The aim of this paper is to examine the relation between the current account balance and its determinants for a sample of 9 SEE countries (Bulgaria, Croatia, Romania, Moldova, Serbia, Bosnia and Herzegovina, Macedonia, Montenegro, and Albania)
This paper examines the impact of structural and cyclical factors on Serbia's current account. We have applied several filters to turn off the long-term (structural) component and isolate the influence of cyclical factors. In this paper, we show that structural factors were more important determinants of the current account deficit in the full-time sample (1997-2016), while cyclical factors showed a stronger impact in the post-crisis period when the deficit was reduced. Although they lost their intensity during the crisis and in the post-crisis period, the structural factors determine the trend of the current account balance in the long-term. For further improvement of the current account, measures to increase exports should be taken. The structural changes of production, the wider range of support for export financing to small and medium-sized enterprises, and the application of advanced technologies in manufacturing could help to reduce the trade deficit, making the current account deficit sustainable.
The empirical literature on the growth impact of foreign direct investment (FDI) suggests a strong positive relationship between the two. Yet, the lack of evidence of a clear causality from FDI to growth impedes our ability to firmly conclude that FDI inflows are a driver and not just a consequence of higher economic growth. Just as a higher return on investment typically attracts more fixed investment, it should be no surprise that it also attracts more foreign investors. Having said that, we need to acknowledge that the difficulty of finding unambiguous evidence of causality from FDI to growth does not refute the notion that such a relationship nevertheless exists. As the growth literature suggests, many different factors combine to create an environment conducive to higher economic growth. Proper policies and institutions have been found to be particularly important over longer periods of time. In this context, we need to view FDI from a broader perspective than its direct and immediate impact on growth itself. Could it not be the case, for example, that foreign investors are more demanding than indigenous firms as regards a stable and favourable policy environment, good infrastructure and an appropriate human capital stock? If governments introduce policies and create institutions with the purpose of attracting FDI, they may create an environment more generally favourable to growth even though some of this growth is not the result of FDI per se. The evidence is stronger that FDI has been boosting growth directly in Central and Eastern European countries (CEE) than in the 15 countries of the European Union (EU-15). The reason, as we have argued, is that while these countries needed to bridge the technology gap to the more advanced countries, they nevertheless met some key conditions - especially in terms of human capital - which helped them bridge this gap more quickly with the help of FDI. In addition, the sheer magnitude of net FDI inflows helped sustain a higher level of domestic investment than would have been possible on the basis of domestic saving and debt-creating capital inflows alone. While FDI is expected to continue to contribute to economic growth in the CEE countries that have joined the EU, it is less clear whether the economic gains from FDI will be as high as during the transition from plan to market. The more the new EU members come to resemble EU-15 countries in terms of inward FDI stocks as a share of GDP, productivity, efficiency and level of technology, the less likely it is that FDI will have a positive influence on economic growth beyond what is observed in more advanced market economies. That said, FDI and the associated activities of transnational corporations will undoubtedly remain an important welfare-enhancing force - both inside and outside an enlarged European Union
Prevod obezbedio autor RezimePriliv stranog kapitala u zemlje jugoistočne Evrope (JIE) pre izbijanja finansijske krize iz 2008. godine, podržavao je rast domaće tražnje, koja se jednim delom zadovoljavala iz uvoza. To je uslovilo širenje deficita tekućeg računa. Liberalizacija spoljne trgovine je olakšala uvoz i doprinela rastu trgovinskog deficita. Priliv kapitala u ove zemlje pojačan je niskim kamatnim stopama na strana sredstva, kao i povećanim iznosima raspoložive globalne likvidnosti. Snažna domaća tražnja generisala je visoke stope privrednog rasta. Međutim, značajan rast cena i nadnica, pre svega zbog očekivane konvergencije dohotka, oslabio je sektor razmenljivih dobara u ovim zemljama. Rezultat je visok porast strane zaduženosti, bez odgovarajućih kapaciteta za servisiranje dugova, kao i slabljenje konkurentnosti privrede. Olakšavajuća okolnost za ove zemlje je značajan neto priliv stranih direktnih investicija (SDI), kao važan kanal finansiranja deficita tekućeg računa. Kod zemalja ovog regiona je nastupilo prilagođavanje posle izbijanja globalne ekonomske i finansijske krize, uz prateću redukciju deficita tekućeg računa. Međutim, glavni pravac za finansiranje održivog deficita tekućeg računa je povećanje izvozne konkurentnosti i izvoznih prihoda. Na taj način bi se smanjivao trgovinski deficit, a time bi se i deficit tekućeg računa doveo u održive okvire. Neto priliv SDI je alternativni izvor finansiranja deficita koji ublažava teret spoljne zaduženosti. Međutim, i kod ovog vida priliva kapitala mora se imati u vidu mogućnost repatrijacije profita i eventualno povlačenje kapitala, što bi otežalo finansiranje dostignutog deficita tekućeg računa. SummaryThe inflows of foreign capital to the Southeastern Europe (SEE) countries before the outbreak of the global financial crisis in 2008 supported the growth of domestic demand, which was partially satisfied by imports. This conditioned the growth of the current account (CA) deficit. The liberalization of foreign trade has facilitated imports and contributed to the growth of the trade deficit. The capital inflows into these countries have been increased as a result of the low interest rates as well as the increased amounts of available global liquidity. Strong domestic demand has generated high rates of economic growth. However, a significant increase in prices and wages, primarily due to the expected convergence of income, weakened the sector of tradable goods in these countries. The result has been a high increase in external debt, which could adversely affect debt servicing capacities, and weaken the competitiveness of the economy. The mitigating circumstance for these countries is the significant net inflow of foreign direct investment (FDI), as an important channel of financing the CA deficit. The countries of the region have made adjustments after the outbreak of the global economic and financial crisis, with the accompanying reduction in the CA deficit. However, the main direction for financing a sustainable CA deficit is to increase export competiti...
RezimeAmerički dolar je stekao status svetske rezervne valute u bretonvudskom sistemu i zadržao ga do danas. Ovakva pozicija u međunarodnim finansijama ima svoje prednosti i manjkavosti kako za SAD kao emitenta ove valute, tako i za ostatak sveta koji je koristi u trgovini, čuvanju vrednosti i raznim finansijskim operacijama i obračunima. Raspadom bretonvudskog sistema dotadašnji režim fiksnih deviznih kurseva zamenjen je fluktuirajućim deviznim kursevima. Nezavisno do ove promene, dolar je nastavio da igra ulogu svetske rezervne valute. Brojne bankarske i valutne krize posle prelaska na sistem fluktuirajućih deviznih kurseva, kao i preokreti u međunarodnim tokovima kapitala, naveli su zemlje u razvoju i zemlje u tranziciji da povećavaju svoje devizne rezerve. U nastojanju da sačuvaju njihovu vrednost, centralne banke zemalja uglavnom ih plasiraju u državne hartije od vrednosti SAD, kao likvidnu i pouzdanu aktivu. Međutim, zbog rizika koji nosi oslonac na jednu nacionalnu valutu u ulozi svetske rezervne valute, postoje brojni predlozi o reformi međunarodnog monetarnog sistema. Prema tekućim tendencijama u svetu, najozbiljniji kandidati za status svetske rezervne valute u budućnosti su dolar, evro i kineski juan. DOLLAR AS THE WORLD'S RESERVE CURRENCY -CHALLENGES AND PROSPECTS SummaryThe US dollar gained the status of the world's reserve currency in the Bretton Woods system and has preserved it until the present day. Such position in international finance entails both advantages and disadvantages to the USA as the issuer of this currency, and to the rest of the world using it in trading, as store of value, and for the purpose of various financial operations and transactions. After the collapse of the Bretton Woods system, the regime of fixed FX rates was replaced by floating FX rates. Yet, regardless of this change, the dollar kept its role of the world's reserve currency. Numerous banking and currency crises following the transfer to the floating FX rates regime, along with the shifts in international capital flows, forced the developing countries and countries in transition to increase their FX reserves. In the tendency to store their value, central banks usually invest them into US Treasury securities, as liquid and reliable assets. However, due to the risk incurred by the reliance on a single national currency in the role of the world's reserve currency, there have been many proposals to reform the international monetary system. According to the current global tendencies, the most serious candidates for acquiring the status of the world's reserve currency in the future are the dollar, the euro, and the Chinese yuan.
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