Hrvatsko društvo ekonomista

ARTICLES ::: AUTHORS ::: ARTICLES SEARCH

October 2015. ::: Vol.66 No. 04

Branko Blažević

DEVELOPMENT OF CROATIA IN THE CONDITIONS OF INNER AND OUTER IMBALANCE Ostalo A diagnose of the Croatian economy (the last 7 years, 2008 – 2014) is focused on the inner imbalance, best represented by the recession (and not inflation), and outer imbalance which is best represented by a deficit in the current account balance of payments (and not surplus), which means that there is a general economic imbalance mirrored in unemployment and decreased (slow) growth of production and GDP. There is no stable inner balance with high outer imbalance: therefore all economic policy measures have to be directed to the problem of outer imbalance, which means stimulating export by all possible means and instruments (depreciation but not devaluation, reducing absorption, etc.), along with supporting the restructuring process with a number of measures that aim to increase competitiveness and maintain active market policies and prices by reducing absorption. In such an environment, tourism – which according to its economic definition is an important segment of final consumption as well as aggregate demand and expenditure – acts just as economics would dictate, which means it has a countercyclical and antirecessional effect. Numerous secondary sources are used, as well as various scientific methods such as abstraction, analysis, synthesis, induction, deduction, generalization, description, etc. The current economic policy has to be changed, or to be more specific, the monetary policy. A real depreciation of the domestic currency has to be coordinated and synchronized with the fiscal policy, i.e. reducing absorption, which when combined with depreciation and reduced absorption become an effective weapon for achieving inner and outer balance. Linking final expenditure and final production is the task of economic policy which has to create preconditions for the development of domestic production whose expenses have to be adjusted to the prices formed on the global market. This is the way to make use of the integrating development basis, tied to final production and final expenditure and to overcome a disconnected total consumption and domestic aggregate production. Inner and outer imbalance; Economic policy; Croatia; Neoliberal doctrine; Keynes; Crisis; Exchange rate; Absorption Puni tekst: pdf (319 KB), Hrvatski, Str. 404 - 426

DEVELOPMENT OF CROATIA IN THE CONDITIONS OF INNER AND OUTER IMBALANCE

Ostalo

A diagnose of the Croatian economy (the last 7 years, 2008 – 2014) is focused on the inner imbalance, best represented by the recession (and not inflation), and outer imbalance which is best represented by a deficit in the current account balance of payments (and not surplus), which means that there is a general economic imbalance mirrored in unemployment and decreased (slow) growth of production and GDP. There is no stable inner balance with high outer imbalance: therefore all economic policy measures have to be directed to the problem of outer imbalance, which means stimulating export by all possible means and instruments (depreciation but not devaluation, reducing absorption, etc.), along with supporting the restructuring process with a number of measures that aim to increase competitiveness and maintain active market policies and prices by reducing absorption. In such an environment, tourism – which according to its economic definition is an important segment of final consumption as well as aggregate demand and expenditure – acts just as economics would dictate, which means it has a countercyclical and antirecessional effect. Numerous secondary sources are used, as well as various scientific methods such as abstraction, analysis, synthesis, induction, deduction, generalization, description, etc. The current economic policy has to be changed, or to be more specific, the monetary policy. A real depreciation of the domestic currency has to be coordinated and synchronized with the fiscal policy, i.e. reducing absorption, which when combined with depreciation and reduced absorption become an effective weapon for achieving inner and outer balance. Linking final expenditure and final production is the task of economic policy which has to create preconditions for the development of domestic production whose expenses have to be adjusted to the prices formed on the global market. This is the way to make use of the integrating development basis, tied to final production and final expenditure and to overcome a disconnected total consumption and domestic aggregate production.

Inner and outer imbalance; Economic policy; Croatia; Neoliberal doctrine; Keynes; Crisis; Exchange rate; Absorption

Puni tekst: pdf (319 KB), Hrvatski, Str. 404 - 426