Sustainable economic growth: A perspective for Macedonia

Abstract

Retrospective analysis shows that since 1990’s, ex-socialist economies were in transition. This process was multidimensional and had deep roots. In most transition economies, output (GDP) is determined by the availability of labour, capital and their productivity (TFP). Hence, these indicators are not generating the business cycles, which is typical for market economies in the long-term. At this point, it is vital to understand the reasons of low-level of capital accumulation in transition economies in order to find opportunities to make better use of physical, human and social capital. Furthermore, it is observed that in these economies, institutions needed to be re-established or the rules of the game needed to be changed to regulate incentive structures that will lead to growth. The main objective of this research is to identify the peculiarity of economic growth in Macedonia and to examine if achieving smart growth in long-term is possible; which is supported by fundamental notions of sustainable development.