Davorin Kračun

Inflation model of a semicommand economy

Abstract A semicommand economy can be defined as a system where the pricing of goods is influenced by the market but where the prices of production factors are under control of the state. The model presents various pricing and economic policy measures to deal with inflation. It is constructed as a dynamic supply-side focused, input-output model which differentiates nominal and real movements. It examines the possible responses of prices and the volume of production to certain measures or programmes to counteract inflation. The cases described are based on the present day Yugoslav economy.

Growth Effects of Cross-border Mergers and Acquisitions in European Transition Countries

Abstract This paper deals with the economic effect of cross-border mergers and acquisitions on GDP per capita in European transition countries for the 2000- 2014 period. Our analysis shows that cross-border mergers and acquisitions have a negative effect on GDP per capita in the current period, whereas their lagged level positively impacts output performance. We found that transition countries characterized by a higher quality of institutional setting have achieved a positive impact on GDP per capita.

Effects of cross-border mergers and acquisitions on GDP per capita and domestic investment in transition countries

The study investigates the impact of cross-border mergers and acquisitions on GDP per capita and domestic investment in 22 European transition countries from 2000 to 2014 by using the system Generalized Method of Moments estimator. The main implications are that cross-border mergers and acquisitions have a negative effect on GDP per capita in the year of merger or acquisition, while their lagged level shows a positive impact. From long-term perspective, this type of FDI has negative and significant effect on GDP per capita. The results show that one-year lagged cross-border mergers and acquisitions positively affects domestic investment, suggesting that spillover effects of this type of investment can be expected not earlier than one year after the merger or acquisition. The value of this paper is that our results show how the advances in structural reforms enhance GDP per capita whereas their influence on domestic investment activity is insignificant. We found that there is insignificant impact of the relationship between overall structural reforms and cross-border mergers and acquisitions on GDP per capita and domestic investment both in short and long run. The originality of this study lies in investigation of the dynamic nature of cross-border mergers and acquisitions and their economic effects depending on the quality of structural reformss.

The End of Transition in Slovenia: Were the Deviations Successful?

Slovenia’s economic transformation deviated from the usual patterns: its general approach to reforms was rather conservative and had more elements of gradualism than shock therapy. It was inclined to tolerate inflation as Slovenia decided to pursue some priorities other than fighting inflation at any price. The decisive period was between 1991 and 1994 when the government implemented crucial reforms creating favorable conditions for inflation to decrease and, at the same time, turn the economy toward sustained growth. Indeed, GDP growth rates after 1993 were between 3% and 5% while inflation remained on a moderate level. Immediately before entering the EU and ERM2 inflation was finally reduced.

Post Keynesian Model of Transition and Economic Performance in Slovenia

In the economic policy performed by Slovenia during the transition there has been a mix between Neoclassical (shock) therapy and Keynesianism. Slovenia’s economic transition is compared with three theoretical models: neoclassical shock, neoclassical gradualist and Post Keynesian. It followed the neoclassical shock therapy with monetary reform and trade liberalization, while the gradual inflation reduction had many Post Keynesian elements. Without an explicit reference to Keynes there were many measures assuring a high level of aggregate demand that enabled a rapid exit from transformational depression to stable economic growth and decrease in unemployment, but under persistent moderate inflation. That particular model of transition is interesting because the transitional recession was rather short followed by steady economic growth. It seems that the transition model mix had a favorable influence on economic performance and social integrity.