). “South East Europe: lessons from the global economic crisis”. South East European Studies at Oxford: From Crisis to Recovery - Sustainable Growth in South East Europe, European Studies Centre, St. Antony’s College, University of Oxford, OX2 6JF, SEESOX January 2011;

17. Schadler, S. (2011). “Rethinking the South East European convergence model”. South East European Studies at Oxford: From Crisis to Recovery - Sustainable Growth in South East Europe, European Studies Centre, St. Antony’s College, University of Oxford, OX2 6JF, SEESOX January 2011;

18. Winkler, A. (2009). “Southeastern Europe: Financial Deepening, Foreign Banks and Sudden Stops in Capital Flows”, published by South East European Studies at Oxford.