Regimes in Economic Growth in Balkan Countries

Trajkova Najdovska, Natasha (2022) Regimes in Economic Growth in Balkan Countries. XVIII. International Balkan and Near Eastern Congress Series on Economics, Business and Management.

Text Regime Switching in Balkan Countries-final_Ibaness_Ohrid 2022.docx Download (78kB)

Abstract

The most usual concept of economic growth starts with the assumption of linear trend in the data series, mainly based on the “Solow” model growth pattern, characterized by linear trend in the data series. However, when big shocks happen such as pandemic, war or conflict, they seriously impact the growth patterns in the countries, causing big “tectonic” changes in growth processes in the countries. The impact is actually result of the tectonic movements in the main growth determinants such as physical capital, human capital or total factor productivity. This impact and its effects has been especially relevant in the case of Balkan countries, where dissolution of the former state, but also the consequent changers caused shifts in growth patterns. In this paper they are defined as growth regimes with specific changes in determinants for each regime. The main goal of this paper is to examine the determinants of GDP growth rate that diverts the growth pattern from some linear trend in the case of selected Balkan Countries. They are good example to test for regime switches in growth pattens due to the big shocks and adjustment happening in the course of last three decades such as dissolution of former state, structural changes in transition, wars, conflicts, Global Financial Crisis, Covid-pandemic. The results from Markov Switching VAR model suggest that the real economic activity experience regime shifts, characterised with specific determinants movements within the regime. Hence, the conclusion is that the possible nonlinear notion of economic growth should be further explored especially in the case of countries where big shocks cause big shifts in growth patterns.

Item Type:	Article
Subjects:	Scientific Fields (Frascati) > Social Sciences > Economics and Business
Divisions:	Faculty of Economics
Depositing User:	Prof. d-r Natasha Trajkova
Date Deposited:	09 Jan 2023 09:03
Last Modified:	09 Jan 2023 09:03
URI:	https://eprints.uklo.edu.mk/id/eprint/7596

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